Possibly. As an asset of the Trust Deed estate your Trustee will have an interest in this sum. How much I hear you ask? Will that will depend on the following:

1 your conduct in the Trust Deed to date
2 Have you missed any payments
3 what you proposals are
4 what the payout has to be utilised for - a new car etc

I would advise your Trustee of exactly what you have received, what you intend to use it for. They will respond asking you for a proportion of this sum depending on the above. This may be all, half or none. Be honest and things should hopefully be ok.

Criminal injuries is excluded and won't go to the trustee, however a lot will depend on the nature of the claim. If it is for loss of income, it would be viewed as income and a portion sought, however general compensation will likely vest in the trustee.

Mark

I am due family members a sum of money and was hoping to pay them off with this pay out, would the trustees find out about this claim if I do not advise them of this? I dont want to do anything that may breach the terms of this trust deed but do not want to hand over all this payment either.

I must advise you not to do that. You will be in breach of the Trust Deed terms on several levels. By not informing the trustee of a payment, and preferencing a creditor over the general body of creditors.

Best be honest with he Trustee. Not worth the trouble and stress. These things are set up to be fair and its the Trustee's job to decide what happens. Just let them deal with it.

Thank you for your advice.

Hello Leahsmum2004.

I would agree with Rob. There are plenty of ways that could come to light, potentially serious consequences, and you'll have the worry hanging over you for a long time.

If it turns out you can keep an element of the payment hopefully you can do something to help your family without jeopardising dealing with the remainder of your current financial situation via the trust deed.

Personal injury claim payouts can certainly be viewed as a windfall that a trustee may seek to be paid over for the benefit of creditors - potentially in full I'm afraid. You'd be best served by being fully up-front with your trustee and trying to make a strong argument for being able to keep a proportion of any funds given any hardships you have had to suffer as a result of the accident.

Hi Leahsmum2004,

I understand your finances will be tight and it might seem like a good idea and very tempting at the moment to use some of the funds to pay family members any money you owe them. When money is owed to family members or friends it becomes difficult for people to treat them the same as a credit card bill, loan or overdraft but as people have said previously it's an unfair preference to pay them their full money back and not the rest of the creditors.

I would contact your Trustee and explain your situation, what has happened to you and as Kevin said make an argument for being able to retain some of the funds if your successful in your compensation claim.

Do let us know how you get on with your claim and what your Trustee decides.

Thank you all for your advice, I'm truly gutted that I might not be able to keep any of the money but I understand the reasons. I ll hopefully hear of settlement sometime within the next month. I will let you know of outcome.

I think Trust Deeds should be about balance, so hopefully the Trustee will meet you in the middle somewhere.

Mark