Where are you located at?
First off, I'm sorry you had a bad experience with your past instructor. It's hard to find a good one and I'm glad you're going to continue on with lessons.
I wouldn't sell your horse to get an 'english horse' just yet. Theres no reason that a a trail horse pro can not do basic english flat work. Also, most places have school horses for you to ride and I would recommend that before buying another horse for the new discipline.
I have been lucky to be working with an amazing instructor for the past year or so. However I'm going to be moving and need to find a new one and I just dread it. But here is what I do.
I always go and watch a lesson first. I call up and talk to the instructor, ask them about their teaching methods, qualifications, experience and things of that nature and if they pass, I ask them if there would be a time I could see a class similar to the one I will be placed in (Beginner, Advanced, Dressage, Jumping, whatever).
If you want, you can always schedule your observing first and bring a list of questions or concerns with you. It doesn't hurt to tell them your past experiences and the concerns that come from it. It's important to realize that the instructor works for you, not the other way around. After a bunch of bad instructors, I started 'interviewing' them, and had much better luck.