Hi goneunder.
I'm afraid I have no insight into why your trustee and you deemed it appropriate to extend your trust deed three years ago.
Perhaps it was to try to avoid the loss of your home by giving you the best chance of dealing with the equity?
How do you recollect what happened at that point?
Tda . When I couldn't get a mortgage or a loan we agreed I would continue making the monthly payments . There was no discussion that this would fall short of the total equity.
It would have taken me 5 additional years to pay off the equity so I really don't know why i wasn't forced to sell at this point .
David , I think it's a great idea to allow people to make additional payments to cover the equity and to have the proposal accepted at the start . This could have really helped me out !
Hi goneunder.
I think the difficulty is whether creditors would accept that proposal at the start. If it involved them not receiving a large sum of money that they might otherwise have (perhaps as a result of bankruptcy and a property sale for example) it might be commercially unappealing. If the sum of money were smaller the logic changes due to the potentially high costs of making someone bankrupt and the reputational risks that can be associated with that.
The Protected Trust Deed regulations do state that in order for a Trust Deed to qualify for protected status then all assets must be made available to creditors. To my mind this surely means all available equity in a property too.
There is certainly room to allow for the vagaries of the property market and the likely costs of marketing and selling a property, which can mean that the equity figure can be reduced to some extent, but in cases where there is a significant amount of equity then this only goes so far.
The type of arrangement that David mentions is very common in IVAS down south, but much less so in Scotland I would think. At the end of the day, they are two different products governed by completely separate legislation.
There is nothing to stop a Trust Deed being set up where large amounts of equity are being ignored, but all creditors would really need to agree to this and would it then qualify for protected status? I feel it probably wouldn't, unless it was fully compliant with the regulations concerning leaving a dwelling house out of a trust deed altogether, which is a separate procedure.