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Hendo180
New Member

4 Posts

Posted - 30 July 2020 :  14:55:09  Show Profile  Reply with Quote
Hi, hoping someone has experience with this that can can help me out a little. Whilst waiting for guidance from a solicitor I thought I'd post on here aswell.
At the moment I'm in debt to about 16k.
Just going through a divorce where the marital home has been sold and 40k of equity in a joint holding account. We're both working through solicitors to come to a settlement, albeit very slowly.
In March I couldn't afford to keep up solicitor fees so he stopped representing me, at which point my ex's solicitor sent a letter saying court action would be started to get a settlement.
The next letter I received states a court decree says I should pay 60k in settlement (no letters from court giving me the opportunity to be represented or represent myself). In the letter her solicitor states they will take my share of the equity as payment towards the settlement.
So my question at the moment is, if I have 20k sitting in joint holding, can this just be taken as payment towards the settlement or should this be paid to me so I can clear my current debt and set up a payment scheme to repay the settlement. Failing that is the remaining 40k settlement figure classed as unsecured debt if I enter into a trust deed which I will definitely have to do if I can't use the equity share to clear my current debtor is divorce settlement exempt?
Sorry for the long post and thanks in advance for anyone that could give guidance

Paul McDougall
Trust Deed Expert



74 Posts

Posted - 30 July 2020 :  18:36:27  Show Profile  Reply with Quote
Evening

This is quite a common question

If you entered into a trust deed then your total debt including the divorce decree would be included in the deed . Under a trust deed you would be required to pay a contribution . Any sums regarding the equity may be treated as an estate and would be realised for the benefit to your creditors.

As part of the trust deed your assets are conveyed to your trustee. If appropriate the trustee would raise an action for sale.

I would recommend hitting the contact button and speaking to either kevin or I


Paul

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Edited by - Paul McDougall on 30 July 2020 18:37:52
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Hendo180
New Member

4 Posts

Posted - 30 July 2020 :  19:23:06  Show Profile  Reply with Quote
Thanks Paul, if the equity does not get paid out in order for me to clear my debts I will have no alternative but to seek a trust deed, and I just wanted to make sure there were no special restrictions on the settlement figure, as I'd be paying the trust deed and then paying back the settlement separately. I will be writing to my ex's solicitor to say I do not authorise my share to be taken as part payment but I don't what will happen in the event that they refuse to pay it out?
I will hit the contact button
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Kevin Mapstone
Trust Deed Expert



3868 Posts

Posted - 30 July 2020 :  19:35:31  Show Profile  Reply with Quote
Technically your obligation to pay the divorce settlement could be included in a trust deed. However, the problem you would have is that your ex wife could reject the proposals and prevent the trust deed becoming protected. As such your only insolvency option might be sequestration instead.
I think you are wise to get further advice from a solicitor first though. It may be possible to bring it back to court if you were not represented.

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Hendo180
New Member

4 Posts

Posted - 30 July 2020 :  19:49:03  Show Profile  Reply with Quote
I had a pone call from a solicitor today who advised I send a letter giving the options that either the equity gets paid out to me then a payment arrangement is set up, or a trust deed/sequestration would be sought. They also advised that as it has reached decree status it would cost up to 10k to defend it through the High Court?
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Paul McDougall
Trust Deed Expert



74 Posts

Posted - 31 July 2020 :  09:06:09  Show Profile  Reply with Quote
Divorce settlements are quite costly when there is a breakdown between both parties.

One of the advantages of a statutory solution is that the asset position is clear. In your case, the equity would be split between the trustee and your ex partner. It is covered by insolvency legislation opposed to matrimonial law.

It also concludes the process quicker. The amount owed by you to your ex is treated as a claim and is written off after the process.

I would recommend speaking to Kevin or I in order that we can provide advice.


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Edited by - Paul McDougall on 31 July 2020 09:06:50
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Kevin Mapstone
Trust Deed Expert



3868 Posts

Posted - 31 July 2020 :  11:01:25  Show Profile  Reply with Quote
I was just re-reading your post, hendo180, and note that you say you would pay the settlement off separately from your trust deed. It wouldn't work like this actually. The debts you have and the divorce amount would all be dealt with under the trust deed or sequestration, so they would all get a portion of the funds you pay in, including the half share of the equity. Any remaining amounts are written off at the end.

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Edited by - Kevin Mapstone on 31 July 2020 11:02:03
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Hendo180
New Member

4 Posts

Posted - 01 August 2020 :  11:39:57  Show Profile  Reply with Quote
Thanks for the advice guys, I will hopefully be able to speak over the phone on Monday, I have the kids over the weekend. My worry was more that if the settlement was some how "protected" or "exempt" from a trust deed then it would be fruitless going down the trust deed route as I would still have to pay the settlement off. If the settlement is indeed treated like every other debt then that puts my mind at ease a little. This will be a moot point if they agree to pay out my share of the equity, and I come up with a monthly plan to pay the settlement but I just wanted to know what options I have should they refuse (if they legally can)?
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Paul McDougall
Trust Deed Expert



74 Posts

Posted - 01 August 2020 :  14:02:32  Show Profile  Reply with Quote
Hi Hendo

I will call Monday.

The settlement figure would be a claim in the trust deed estate and your ex would rank as a creditor. Your ex would receive a dividend out of the estate and would rank alongside other creditor and receive the same % distribution.

Speak Monday.

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