Hi cooler and welcome to the forum,

Did both of you enter a Trust Deed or was it only you?

Also, what was the agreement with the Trustee at the outset of the Trust Deed regarding the property and the equity?

Do you anticipate that the property has any available equity at the moment?

Sorry for the questions but knowing the answers will help us advise you.

Hi Cooler.
Assuming your mortgage is in joint names and your post is as self explanatory as it appears, then I am afraid your assumption is correct.
I split from my partner three years ago and after the sale of our joint property she trousered £7,000 of the £14000 equity and my share went to the creditors involved in the td. I didn't see a penny of it.
Sorry.

David:
We both entered in the trust deed together in that the calculation of the payment was based on both our joint incomes etc.... although the deed is in my name.
The property has equity in region of £100k
If sale was done today she would walk with half, the rest would go to creditors and I would be left with zilch. is this correct?

If I known this from outset I would never have gone TD as the debt accrued was built supporting her and family.....

Her contribution to the income of the I.E was 721pm..... she walked 11 months ago therefore I lost that balance on the I.E and now she is stinging me for £680 child maintenance and wanting the house sold.....

Desperate I need help and fast.

A.D
Thank you for the reply.

Hi cooler,

From what you say it's only you who is actually in a Trust Deed. Even although at that point you jointly took the decision to enter it, you're the one subject to the terms of the Trust Deed.

A couple of questions again for you:

What was the agreement you made with your Trustee on how such a large amount of equity would be dealt with in your Trust Deed? In a Trust Deed if someone has equity then all of it or a proportion of it normally has to be paid into the Trust Deed.

Also, how much did your total unsecured debts amount to?

Will you be in a position to maintain your agreed monthly payment to the Trust Deed now that the household income has reduced and you are being asked to pay child maintenance?

As A.D. has pointed out, if the property is sold and you are subject to a Trust Deed then your share of the net free proceeds will be ingathered into this and used to pay back as much of your debt as possible. You would only receive funds from the sale if all of your debts plus interest plus costs were paid in full. Anything then left over would come to you. If there isn't anything left over then you wouldn't receive any money back unfortunately.

Your wife/ex-wife would receive her full share of the net free proceeds.

Hi cooler

From the information in your post, I assume you were made aware that one half share of the equity would require to be paid to the trust deed.

When you sign the trust deed, the trustee has a responsibility to deal with your one half share. Normally this would require the agreement of your wife for any sale other wise the trustee would require to raise an action of Division & Sale to force the sale.

The current position probably falls into 2 possibilities, either your trustee will not agree to the marketing & sale of the property, which is unlikely, and your wife would need to raise the action of Division & Sale or your trustee agrees to the sale and in effect there is 100% agreement to the sale.

Sorry if this sounds clinical, however these are the only realistic options available.

Can I ask what your original thoughts/agreements were in relation to releasing your half share equity.

Mark

TDE's

My wife has been a beneficiary of my debt during the 16yrs living together, how come at the execution of a trust deed she is automatically insulated and free from it?

Surely a judge would see it differently if this went to court?

If I was divorcing now with no trust deed in place then both our assests and liabilities would be split equal share, yet an execution of trust deed implies I am insulating my wife from any of the debt accumulated in supporting my family and she walks away with half my property........?

Hi cooler.

I can understand why you'd consider this to be unfair given the circumstances, but the cold hard facts are that you're fully individually responsible for a debt taken out in your name.

The other cold hard fact is that, as joint owners without any legal agreement stating otherwise, the equity in your property would usually be shared upon sale.

As your half of the equity vested in your trustee when you signed the trust deed they'll normally be looking to gather that to help repay your creditors.

Is that fair? I can see why you would think that it isn't. We've heard the same from many people when a relationship comes to an end and one party is saddled with most or all of the debts. It is however pretty much what you signed up to when you entered the trust deed.

How much were your debts when the trust deed began?

How were you planning to pay over your share of the equity before your personal circumstances changed?

Hi cooler

It is an interesting point. As matters stand, the trust Deed will deal only with your debts and your assets at 100%. The full value of any of your assets/contributions etc will be applied against 100% of the debts. Your wife's one half share of the equity at this stage is unaffected and she has no liability for the debts.

I think the only recourse would be a decision in any future divorce proceedings, although this is not my area of expertise by any stretch, where a sheriff may assess her responsibility for benefiting from the proceeds of the debt and allocate something from one half share of her equity. However that said, it would then be looked on by the Trustee and almost certainly would vest in him for the benefit of the creditors.

Sorry it's not a better or more favourable analysis.

Mark

TDE's

Can I ask one further question.
Assume that Trust deed is complete and property sold after.
Given that she walked out on me at a time when I still owed all my creditors money and therefore the equity balance was effectively null, this would be the criteria used for normal divorce proceedings.

Therefore can same be applied post TD where the cut off date is date of separation for deciding who gets a share of what?

I cannot believe that this woman is entitled to a 50% split share of my property when the debt accrued was in support of her and family and she walked out leaving me to fund the TD and thus securing house equity.....

C.

Hi cooler.

The equity balance, as far as your trustee is concerned, is the value of your property minus any mortgages secured upon it. The unsecured debts aren't relevant in this calculation. Your share of this equity vested in your trustee when you chose to sign a trust deed.

Your trust deed cannot be completed until your share of the equity has been dealt with. This could be achieved through a sale of the property, or if you can raise the full sum due by other means. If you cannot raise the full sum due by other means your trustee will probably need to sell the property and will not discharge you until after that has been done.

I can understand your frustration at how this might all play out, but I'm not sure that comparing the outcome that might be achieved in divorce proceedings with the outcome required as a result of your trust deed is useful to you. The processes and principles involved are quite different and separate.

Hi cooler

I'm not too sure what you are asking to be honest.

The Trust Deed would not complete until the equity had been released. On this basis, the Trust Deed would be live and she would receive 50% of the net equity.

If the Trustee received the half share equity by some other means and discharged the Trust Deed, then the equity would be split 50/50 although, again, this could be subject to any court decision.

I suspect she is entitled to 50% as she is joint owner of the property. the existence of debts in terms of the Trust deed would not be a factor as these are separate issues. This would only change following a legal decision by the court, but only if the Trust Deed was not in place.

Not sure if this answers the question.

Mark

Hi Mark,

I understand she is entitled to 50% of equity no problems there, the issue I have is with the offsetting of debt.

In normal divorce procedures with NO TD involved, the settling of debt is based equity of property offset with the collective debt of both partners, the balance of which is split 50/50.

The date for deciding this is normally the 'separation Date'.

My question is that should a TD be involved and I have settled TD with creditors, further down the line say a year later divorce proceedings are executed can the same separation date be used to decide the split of equity?....

I am solely funding the TD since she walked out on me so why would she be entitled to full split of the equity I have released through the debt mgt plan.?

Hope this makes sense.

C.

Hi cooler

I may be going into the legal/non trust deed advice area, however if the Trust Deed is finalised and both you and the trustee are discharged, then the equity position would return to you both ie you would both be entitled to half a net 50/50 split.

If there was an action after the discharge, then you could argue that payments in respect of the previous debt which you alone dealt with under the Trust Deed should be taken into account in calculating the split. Any decision would of course be at the discretion of the Sheriff.

Mark