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expired
Advanced Contributor

58 Posts

Posted - 27 June 2018 :  01:31:26  Show Profile  Reply with Quote
I have been im a trust deed for two years and paid the trustee fees so far, its supposed to be 3 years trustee fees £6000 and 2 years creditors debt £4000. I have paid £4400 in trustee fees over the 2 years. Under the new pension laws I can retire at 55 and over without employers permission. I would like to retire at end of this year due to having arthritis an terrible back pain, I am 59 years old.

My original debt is £23000, I contacted Pinnacle (Knightsbridge)and mentioned I may receive around £30000 in higher lump sum pension at end of this year, they said I would need to pay £23000 full debt plus 8% interest on loan, plus the trustees fees, plus 20% of my £23000 debt?

can i appeal said multiple fees?

I have already paid 2 years of fees and why is the trustee entitled to 20% of £23000 at £4600? They have also received around £300 in PPI claims.

considering the fact I am paying off my debt 3 years earlier?



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Certiorari
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12 Posts

Posted - 27 June 2018 :  08:07:29  Show Profile  Reply with Quote
I think the trustee is entitled to 20% of realisations because these are the fees you agreed to when you signed your Trust Deed, but there is nothing to stop you trying to negotiate lower fees.

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Sharon Toal
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351 Posts

Posted - 27 June 2018 :  09:39:08  Show Profile  Reply with Quote
Hi expired

The trustee's fees are fixed at the start of the process and forms the basis in which creditors agree to the proposal. The fee is usually a fixed fee and a % of realisations.

You do have a right to have the fees audited by the accountant in bankruptcy at any time and they do have the authority to issue a direction to the trustee on fees however they may agree the % realisation fee is due to the trustee based on the transparency of the proposal.

In my experience, a trustee is likely to negotiate and limit the % fee based on common sense and the time spent ingathering the sums due.

For example, if a client wins £5 million on the lottery, I do not believe it would be the intention of the legislation to allow the trustee a £1 million fee.

Please let us know how you get on.

Sharon is no longer posting in the forum.

Edited by - Sharon Toal on 28 June 2018 15:19:48
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Sharon Toal
Trust Deed Expert



351 Posts

Posted - 27 June 2018 :  09:49:05  Show Profile  Reply with Quote
Hi expired

The trustee's fees are fixed at the start of the process and forms the basis in which creditors agree to the proposal. The fee is usually a fixed fee and a % of realisations.

You do have a right to have the fees audited by the accountant in bankruptcy at any time and they do have the authority to issue a direction to the trustee on fees however they may agree the % realisation fee is due to the trustee based on the transparency of the proposal.

In my experience, a trustee is likely to negotiate and limit the % fee based on common sense and the time spent ingathering the sums due.

For example, if a client wins £5 million on the lottery, I do not believe it would be the intention of the legislation to allow the trustee a £1 million fee.

Please let us know how you get on.

Sharon is no longer posting in the forum.

Edited by - Sharon Toal on 28 June 2018 15:20:14
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expired
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58 Posts

Posted - 27 June 2018 :  19:29:01  Show Profile  Reply with Quote
I spoke to two different individuals over a 3 day period, the first person sounded like a school leaver and informed me that i was not legally entitled to apply for my lump sum pension from my employer as it was locked into my trust deed and that if i applied for my lump sum pension and monthly works pension, this young person informed me that the pension people carry out a credit check before releasing your pension allowance? i have since been informed by the other individual with the human touch that this was utter nonsense and it was bad advice and information i received.

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expired
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58 Posts

Posted - 27 June 2018 :  19:35:51  Show Profile  Reply with Quote
the second person i spoke to this morning, the older man with life experience and oozing of empathy and understanding said that he would put forward to my trustee of said contribution offer of £15000 from my pension which is £11000 more than the trust deed loan of £4000 outstanding, he said that the trustee would have to put this forward to the creditors as my place of work are paying off hundreds of staff due to restructuring and that if and when i retire at the end of the year i will not have enough works pension to afford current monthly trust deed payments of £180. if i did not retire there is no guarantee of said job security? I have now received an email from pinnacle asking for £30000 which is £23000 original debt and £7000 in realisation fees etc?

expired

Edited by - expired on 27 June 2018 22:45:33
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expired
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58 Posts

Posted - 27 June 2018 :  19:39:34  Show Profile  Reply with Quote
i just dont get the 20% fees of my £23000 debt, the trustee gets the first three years of fees and also want 8% interest on loan? as you stated if I won 1 million on lottery they would get £200.000 based on 20%, that is absolutely crazy and makes no sense considering my debt is only £23000.

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expired
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58 Posts

Posted - 27 June 2018 :  19:52:26  Show Profile  Reply with Quote
The point is I need to survive and have some sort of stability as my works pension would only be around £370 a month. My wife is 69 years old and retired so our total income would not be that substantial overall.

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expired
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58 Posts

Posted - 27 June 2018 :  19:59:18  Show Profile  Reply with Quote
If my trustee replied and said i dont think that £15000 offer is enough, would I be able to approach the creditors myself and explain my situation that i could lose my job and you get nothing or if i retire and every penny is taken from me i will find it difficult to survive, after all when you start a trust deed you fill in an expenditure form to list all your outgoings so as to leave you enough to survive and continue to make monthly contributions and yet when you want to pay a substantial extra amount to creditors the trustee does not take your said circumstances into consideration after the fact?

