Welcome to the forum Stacey_robo07.

Was the original plan that you'd pay in for three years and then remortgage to release the equity at the end of that period?

If so I assume a remortgage turned out to be impossible at the time and you've been making monthly payments towards the equity ever since?

Are they now asking for £36,000 extra or does that include the £11,000 you have already paid?

How much do you expect the house to sell for?

How much is the mortgage that will be repaid when the house is sold?

Sorry to ask so many questions but I want to be sure I understand the background before answering.

For anyone else reading, the way equity in a home is dealt with nowadays has moved on a lot since 2011.

Hi thanks so much for the reply so yeah we agreed at the end of the 3 year we would either pay 24 months at £600 or remortgage the house which o don’t think we’ve paid the full amount they’ve asked for but it’s getting me down with thinking that We was only originally due £26000 we’ve paid almost £11000 and thr planning on taking and extra £36000 or even more when the house is sold. We have £150000 left to pay of the house, it’s valued at £230000 but we have offers of £200000 as they have instructed us.

Hi Stacey_robo07.

Thanks for clarifying that.

So the 24 months of £600 to cover the equity adds up to £14,400.

Would your trustee discharge you from your trust deed if that extra £14,400 in total was paid or have they required you to sell your home?

Or, to put it another way, have you chosen to sell the house to get the trust deed finished (or for any other type of personal reason)?

The issue with selling your home is that it could bring any agreement (assuming there is one) for a set amount equity to be paid from your surplus income to an end.

If it's actually sold and there's enough money generated your trustee is obligated to collect a sum (including everything you have already paid) to cover all of the following:

1 - Your original debt total (£26,000)

2 - Interest on that debt (which will add up to a lot over the 9 years that your trust deed has run)

3 - Their fees and costs (which will also be significant after operating your case for 9 years)

These three things are going to add up to a lot and I think that's where that £36,000 figure is coming from.

I guess I'm just wondering if there's another viable route to bring your trust deed to an end that doesn't involve the sale of your home?

So the trustee is basically taking £47000 from us to which, the loan that we are paying off at £24000 has interest frozen as we have statements come in regularly. The way I see it over the first 5 year which was the plan we was paying back £26400. Surely £20000 they don’t charge £5000 per year they havent done anything within those years. I get a statement every year. And they haven’t even paid the loan off yet so they have the money sitting there it just doesn’t make sense to me. I thought the purpose of these was to get u out of debt this is putting us both back into debt. Especially because they are making us take the price of the property down so we won’t even get full value. We would like to keep living here but aren’t able to remortgage . Thanks for the reply Stacey

Morning Stacey

Any agreement with property is usually nullified where the individual is unable to fulfil the conditions of the deed or the property is sold.
There are questions to be asked re advice though, as re-mortgaging at the end of the trust deed is usually not possible given the trustee interest in the property.

In every case, the trustee will apply for an inhibition that prevents that individual from securing further funds over the property hence why the re-mortgaging is unlikely.

Given the length of the deed, I take it there was a change in your circumstances that prevented an extension of payments at £600 over the 24 months?

Over the final 2 years. The biggest cost of the Trust Deed appears to be statutory interest calculated at 8% per annum. As your case has been opened for 9 years, that could potentially add 72% extra on top of the original debt.

You could always try and argue that a deal be done re the stat interest however it is down to the trustee whether they wish to propose that to creditors and the trustee is obligated to obtain creditors consent.
In my experience, it is likely the property will either be sold voluntarily or by a Court Action. The longer the deed remains open the higher the fees.

If your property is classed as a family home, your trustee requires permission from you to sell it. If permission is withheld, the trustee requires the Sheriff to provide authority to sell. In this case, the Sheriff will consider the needs of any children and then the need to the creditors. The Sheriff will either dismiss application, grant or most likely postpone the sale for a period not exceeding three years (in practice it is usually 12 months).

The allows you to negotiate with the Trustee as this action involves high costs and if you are agreeing upon a voluntary sale of the property, you could propose that you agree for the house to be sold on the basis you receive funds back. The Trustee should be open to this as the alternative of raising a court action is not ideal and incurs further unnecessary costs.

It is also worth mentioning that eviction actions are suspended due to COVID 19.

Your solicitor would also most likely make this recommendation.

Hope this helps.

Has your trustee given you a breakdown of how they have reached the £36,000 figure, Stacey? Might be useful to request it. As Paul says, if a lot of that is interest then creditors may be willing to forego that element if asked.

Hi thanks so much for your feedback. So I’m assuming the creditors is the loan provider? I was under the impression that all interest had been frozen?
So how would I look into staying in our family home? I would have to get intouch with an insolvency practitioner is that right? We really don’t want to move. Another thing is within the next few months I should be recovering quite a large cash amount from the sell of a family members hone. So I think certainly within the next 12 month I would have cash to pay them anyway? Thanks again Stacey

Hi Stacey,

The creditors are any firms that you owed money to when your trust deed began.

Creditors may not be showing interest on statements, but it would be normal for a trustee to offer them interest if their client's financial position changed and they could afford to pay it.

You should contact your trustee to discuss options. If you can evidence to them that you're due to come into money they may well be patient and supportive.