Welcome to the trust deed forum steveo.

It sounds like good news that your trust deed firm is allowing this sale to take place according to your solicitor?

On what subjects are you looking for firm answers from your Trustee?

The 3rd Creditor bmw/finiance so far to date have declined to lift the inihabition order.My concerns are after my trust deed has finished will they will still be able to pursue me for any oustanding debts owed...Does my trust deed company have legal agreement paper work drawn up and does it become protected along with my original trust deed?

Many thanks this forum has been life saver intialy when deciding what to do last year.

Hi steveo

BMW should have been included in your trust deed as an unsecured creditor from the start - reading between the lines it seems they are not a secured creditor, just have an inhibition registered in their favour.

Therefore they will be included now and will have to write off whatever debt remains after they have received their final dividend and the trust deed ends.

The situation with the inhibition is not quite so straightforward however, as a trust deed does not automatically cut down an inhibition like a sequestration would. Therefore I would have thought that if they chose to be awkward then they could stop any sale going ahead - your solicitor would need to clear it with them first.

If they refused to cooperate then it may be that your trust deed would need to be converted into a sequestration.

I take it you have been informed that the shortfall to the mortgage company and to HBOS will be covered by the trust deed too?

Hi Kevin
We were advised by hjs that bmw could not be included in the trust deed as they had a inabition order over myself and house and there monthly payment was included into my income and expenditure,i did raise this on a few occasions with hjs and received the same answer.When i spoke to hbj gatley who represent bmw last month they were suprised that they had not been informed of my trust deed,and would therefore submit a claim to hjs.
Yes we were advised that HBOS 70k and mortgage deficet 20k would be added into our trust deed along with bmw £10k.and our trust deed term would increase to 5years and rise by approx £50 per month,however our intial period of payments would be included (7 months).
I was of the understanding once a trust deed was protected that no further debt could be included even thou this debt existing at the time of the trust deed.
My partner and i are seperating hence why we decided to accept this offer,sequestration is something i was hoping to avoid,as the trust deed which hjs said was the most complex case they had dealt with is doing us well at the moment,however maintaing the interest payments to hbos and a substanial mortgage each month has taken it toll on us,as after our 3 year trust deed we would still have a substantial overdraft with HBOS.
We are now running the risk off the buyers pulling out as this has now been on going for 4 months,there entry date was the end off feb.

Hi steveo

Phew! That's like an exam question.

Could you advise me if the inhibition was served before or after you signed the Trust Deed.

Also, the advice on the property is confusing a wee bit. I assume you have a mortgage and secured loan with HBOS. You mention the other security, do you mean the inhibition. If you do then the inhibition will have no effect as this will not stop the sale, it only attaches itself to net funds on sale.

It's an interesting point as to whether your trustee will consent to the sale or intends to abandon the property. If he consents, there would need to be clear provisions that he is not personally liable.

I'm also surprised at the extension. Was any reason given?

Sorry I've asked as many questions as I've answered.

Mark

Good point about the inhibition only affecting things if there net funds available after the sale, Mark - the negative equity had momentarily slipped my mind.

I guess the extension is to compensate creditors for the dilution of their dividend given the increase in creditors sharing the funds gathered in.

Hi steveo

A couple of other points. I'm amazed at a firm which states that this 'was the most complex case they had dealt with' based on the information you have provided, it is fairly standard.

If it was me, get the consentof the secured creditors that they will accept the shortfall as liability in the Trust Deed and there will be no personal liability to the trustee. If the Trustee is signing the disposition, this may leave them open with the inhibiting creditor (I dont see how though) The sale goes through, BMW's claim becomes an ordinary claim with no inhibition and the Trust Deed finishes on the 3 years as the Trust Deed allows for a variation in the original agreement.

At a guess, I would say your Trustee is based in England and is running your Trust Deed along the IVA lines which personally is incorrect. Same rules and creditor consent do not apply, plus your trust deed will almost certainly contain a section which states the undernoted. Point (ii) is crucial and defeats the argument of your Trustee.