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expired
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58 Posts

Posted - 27 June 2018 :  20:13:52  Show Profile  Reply with Quote
"as you stated if I won 1 million on lottery they would get £200.000 based on 20% fees, that is absolutely crazy and makes no sense considering my debt is only £23000." I am going to use the above with the accountant in bankruptcy and demand where did this 20% fee originate from and question the legalities, i have asked various front line staff what is this 20% fee and they could not give me an answer but to say its written on the paperwork. this fee was not discussed with me if i decided to retire in the future, i was not informed that my lump sum pension could be taken from me as my trust deed was organised over a 40 minute telephone call? i know i have a responsibilty to pay £23000 in which i would glady pay minus the trustees £7000 fees? what all for just typing some letters using a computerised system and using standard forms with only to add the debtors details? what is a software fee £360? courier fee £120? they received over £350 in ppi claims acting on my behalf to add to my trust deed and yet they want to charge me £330 in chasing up said ppi which is also included in the break down of said fees of their qoute of £30000 i need to pay to discharge my trust deed?

expired

Edited by - expired on 27 June 2018 20:15:19
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TDA (Debt Adviser)
Trust Deed Expert



12961 Posts

Posted - 27 June 2018 :  20:15:12  Show Profile  Reply with Quote
Hi expired.

I'm glad to hear that you've spoken with someone who has offered better support and advice.

The 20% will, I imagine, be the contractual fee agreement that you and your creditors made with the trustee at the start. As Sharon has stated, you can try to negotiate on this figure if you wish to.

The trustee doesn't get the 8% interest. The interest is paid to your creditors. This is because (usually) they'd have been entitled to receive interest on the debt if you hadn't gone into a trust deed.

I'm afraid you cannot approach your creditors directly. It will have to be put to your creditors via your trustee.

Trustees don't have a great deal of scope to take detailed circumstances into account in these types of circumstances. It used to be very common - someone would offer some type of lump sum to bring a trust deed to an early end and the trustee would see whether the creditors would accept it.

Trustees didn't change the rules here - the legislation was changed a few years back. The legislation now states that the only way to end the trust deed before four years is for the total of the original debts, interest on the debts, and trustee fees, to be paid in full.

To be honest, you'd probably find plenty of trustees (and creditors) that agree with you that this situation sometimes doesn't make a lot of sense and that there should be scope for discretion in certain situations.


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Edited by - TDA (Debt Adviser) on 27 June 2018 20:16:06
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expired
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58 Posts

Posted - 27 June 2018 :  20:21:24  Show Profile  Reply with Quote
lol yes the new legislation that came into effect in 2013 was based on reducing the trustees fees and concentrating in providing the creditors with an increase from the normal calculations so as to benefit said creditors who are entitled to recuperate the majority of unpaid debt as they are the biggest losers in the end. thanks for the response, but I will continue to argue the fees and hopefully my offer of £15000 will be passed onto creditors.

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Edited by - expired on 28 November 2018 00:29:18
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expired
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58 Posts

Posted - 27 June 2018 :  20:23:35  Show Profile  Reply with Quote
I believe an individual who was facing £17000 in trustee fees had said fees reduced to £12000 as per accountant in bankruptcy decision.

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expired
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Posted - 27 June 2018 :  20:26:16  Show Profile  Reply with Quote
I have 3 years left of 60 months trust deed.

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TDA (Debt Adviser)
Trust Deed Expert



12961 Posts

Posted - 28 June 2018 :  08:12:07  Show Profile  Reply with Quote
You certainly do have the options Sharon mentioned above, negotiation and (if you deem necessary) an audit by the Accountant in Bankruptcy.

Percentage based fees can seem unfair (even if they're contractually accurate) in circumstances like these.

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Sharon Toal
Trust Deed Expert



351 Posts

Posted - 28 June 2018 :  15:16:19  Show Profile  Reply with Quote
Expired

There are a lot of points and questions raised so apologies if I donít answer all of them.

The new change in legislation may have reduced fees for some IP firms but not all. Charging time on line on cases would in this instance be a better way of dealing with this issue and would be a more sensible approach.

I fully appreciate your predicament.

In terms of the legislation and case law, a trustee cannot compel an individual to drawn down a pension however if that person does decide to do so then the trustee can seek a payment and would have an interest in the funds.

This is your negotiation starting point.

It would not be uncommon for an individual in your situation to contact the trustee and advise that you are able to draw down pension to allow the early closure of the case on a pre-set level of conditions. These may include:

1 Capping of fees
2 Writing to creditors asking them to waive the requirement to pay stat interest

I know the legislation states stat interest needs to be paid but some cases involve some discretion regarding this on the basis that full transparency has been provided and creditors agree to this. We have successfully managed closure of trust deeds with the capping of stat interest.

The trustee is required to act in the best interest of creditors and based on the above scenario, this sounds like a good deal for them.

The alternative would be for an individual to continue contributions and pay a dividend without the pension drawn down Ė although I understand this is not an option for you due to heath issues.

Please ensure before you decide to draw down any pension that you seek advice from a directly FCA authorised financial advisor.

Please let us know how you get on.

Sharon is no longer posting in the forum.

Edited by - Sharon Toal on 28 June 2018 15:23:22
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