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Annmarie15
New Member

5 Posts

Posted - 16 December 2020 :  10:33:01  Show Profile  Reply with Quote
Hi, I would appreciate advise please. I have a choice to make Sequestration (Im in Scotland) or a Trust Deed. I have been assessed as having approx 300 a month to pay to my creditors. In Sequestration (Bankruptcy) it says you are discharged after 1 year. Does this mean I stop paying and my debts are written off after 1 year? I am 64, medically retired so cannot work. My income is occupational pension and ESA, pip and housing benefit.

Any help appreciated

Thanks

TDA (Debt Adviser)
Trust Deed Expert



13618 Posts

Posted - 16 December 2020 :  11:33:21  Show Profile  Reply with Quote
Welcome to the trust deed forum Annmarie15.

With bankruptcy you will usually be discharged after one year. However, if you have surplus income you'll continue to be required to pay it over for a further three years (so four years in total).

A protected trust deed (with very limited exceptions) must run for at least four years. Once you've completed your obligations you can be discharged from the trust deed and from your debts.

Do you expect that there will be any changes to your income over the next four years?

Do you own any siginificant assets, such as a house or car for example?

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Annmarie15
New Member

5 Posts

Posted - 16 December 2020 :  13:28:08  Show Profile  Reply with Quote
Thank uou for your response. Only change will be in relation to state benefit rates. ie ESA and PIP. Can you advise if PIP is taken into account in the income - I receive care and mobility components which I use to treat my conditions, transport etc.

I do have an old car 09 plate which i need as my mobility is very poor and Im not on a public transport link within walking distance.

A.McCheyne
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TDA (Debt Adviser)
Trust Deed Expert



13618 Posts

Posted - 16 December 2020 :  13:38:16  Show Profile  Reply with Quote
Hi Annmarie15.

All of your income is taken into account. However you will of course have extra expenditure (this is why you receive the PIP) so that should also be taken into account. They may well cancel each other out.

Your benefits cannot directly be used to fund the payment into a bankruptcy or protected trust deed. This means that your monthly contribution cannot be more than the amount of private income you receive (the occupational pension).

Do you think your vehicle is worth less than 3000? It sounds like this is probably the case.

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Annmarie15
New Member

5 Posts

Posted - 16 December 2020 :  13:48:15  Show Profile  Reply with Quote
Hi

My car is valued at approx 1200. I don't have any assets - just confused as to which would be better, sequestration or trust deed.

A.McCheyne
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Kevin Mapstone
Trust Deed Expert



3932 Posts

Posted - 16 December 2020 :  13:59:21  Show Profile  Reply with Quote
Hi annmarie15

Who was it that has assessed that you have 300pm available to pay to your creditors, if you don't mind me asking? It seems a lot for someone who is entitled to Housing Benefit, which after all is means-tested. The disability benefits may be skewing the calculations, however an experienced adviser should be ensuring that any care/mobility costs are being fully taken into account.

I would recommend getting another experienced eye to check over your income/expenditure budget - there's never any harm in getting a second opinion, whether from your local free sector money adviser or from an insolvency professional like myself or the other experts on this forum.

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Kevin Mapstone
Trust Deed Expert



3932 Posts

Posted - 16 December 2020 :  14:03:26  Show Profile  Reply with Quote
In terms of which process is better, they are actually very similar in many ways and should achieve the same outcome for you. Often it comes down to particular individual circumstances or personal preference as to which way might be best. Discussing the main features and pros/cons of each as they relate to your circumstances is all an adviser can really do and then it is up to you to decide which you prefer.

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Annmarie15
New Member

5 Posts

Posted - 16 December 2020 :  14:40:17  Show Profile  Reply with Quote
Thank you Kevin. Your input is much appreciated. It was an insolvency company who have done the assessment. I was a bit shocked that the PIP is taken into account as its disregarded for housing benefit and ESA as it is for a definite purpose ie to help pay for additional care needs.

How do I go about getting a second opinion?

A.McCheyne
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TDA (Debt Adviser)
Trust Deed Expert



13618 Posts

Posted - 16 December 2020 :  14:43:30  Show Profile  Reply with Quote
Hi Annmarie15.

My instinct was the same as Kevin's in that 300 seems quite a lot in the circumstances.

We're happy to provide you with a second opinion if you'd like. Either give us a call or complete the short Contact Us enquiry form and we'll get back to you.

You could also get a second opinion from any number of other insolvency practitioners and/or advice agencies.

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds    
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Annmarie15
New Member

5 Posts

Posted - 16 December 2020 :  14:47:16  Show Profile  Reply with Quote
Great will give you a call tomorrow. Many Thanks for your help

Take care and stay safe

A.McCheyne
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