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Topic starter
24/02/2016 2:29 pm
I feel I've been given poor advice, not sure who is right or wrong. When TD was set up I had a property that I gave back to the lender, I thought shortfall would be circa £35k and that was what I put on the forms. Prior to TD being protected lender sold the property very cheaply and the shortfall is actually £110k. I was told be IP that it didnt matter and because they had accepted the lower figure, that would be what theyd get. Now they tell me that lender never made a claim, and they are entitled at any point to make the claim for the higher amount, is this correct ? Because TD is for 5 years, and they suggested extending it longer should lender make higher claim, I've said I wont be extending beyond 5 years term. Are they correct in what they say ? If they are it makes a mockery of a PTD !
24/02/2016 4:10 pm
A difficult situation and I can understand your feelings, jimbim.
When did you sign the Trust Deed exactly? Regulations have changed a few times over the past few years and it might make a difference in this kind of situation which rules your trust deed is under.
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
Topic starter
24/02/2016 6:07 pm
December 2014 and was protected May 2015
24/02/2016 11:08 pm
OK thanks.
If the creditor in question hadn't already made a claim then they are certainly entitled to claim for the higher amount. This does create a potential problem as the much higher total debt figure means that all creditors are likely to be getting a significantly reduced return than was estimated initially on the Trust Deed proposals.
In this scenario, the trustee has to highlight this issue to creditors and advise how they intend to proceed, ie either:
1) continue with trust deed on same basis as before, with creditors getting a lower return than they anticipated
2) extend the trust deed term so that the creditors can get back what they originally expected
3) terminate the trust deed
It would then be up to creditors to object if they did not agree with the proposed course of action.
It sounds like your trustee is trying to strike down this middle road of option 2 so that your Trust deed should be able to carry on without creditors objecting because their dividend will be safeguarded by the extra payments.
Given that you knew about there being a likely shortfall at the outset and there was always the possibility that it could turn out to be more than expected, this should really have been explained to you at the start.
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
Topic starter
25/02/2016 8:36 am
Yes it's turned out to be a bit of a disaster. IP says that the creditor might not claim at all, but I doubt it. I won't find out till the end of the TD, and by that time its too late. I did raise the concern on the phone with the IP, and was told that once protected the creditors had to accept the proposal, I assume that all phonecalls will be recorded and I will have the evidence to take to court if required. So, it really does make a mockery of the system, buyer beware !!
