By taking a mortgage payment break does that not reduce the amount of equity in a property which effectively belongs to the trustee for the benefit of creditors?

Just throwing the question out there,hope you get sorted out Fred.

Paul

Yes it does Paul and this is why I'm thinking they may not allow it. My property is in around £12,000 negative equity though so missing a mortgage payment of a few hundred pounds isn't really going to make much of a difference.

I have 1 year left in my Trust Deed so doubt that my property will have any equity in it when the deed finishes. I was also given the option to pay the £500 nominal fee before the Trust Deed finishes, which I intent to do.

Fred- (not from experience but other posts on here.)
The £500 seems to be a historically used figure which suits some IP's to perpetuate but Mark and Shona have both said it is not what they charge and it is not a prescribed or pre-set amount. Have you already agreed to this in setting up your arrangements 2 years ago?

The £500 was much more common a couple of years ago Pamjo.

None of the three companies that answer questions here charge it, but two out of the three did two years ago.

It's one of those things where the "market" seems to have shifted a bit.

Not too sure about the £500 - I was just told that I can have a 3rd party pay it or extend the trust deed by a couple of months at the end to pay it in order to protect the equity. I really doubt there will be any equity in my property when the trust deed finishes anyway.

If you are in negative equity then a mortgage payment break wont make much difference then.

Paul

To be honest, the £500 was dropped by firms (mine included) for commercial reasons. £500 was the figure the Accountant in Bankruptcy suggested in their guidance for Sequestrations. As Trust Deeds are treated very similar to sequestrations, IP's used this figure for Trust Deed as well. However, Trust Deeds can have more flexibility if creditors don't object. Once a few firms stopped charging the £500 in Trust Deeds, many others followed simply to make their firm's Trust Deeds as attractive as their competitors. It really is that simple.

And I think Mark said for Bankruptcy too the guidance is for a 'nominal fee' to be charged, unless I picked it up wrong and assumed both were the same?

The guidance for bankruptcies is for the trustee to seek a "nominal fee". Whilst no figure is put to this, the Accountant in Bankruptcy herself looks for a payment of just over £500 I believe in respect of properties with little or no equity in cases where she is the trustee.

Quick update - got the repayment holiday approved! Now I am worry free (well for now anyway) Thanks for all your advice guys!

Hi Fred

Well done. Common sense prevails.

Mark

It's an interesting point this £500. IPs can't be following the AIB' guidance as she mentions £550.

Also, in Trust Deeds there is no requirement for formal abandonment via form 21 to the registers which I understand involves legal costs/registers costs of same. We have 2 forms at £15 each to register inhibtion and deregister it.

On a final note, I spoke with the IP monitors who warned that any firm charging £500 or even £500 x 2 ( incredibly!) should be warned that they will need to fully justify the cost via time costs and outlays.

Mark

Thanks Mark.

Oh. and my firm are charging me £500 x 2......£500 for me and £500 for my partner for the same property. I have been told previously that this must be paid. If I don't have a 3rd party to pay it then the trust deed will be extended by the relevant number of months at the end to cover it.

Hi Fred

This is just nonsense. Was the 2 x £500 contained within the proposal to creditors. I assume this would be in the statement of affairs produced and possibly in the Trust Deed document. Could you check.

Mark

Seems excessive and just an excuse to add fees!!

Paul