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stephfin57 Posted - 18 March 2020 : 19:11:27
Hi I am new to the Forum.

Sadly my wife passed away 4 weeks ago. I am 18 mths into a 6 year Trust Deed.

We had joint Life Insurance for our joint mortgage.

The life insurance should be enough to pay off the mortgage.

Can i pay off the mortgage or must I pay all of it over to the Trustee?

If I cannot pay off the mortgage I am concerned that without my wife's income I will struggle financially.
6   L A T E S T    R E P L I E S    (Newest First)
Kevin Mapstone Posted - 30 March 2020 : 20:03:28
The Trust Deed period can only be shortened if the full amount of the debt plus interest, as well as the trustee's fees and outlays have been paid in full. You would really need to seek clarification on those figures from your trustee in order to tell whether this will be possible in your case.
stephfin57 Posted - 27 March 2020 : 17:44:00
Yes I am the sole beneficiary. I could only afford the mortgage if their was a reduction in the amount paid to the Trust deed.
If the £30,000 is paid into the Trust Deed would this affect the duration of the Trust Deed, given this is roughly the amount of the original debt?
There is another £15000 from my wife's estate but once the cost of the funeral(Approx. £8,000) and paying off her sole creditor who is owed £7,000 this will be used up.
Kevin Mapstone Posted - 27 March 2020 : 17:34:38
I'm sorry for your loss, Stephfin57.

Are you the sole beneficiary of your wife's estate? If so then I am afraid that there is a high chance that your Trustee will insist that the funds are paid in to your trust deed for the benefit of your creditors. Going forward, you would only continue to pay to the Trust deed if you can afford to after your mortgage and other living costs are covered. Do you think you would be able to afford the mortgage if you no longer have trust deed contributions to maintain?
stephfin57 Posted - 20 March 2020 : 15:41:28
Hi thanks for your response

The Life Insurance comes to about £30,000 and is probably enough to cover the original debts but not enough to clear the Trust Deed.

It would clear the mortgage but if it is not cleared I would be struggling to pay it now that I no longer have my wife's income.
David Tannock Posted - 18 March 2020 : 22:51:54
Hi stephfin57 and welcome to the forum.

Iím really sorry to hear your terrible news. Please accept my condolences for the loss of your wife.

Like TDA has advised you need to reach out to your Trustee as soon as you can to discuss this with them and the specifics surrounding your case.

When it comes to any type of insurance policy the Trustee will normally note their interest in this to ensure that they are notified in the event of a claim. Do you know if the policy was written into Trust?

In the Trust Deed the Trustee has a responsibility to try and repay as much of your debts as they can. Could it be possible that the life insurance payout would be enough to clear off the Trust Deed and also pay down some of the mortgage too?

In the event that the life insurance is used to pay off the mortgage then the Trustee would turn their attention to the property.

How much debt did you enter the Trust Deed with and how much would the life insurance payout be?
TDA (Debt Adviser) Posted - 18 March 2020 : 19:43:38
Hi stephfin57. I'm very sorry to hear that your wife has passed away.

It's very important that you contact your trustee ASAP to discuss the situation regarding the life insurance payout.

I'm sure that you'll be treated sympathetically and fairly, but your trust deed does impose obligations upon you and your trustee if you receive a lump sum.

How much will you receive from the life insurance policy? How much debt were you in when your trust deed began? The only information that you can rely upon will come from your trustee, but if we know a little more about these types of details it could help us to provide a little more feedback to you.

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