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Mac1970
Just Joined

1 Posts

Posted - 04 December 2021 :  21:43:43  Show Profile  Reply with Quote
Hi, I am about 2 and a half years into a 5 year Trust Deed. The fifth year payments are equity payments because I part own my fathers house along with my brother. When I entered the Trust Deed my total debts were 50,000+ however over the course of the 5 years my total contributions have been calculated as approx 36,000. My question is, what would happen if god forbid anything should happen to my dad in the remaining 2.5 years and his house is sold and any inheritance I receive on top of this. Would I have to repay the full 50,000+ or would it be a case of repaying the calculated contributions of 36,000? Also I am aware that I may need to repay statutory payments and Trustees costs on top of this, how much are these likely to be? Many thanks for your help in advance.

TDA (Debt Adviser)
Trust Deed Expert



13875 Posts

Posted - 05 December 2021 :  09:02:27  Show Profile  Reply with Quote
Welcome to the trust deed forum Mac1970.

In terms of the equity in the property, this doesn't seem like it would be a problem provided that the house was not sold. As I'm sure you're already aware, the extra year is effectively there so that you don't have to sell the property to hand over the money.

This changes if the property is actually sold. The trustee would be obligated to collect in a total sum (including what you have already paid) that covers your full debt at the start of the trust deed (50,000), their fees, and interest on the debts.

The same would apply to any money or assets that you might inherit during your trust deed.

You might want to check the wording of your trust deed because it's possible that these requirements may no longer apply after you have completed the minimum four year trust deed term.

Statutory interest may be applied to the debts, which is 8% per annum.

You should check your documentation, or contact your trustee, to assess how much their fees are (and would be in certain scenarios). It will amount to thousands of pounds and may well include them charging a percentage of the funds that they collect in. A percentage element could significantly increase the total fee if you end up paying over more than was initially expected.

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds    
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