Hi poprey.

It sounds like a £500 fee some firms used to charge to abandon their interest in when a trust deed was signed and the owned property had no equity at the time.

Other firms did the same thing but without charging the £500.

If the money's to come from you it might have to wait until you've completed your contributions. If it's to come from someone else it could probably happen any time. Best to speak to your trustee to check on this.

Thanks TDA, it the abandonment fee a good thing then, it means while I am waiting for discharge that they won't be interested in the property, if that's what it means, and who benefits from the fee, is it the Trustee or the creditors, cos my wife has to pay the same, that's a total of £1000, why couldn't they just say at the beginning it's 44 payments each instead of 42.

If you agreed to this at the start it may not be optional poprey. It may form part of your obligations.

The money goes into the same general pot from which your trustee and creditors are all paid.

There's been many a debate over this and particularly the £500 x 2 for the same property!

The 'abandonement' is actually completing a form Form which is printed off, signed and posted to the Registers of Scotland. In all, no more than 10 minutes work at a push.

Mark

Thanks Mark, yes it's £1000 between the 2 0f us, does that mean we can't be discharged until this is paid, which in effect adds 2 months onto the end of the TD straight away. I am still not clear why we have to pay this at the end of the TD.

This is a common arrangement made by some Trustees and is basically a way of ensuring that more funds are made available for creditors. I guess the logic is if someone owns an asset, such as a property, which they would like to keep, then maybe they should be asked to pay a little extra for the privilege. Not something that any of the firms represented here would look for in a Trust deed, but still fairly prevalent out there I think.
Bottom line is if it was agreed as part of the proposals at the start then it is something you will have to pay before you can be discharged.

Hi poprey

If this was agreed at the sart, then it looks like this will require to be paid.

The payment is based on the AIB's Notes for Guidance which states that a property with no equity can be abandoned for a 'nominal' sum. It then states that the Accountant will not normally agree to a
sum less than £550! So the figure of £500 is certainly intriguing!

Mark

I also have a question regarding this fee. I singned a trust deed at the end of 2003 which became protected in March 2004. At the start it was agreed that I or a third party could pay the £500 fee to protect any equity in my property which at that time wouldn't have been much. During a phone call half way through the term of the trust deed I was informed that paying the £500 fee was still an option. The trust deed came to an end in 2008 only after I had obtained a secured loan on my property in order to pay the trustee (BDO Stoy Hayward)£10,000 instead of the original £500. Should the equity have been the value of the property at the start or end of the trust deed. I proceeded with this option as my family had outgrown the property and it was the only option to allow me to move on. It does seem however odd to find yourself getting into debt in order to be discharged from the mechanism I selected to get me out of debt in the first place. I was alos wondering if it was an option to try and reclaim the balance of £9500?

Welcome to the forum 012139.

These days the scenario is clear, the property equity is assessed at the start of the trust deed and any equity "fixed" at that point.

When you signed things were different. Properties were commonly valued at the end of a trust deed. If there was equity it was an opportunity to raise more to pay more of what was owed to the creditors.

If you had no equity at the start, as I assume you didn't, some firms offered people a chance to pay £500 to avoid a further valuation at the end.

If that £500 wasn't paid a further valuation might happen at the end and any equity that had developed would then become an opportunity to repay more to the creditors.

I'm making an assumption that this £500 wasn't paid by you (or a third party). Is that correct?

Hi 012139 and welcome to the forum,

Like TDA has advised at the time you signed your Trust Deed properties were dealt with slightly differently from how they are today. TDA has given a good rundown of how this process generally worked back then.

Do you still have any of the paperwork from when you signed the Trust Deed confirming what the position was regarding your property and the payment of £500? Do you know if a valuation and redemption figure for your mortgage was obtained at the start?

For the benefit of others reading this who may be considering a Trust Deed, the regulations are clear now that the equity needs to be established and fixed at the start of the Trust Deed and confirmed on a statutory form and as long as an individual keeps to their end of the proposal then the situation cannot be changed. It's a lot better today than it was a couple of years ago.