Termination of Trust Deed

This Trust Deed shall terminate on the earliest of the following events:

(i) an award of sequestration of my Estate (whether or not such
award of sequestration is subsequently recalled or reduced);
(ii) the final distribution (which, for the avoidance of doubt,
shall include a nil distribution) of my Estate by my Trustee in
accordance with this trust deed;

Mark

Hi Mark
The ccj /inhibition was served prior to me going into the trustdeed.Yes we have a mortgage and the 70 k is a secured loan over the property.Our Trustee has agreed to the sale of the property as its a negative equity sale. We were advised " As there would be a large increase in unsecured debt due to the sale of the property,so the dividends the creditors would receive dropped well below the necessary 10p/£ they require for a trust deed.This in turn means we will have to extend the duration of both your trust deedsand increase the payments.The payments you've already made would still count towards your total deed contributions."
The lack off communication is the biggest problem im facing at the moment with my trust deed company as they seem relucuctant in providing information to hbos and our mortgage lender who have asked them for info on proposed payments and time scale , they havent replyed to my emails or calls which is my biggest concern.The advisor who seen us via our finacial advisor again seems to have dissapeared My solicitor has also been chasing them to provide the information for the sale to proceed.
Im starting to feel more and more uneasy about the situation.

Hi mark, not sure what you meant by this,im presuming if any off our 3 remaining creditors decided to bankrupt me then our trust deed will take the below steps?
Termination of Trust Deed

This Trust Deed shall terminate on the earliest of the following events:

(i) an award of sequestration of my Estate (whether or not such
award of sequestration is subsequently recalled or reduced);
(ii) the final distribution (which, for the avoidance of doubt,
shall include a nil distribution) of my Estate by my Trustee in
accordance with this trust deed;

Hi steveo

No. The creditors have agreed and cant petition for bankruptcy.

What I was meaning was that there is absolutely nothing to stop a Trustee discharging a Trust Deed if the dividend fell below the 10p they mention. They are using the IVA model.

As a wee example, excluding all of the above, if you were in a Trust Deed and the dividend was agreed with creditors at 10p in the £ and the Trustee agreed to total fees of £3000. If your trustee was to do extra work on the trust deed or change his charge out rate etc and his fees ended up at £4000. The dividend would fall below the 10p, so would he look for you to make up the difference? The answer is NO he couldn't.

I would hazzard a guess that 70% of Trustee's pay a lesser dividend than that agreed at the start and all these close with no problems.

Mark

Hi steveo

I have to agree with Mark, your Trust Deed does not have to be extended. The dividend creditors are advised of at the beginning is only an estimated dividend, and the Trustee is not bound by it. Obviously they try to give a reasonable return to creditors, but things do change in people's lives, and you can't help that. I don't see a problem with the Inhibition, it will just fall away, and become an unsecured debt.
With regards to HBOS, the shortfall is usually included normally because houses are repossessed, but if it is being sold, the I also think you need to get something in writing from your secured lenders on their intentions re the shortfall.

Many thanks guys for your input....our mortgage lender have agreed to the sale..however it also states clearly on the negative equity docs that we would be liable for any shortfall,in principle they have agreed to myself via email that they would accept the shorfall via our trust deed....i have to mention that they are being repayed 680,000 on a 700,000 mortgage from the sale and are very keen to settle,as the past 18 months we have been in and out off arrears(now fully upto date with mortgage)HBOS again have agreed to lift the 2nd security,however want some sort of proposal in place before they do this,my last communication with my trust deed company was that they required all creditors to make a claim before commiting to a payment plan.Re the extension i have emailed them as i think mark is correct in saying they are running our trust deed along the same lines as a IVA.Being able to continue the way we are and finishing in 3 years would be a great relief.
many thanks again this is a invaluable website.

Hi steveo

I think the shortfall is the key point here. If it was me, i would look very closely at the position re the shortfall. This is a contingent debt and falls to become a debt like all the others, no preferences whatsoever.

There is no requirement for an extension of the trust deed unless specifically written into the original proposal re the 10p.

The banks choice as i see it is accept a £20k shortfall and a small divident re the trust deed or repossess and expect a shortfall closer £120k

Mark

I agree with Mark - the mortgage lender and secured lender cannot insist on repayment of the shortfall. Any shortfall is caught within the trust deed and your obligation ends upon your discharge from the trust deed.

The only reason why you would not be discharged from your trust deed would be if you were sequestrated due to your trustee successfully petitioning the court for this to happen, or if your trustee refused your discharge on the grounds that you have not met your obligations.

Was it always understood by your trustee that you wished for the property to be sold, or are they likely to see this sale as you reneging on the original plan, steveo?