Hi Mark,

I feel exactly the same when telling clients about the changes due to come into force shortly. Even posting on the forum normally I would tell someone to take their time and think about things before entering but I don't want to say this as it could end up costing them an additional year of payments.

I attended an Accountant in Bankruptcy stakeholder event today in Glasgow regarding the proposed changes and there was still a lot of questions by people regarding these. It was really interesting to hear different points of views from people in both the private and public advice sector. The issue over outlays being excluded was a hot topic especially regarding the valuation of a property fee and who would pay this.

Are you expecting a sudden surge of trust deed applications, how long does it normally take after a meeting with a client to get all the paper work prepared for signing? I'm sure my paper work took a week!

It's a tough one!

Is there any sense of reverse deja vu? In some ways it's the opposite position to early 2008.

If you were working with a client who was considering bankruptcy at that time, and who was already apparently insolvent, you'd have had to explain to them that if they went bankrupt through the court before 1 April, they wouldn't be discharged for three years.

If they applied for bankruptcy to the AiB after 1 April, they'd be discharged after one year.

(In both scenarios, assuming the bankruptcy was awarded).

It must be hard to explain the facts, without it sounding like a 'hint, hint'! I don't envy you [8)].

Hi sparky1

There doesn't seem to be a surge as such, but it will be interesting to see what happens over the next 2 weeks.

The paperwork is pretty standard, so you could easily tick all the safety boxes ( sounds like matches) and do it within 1 day at a push.

Mark

When people get in touch they often tell us that they've been reading the forum for months, fairly certain that they were going to go ahead with a trust deed at some point in the future, but that it took a while until the time felt right or something extra arose that pressured them into taking action.

That's understandable and entirely normal, but I guess for anyone that has a strong preference to enter a trust deed (rather than sequestration/bankruptcy or DAS) there's a really strong argument and incentive to take some action before potentially exposing themselves to an extra year of payments after 28th November.

If this applies to you, and you're intending to act before 28th November, don't leave it too late. It can take a little while to put together all of the background documentation (identification, bank statements, payslips, creditor details etc).

Also bear in mind that for many people there's actually relatively little difference between sequestration/bankruptcy and a trust deed. Looking at it this way there's potentially no need to feel in any rush at all at the moment as the repayment term in bankruptcy (where deemed to be affordable) will still be three years after November 28th.

Hi TDA

It's a good point. The main difference between Trust Deeds and Sequestration is perception. People have always thought that the sequestration option is far more severe when in fact it is very similar. The process is different, however assets etc are all dealt with in a similar way.

Another statement that comes up frequently is that a Trustee will sell the property regardless of equity and it is only when you explain that the position re property is identical to trust deeds that it becomes clearer.

Mark

What year did trust deeds start and was it x 36 payments then?

Hi folks,
I think this 4 years instead of 3 years is interesting.
I looked at one month of trust deeds which were protected in December 2008 on the aib site and I think there were 2 which ran for 3 years. Most ran for about 4 ,many ran through to this year.
Also, could hardly find any where the trustee had been discharged.
Not very scientific,granted, is the data on the aib website accurate?
Many thanks
Ralph

Hi sparky1.

Sir Walter Scott's trust deed in the 1820s...

https://www.trust-deed.co.uk/sir-walter-scott.html

Hi sparky1

Trust Deeds have been around for a few hundred years. From (old) memory Sir Walter Scott signed one. In the old days I think you either had to pay the debt in full or a percentage possibly 75%.

The change was via the 1985 act and onwards. The 3 year thing was to bring it in line with sequestration. I think at the time Scotland had DMP's which rarely worked and Sequestration, so it was thought that the Trust Deed would be like a DMP with teeth.

Mark

Hi Ralph.

Obviously three years is the minimum (except when we're talking about lump sum payments only) and plenty of people agree to longer arrangements (though we've often mentioned here that this isn't always necessary).

Trustees have had difficulties in recent times getting their own discharge due to the VAT issue and PPI claim delays.

Hi sparky1

Just checked and it appears to have been developed BY Sir Walter Scott in 1826 after the failure of his printing business.

The things you learn on here!

Mark

Seems as though he was a bit naughty about declaring his true disposable income as well Mark!

I don't suppose it matters too much given that his creditors were eventually fully repaid (after his death).

Mark you must have used google, I know your an expert and all that!