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Truescot
New Member

5 Posts

Posted - 15 July 2020 :  17:29:29  Show Profile  Reply with Quote
Hi. I have been in a trust deed since 2018 and recently found out i had a distant relative who passed away in 2018 also. Until recently i had no idea i was in line to inherit anything. My question is will all of the inheritance be taken from me or will it be half?

TDA (Debt Adviser)
Trust Deed Expert



13429 Posts

Posted - 15 July 2020 :  17:37:56  Show Profile  Reply with Quote
Hi Truescot and welcome to the forum.

I'm afraid this may not be the answer you hoped to hear.

Your trustee will look to gather in this money and use it to help repay your creditors.

In the event that it's a large sum of money, some of it could get returned to you. This could only happen if the total you've paid (from your previous contributions plus this lump sum) clears the following:

1 - The full amount of debt you owed when your trust deed began.

2 - Interest on those debts.

3 - Your trustee's fees and costs.

If all of the above was cleared an early discharge can happen.


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Truescot
New Member

5 Posts

Posted - 15 July 2020 :  23:36:21  Show Profile  Reply with Quote
If the inheritance is the same as your debt owed. Can you pay off your debts or di you have to continue for the full term?
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Truescot
New Member

5 Posts

Posted - 15 July 2020 :  23:46:42  Show Profile  Reply with Quote
Also do i contact the lawyers dealing with the inheritance so i can contact my trust deed trustee or do i wait to see how much?
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Paul McDougall
Trust Deed Expert



74 Posts

Posted - 16 July 2020 :  08:18:12  Show Profile  Reply with Quote
Truescot

I would recommend speaking to your Trustee as soon as possible.

If the inheritance is the same as the debt owed, you would still be required to continue with the Trust Deed as Stat Interest, Fees to Trustee and Statutory costs are still required to be paid.

You could ask your Trustee for a full cost recovery of your case. This would provide you with sums required to close your case.

P

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gibbo8907
Contributor

10 Posts

Posted - 16 July 2020 :  08:44:14  Show Profile  Reply with Quote
Hi,

From my experience I would watch when asking for a final figure to close your case.. I done this 2 years into mine as I was given an opportunity from family to pay it off, for them to request over 50% extra to what the total debt was. As much as I understood there would be fees, I found this extremely unfair, and unrealistic.

Due to this, I had to turn down the chance to pay it off as I wasn't willing to get them to pay so much extra, this making the total I'll be able to pay a hell of a lot less than what they would have gotten if the fees were realistic. The debt would have been paid off in full too, which I'm quite confident they wouldn't be happy to find out this isn't the case due to obscene fees charged for this.

Thanks,
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TDA (Debt Adviser)
Trust Deed Expert



13429 Posts

Posted - 16 July 2020 :  09:12:03  Show Profile  Reply with Quote
Hi gibbo8907.

The fees can seem high in this scenario.

Part of the fee is based upon a percentage of the money gathered in. If an unexpected lump sum arrives, a percentage fee can add up to a lot of money.

To be fair, this fee structure is formally agreed by both the client and their creditors when the trust deed begins.

I do appreciate however that most people starting a trust deed probably don't expect a lump sum to become available to them over the next few years, so a percentage fee system probably doesn't seem of any concern at that point in time.

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gibbo8907
Contributor

10 Posts

Posted - 16 July 2020 :  10:24:28  Show Profile  Reply with Quote
Yeah I agree that it was never an option at the time for myself, but now that opportunity came and went due to the high fees. This was recorded to my local MP as I found it unfair.
You'd think there would be a smaller fee (sort of incentive) to encourage people to pay off in full should the opportunity arise. In my instance, and I'd imagine probably quite a few more, that opportunity has now gone. Thus meaning everything paid back will now be less that what I may have been able to pay.

To give context, to pay off in full when the opportunity came with the totals they gave me, I would have paid 18K over and above what the original debt was... That was including what was already paid in the first two years of the Trust Deed..

I'll leave it at this though as it doesn't seem right to takeover Truescot's post :)

Apologies Truescot :)

Thanks,
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TDA (Debt Adviser)
Trust Deed Expert



13429 Posts

Posted - 16 July 2020 :  10:32:59  Show Profile  Reply with Quote
Hi gibbo8907.

The early settlement of trust deeds using some type of compromise that was acceptable to creditors used to be possible. It still is with the equivalent IVA in the rest of the UK.

The Scottish Government decided to make a change that stopped this.

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Truescot
New Member

5 Posts

Posted - 16 July 2020 :  19:32:12  Show Profile  Reply with Quote
So just to clarify. If i wish to get rid off my debts i have to pretty much double what my debts are or all money goes to my trustee which makes no dent in my debt. Is there a way to request to hold some for some security ie moving house, car for work, family etc.
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TDA (Debt Adviser)
Trust Deed Expert



13429 Posts

Posted - 16 July 2020 :  19:54:35  Show Profile  Reply with Quote
Hi Truescot,

I've no way of knowing how much more than your original debt total this could be, but your trustee can provide you with figures as Paul suggested.

The underlying principle is that a trust deed only writes-off the debt that you cannot afford to pay.

If you become able to repay your debts plus more, it doesn't seem entirely unreasonable that your creditors receive some interest (as was agreed when you first took out the credit) and that they don't have to fund the fees of a trustee that you instructed.

If there's a really urgent pressing need to retain some funds, you could make a case to your trustee and hope for a positive response. Ultimately however they've been instructed to recover funds for your creditors based upon what you can afford and the terms of your trust deed.

I do appreciate how this might feel unfair in some ways. You're certainly not the only person who has posted here that they feel like this in similar circumstances.

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Edited by - TDA (Debt Adviser) on 16 July 2020 20:04:37
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Truescot
New Member

5 Posts

Posted - 17 July 2020 :  17:59:53  Show Profile  Reply with Quote
Knowing that it makes no difference to my trust deed. Is it easier for me just to gift the gift the inheritance?
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TDA (Debt Adviser)
Trust Deed Expert



13429 Posts

Posted - 18 July 2020 :  07:50:51  Show Profile  Reply with Quote
Hi Truescot,

I'm not quite sure what you mean.

Are you talking about gifting your inheritance to somebody else?

If so that isn't allowed and you'd risk causing yourself a lot of trouble.

The central issue is that your trust deed, a legal arrangement agreed voluntarily by you and your creditors, takes into account any lump sum you receive prior to your discharge. This is part of what you offered to your creditors and part of what they subsequently accepted.


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