Trust Deed Forum - 3rd Year of TD - but want to finish early 2021
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 3rd Year of TD - but want to finish early 2021
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BMC
Regular Contributor

18 Posts

Posted - 19 October 2020 :  21:40:17  Show Profile  Reply with Quote
Hi all,

New to this page/forum. Me and my wife are under our own separate trust deeds. They began in 2018 and have been absolutely fine. We are both under 72 month payment plan. However due to some health issues (we also rent out our other flat) my wife's MS is now at a stage where she cannot keep on to of the upkeep of the property and is physically struggling. My job keeps me busy and I also do not have the time now to manage the flat.

We are thinking if it would be beneficial to sell the flat and end our TD earlier than stated in our agreements. The flat has increased in value. Could we both use this to pay off the DT earlier than 2024?

They have considered my car as final payment currently valued at 8,800 can this also be considered as early release?

Our current outstanding balances are:

9680.00 & 8800.00

Can this realistically be considered? We have spoken in great length and we would be more than happy to sell the flat and car early to release us from the DT early.

Many thanks,

BMC

Paul McDougall
Trust Deed Expert



108 Posts

Posted - 20 October 2020 :  08:45:47  Show Profile  Reply with Quote
BMC

Hope you are well

To bring your trust deed to an early closure, all debts plus interest must be settled as well as the Trustee fees.

You can ask your Trustee for full cost recovery calculation to ascertain the amounts.

Unfortunately, you would be unable just to settle the balance of contributions due to the Trust Deed.

Paul

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TDA (Debt Adviser)
Trust Deed Expert



13734 Posts

Posted - 20 October 2020 :  09:08:00  Show Profile  Reply with Quote
Welcome to the trust deed forum BMC.

To expand a little on Paul's reply, there's only one way to complete a trust deed before the end of the minimum four year legal term.

This means that each of you must have paid in total:

1 - The full amount you owed at the start plus...
2 - Interest on the debts plus...
3 - Your trustee's fees and costs

The amount that each of you has already paid will be included as part of the total amount required for an early discharge.

The reality however is that the total payment required is likely to be a fair amount more than you each owed at the point that you signed your trust deeds.

You could ask your trustee for an estimate of the sum required for an early discharge and then decide whether:

1 - The sale of the flat would raise enough money
2 - This is a course of action that's worth taking

Another thought is that your options might be different once you have completed the four year minimum legal term. If the extra two years of your trust deeds were set up to deal with the equity that you have in your assets, you might be able to use the sale of an asset to deal with this extra liability more flexibly at that point in time.

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BMC
Regular Contributor

18 Posts

Posted - 14 March 2021 :  22:01:44  Show Profile  Reply with Quote
Hi all,

Thank you for the warm welcome and the incredibly detailed information. I really appreciate you taking the time to reply back to me.

Sorry for the delay in my response. I have been discussing our situation with my wife for a couple of weeks now and we just found out our TD has now been transferred to another company.

The new company seem to be very good and understanding. I understand that exiting in 2021 is too early, but we are entering our 4th year and was considering waiting until the 5th year to see if they would then consider finalising the TD one year early. Is this something that they would consider and be more likely to agree to?

Thank you again for your guidance.

BMC
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TDA (Debt Adviser)
Trust Deed Expert



13734 Posts

Posted - 14 March 2021 :  22:18:35  Show Profile  Reply with Quote
Hi BMC,

There certainly is an issue connected to the usual four year legal minimum term of a trust deed.

Once that's out of the way there may well be more flexibility to address the additional liability more flexibly, perhaps via the sale of an asset for example.

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BMC
Regular Contributor

18 Posts

Posted - 15 March 2021 :  07:50:49  Show Profile  Reply with Quote
Hi TDA,

Thank you for your reply.

That is great. My previous TD did say I could use the sale of my car to pay it off earlier than the 6 year term. I was advised to make enquiries with regards to the car closer to the time. I will wait until I begin the 5th year before I propose the idea of them taking the car.

Thank you again. I really appreciate your help!

BMC
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BMC
Regular Contributor

18 Posts

Posted - 20 April 2021 :  21:01:25  Show Profile  Reply with Quote
Hi TDA,
We and my wife have been discussing our current PTD situation.
We have now entered the 4th year now. Can we ask another question?
Would it be possible to suggest that we sell the buy-to let house we have protected under the TD and ask for an early release if the sale raised enough money to pay the outstanding amounts due. The house has increased in value over the past 4 years.
We also have a car that is also protected that we do not use as I permanently work from home and would this be considered as part of the early settlement?
Surely there must be a way to negotiate and room to work something out.
Sale of house can possibly help towards:
Pay off TD fees
Outstanding balance
Has this ever been done and been successful? Me and my wife no longer want the buy-to let house. Could we make it work for us instead?
BMC
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TDA (Debt Adviser)
Trust Deed Expert



13734 Posts

Posted - 21 April 2021 :  09:02:57  Show Profile  Reply with Quote
Hi BMC,

So long as all of the following is repaid your trust deed can end early:

1 - The full amount you owed at the start plus...
2 - Interest on the debts plus...
3 - Your trustee's fees and costs

I suggest you liaise with your trustee about this so you can get some assurance that your plan is viable and will raise sufficient money to bring the trust deed to an early finish.

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BMC
Regular Contributor

18 Posts

Posted - 21 April 2021 :  11:23:15  Show Profile  Reply with Quote
So, if I owed 15 000 at the begining would it still be the same amount even though I've paid 7 000 back already? Would that not deducted and taken into consideration?

I have asked 3 times now for a breakdown of what i have paid, how much is remaining and still have not received any response from my new Trustee.

Many thanks.
BMC
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TDA (Debt Adviser)
Trust Deed Expert



13734 Posts

Posted - 21 April 2021 :  11:53:19  Show Profile  Reply with Quote
Hi BMC,

You are correct. Any money that you have already paid will count towards the total amount needed to end the trust deed early.

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BMC
Regular Contributor

18 Posts

Posted - 22 April 2021 :  09:19:25  Show Profile  Reply with Quote
Thank you very much TDA. This has truly helped us. It turns out the balance isn't as high as we thought. We also may have a third party to help us too.

We got confirmation that the Trustee fees are included in the monthly payments that also reassuring.

BMC
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