hi qwerty12345,

Welcome to the forum! In response to your question, i've seen it treated in all sorts of ways over the years, depending on the specifics of the trust deed and who the IP is. Hopefully some of our resident IPs can provide current working knowledge of best practice, and what this might mean for you.

Thanks

Paul

any thoughts @nm89 ?

Hi Qwerty,

The only way to "repay" a Trust Deed early is to pay the full balance of the debts at the date of granting, plus statutory interest and the costs of the process.

Contributions are not a fixed amount - the agreement you make with your creditors is that you will pay what you can reasonably afford for a period of 4 years. The amount is assessed using the Common Financial Tool and is reviewed annually, though you should make the Trustee aware of any changes which occur between the reviews.

Additional income (such as bonuses) must be declared to the Trustee. Technically, the full amount of the bonus can be claimed by the Trustee, though they may agree to take a split share. 

Failure to declare and/or transfer the proceeds to the Trustee is likely a breach of the terms of your Trust Deed and grounds for refusing your discharge (meaning you will not be free from the debts at the end of the process).

As Paul says, some Trustees take a more lenient view than others when it comes to sharing the proceeds, it is worth asking if they would allow you to retain some of the bonus.

Thanks,

Nick

Posted by: @qwerty12345

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Good morning all! Hoping to get some clarification on early repayment.

If I were to receive a bonus from work, that covered all future contributions, would that be sufficient to end the trust deed or would I be required to pay considerably more? I.e. the actual total debt owed including any that had been written off as part of the trust deed?

 

I've seen a few older posts on this topic so was hoping for a more up-to-date opinion on it.

 

Thank you!