Your trustee will have contacted them to see about reclaiming PPI. If successful these funds would go into the pot for the benefit of all of your creditors along with your contributions to the Trust Deed (less their costs incurred in making the claim).

Hi thanks for your reply I'm in the middle of paying my trust deed off, I've received a quote on how much I've to pay fully to my creditors, statutory interest & fees so the PPI would come off this balance?

If it has actually been received by your trustee Hf1998.

I dont think anything has been received by my trustee or if it has it certainly hasnt came off the balance. If there is PPI & it's received after I've cleared trust deed what happens? Why was I not informed the trustee would be looking into PPI?

Depending on exactly when you signed your Trust Deed it may have been that the Trustee was unaware that such a requirement existed. There were certainly many examples of individuals who had signed a Trust Deed and were in the course of completing it when the relevant guidance was issued to trustees by the regulatory bodies.

Certainly though trustees are required to advise that assets vest in the Trustee, such as inheritances, lottery wins etc. Any debts owed to those entering a trustee also vest in the Trustee hence the position with PPI. Certainly more recently trustees would make a point of specifically mentioning the position with PPI as it is very much in the public consciousness.

In the event your Trust Deed has been completed and your Trustee discharged then the area becomes a bit murkier as there is a current legal case going through the courts to determine the position. Some trustees argue that the Trust Deed can be re-opened - as happens with sequestration - in order to deal with the PPI funds and issue a further dividend to creditors. A number of other companies have taken the position that this is not the case and any PPI issued to you after the trustees discharge would either go straight to you or - most commonly in the case of RBS - be used to off-set the sums written off by the Trust Deed. This is also a legally ambiguous position taken by the bank but no-one has yet challenged them accordingly, certainly that I am aware of.

If you have paid your debts, interest and costs of Trust Deed in full in order to be discharged early then you should have no further obligation and any PPI payout should be yours to keep.

Hi voice of reason thank you for your reply and information. I have never tried to claim PPI on my own had never given it a second thought until received text from bank. My trustee never once informed me before signing trust deed that they automatically go for PPI, I wasnt informed of windfalls etc either. I'm in the middle of clearing my debts, interest & trustee fees. Am I right in saying if PPI s successful it goes towards my creditors, or is it classed as a windfall?

In the event that you are paying back everything including interest and fees etc any surplus funds should be returned to you.

If the PPI is successful it would typically go into the Trust Deed pot certainly. In this case that may be a good thing as it will pay off the debts, fees and interest quicker.

One thing to be aware of though is that, in recent trust deeds, trustees are able to claim a percentage of realisations - typically 20% - as fees. As such, if a PPI award is made prior to the discharge of the Trust Deed it is highly likely that 20% would be claimed as fees.

A windfall - or acquirenda - would typically go into the trust deed pot for the benefit of creditors. Whilst there is a slight difference in that the claim for PPI vests in the trustee when you sign a Trust Deed, in actuality there is no difference in the way those funds are treated.

Thanks k's voice of reason...Hopefully I have PPI then so can go towards my creditors. I'm already having to pay £6000 fees which to me seem a bit excessive for being in a trust deed for 7 months, seems a bit unfair for trustee to take another 20%! I'm just wondering why at consultation nothing like this was ever explained to me

Hi Hf1998.

We'd be guessing why you weren't told. However, it's a perfectly fair question to ask your trust deed provider if its of concern to you.

It just makes me so angry I wasn't informed of everything the trust deed entails!

If you weren't properly informed then I would certainly complain.

Hi tinsoldier the problem with complaining is how do I prove that I never received proper advice & information from my trustee. I wasn't even aware of how difficult it is to be released from a trust deed, I never even read the paperwork just signed it which was really foolish of me. I honestly wish I'd dealt with my debt in a different way.