Hi expired.

So, it seems most firms take the view that an interest in a property ends when Form 5 is issued. The client has completed their obligations and is free to move on. The restriction on the property (the inhibition) is removed as part of the closure process.

We've heard a few times recently that one or two firms see this differently and consider that their interest in the property remains in place beyond the issue of Form 5 and lifting the inhibition.

If your debts have been fully repaid, along with interest and the trustee's fees plus costs, it's hard to see what interest there would be in a property (though I suppose it's possible previously undisclosed debts could come to light prior to the trustee's discharge).

I can't advise you legally whether the position your trustee is taking (different to some other trustees) would stand up to scrutiny.

Thanks for your response.

As I pushed for more answers and stated that I have sought advice from other trust deed experts and professional bodies I now got this response.

The Inhibition request for removal is usually done at the same time as the Form 5 but generally you are not notified of the removal as we need to await for confirmation that it has been removed from the register.

The Inhibition should therefore have been removed before the Form 7 is issued.

If you were selling your home the solicitor would do a search and if the Inhibition had not been removed they would contact ourselves and we would re-request the removal.

why does it take six months to fully discharge when you are paying off the full debt, especially when they have the latest technology and instant banking at their disposal.

Whilst I would suggest that 6 months appears excessive in the event the debt is paid in full, there are still a number of administrative processes that require to be completed before the case can be closed.

A number of these steps also require appeal periods to be passed before the Trustee can take the appropriate action. An example of this is that creditors get a 4 week period within which they can object to the adjudication of claims. There is also a 14 day appeal period in relation to the issuing of the Form 6.

These steps were all put in place to act as safeguards for those with an interest in the specific insolvency process and must be completed. Although it is recognised that this is frustrating for those in circumstances such as yourself.

Kevin would I be right in saying that by paying the full debt my trustee could possibly remove the inhibition so that i may sell the house so as not to fall behind in mortgage payments. To safeguard this scenario, after said full payment from my lump sum pension, I have three thousand pounds left which should cover 3 months of mortgage payments and the four week or six week period for case closure as houses in my area do sell quite quickly.ps I now have a new trustee as the original one has left the company. my dilemma is that i am volunteering to use almost all of my pension to pay the creditors which under the circumstances if i took the trust deed to full term their payments would be significant less and the fact that i am left with a mortgage hanging over my head, in my situation time is valuable to me to ensure that this lengthy process does not leave me in a vulnerable situation which the outcome may mean losing my home. Basically if it went to the full six months for processing I could not pay my mortgage during that time.

I think the processing should be prioritised and a lot quicker especially when a client is paying the full debt. Their is no reason to delay the inhibition.

This is an extract from a trust deed website:

After your trust deed is finished, you are discharged from it, as long as you have met the obligations agreed to at the start of the process.

The discharge process should take around a month – if it’s taking longer, contact your insolvency practitioner to ask why.

My question is that if it takes only a month does the inhibition get removed to allow me to sell my home. Once they receive full debt payment,can i check out a website to see if the inhibition has been lifted?

Kevin you said "creditors get a 4 week period within which they can object to the adjudication of claims. There is also a 14 day appeal period in relation to the issuing of the Form 6".

Can you elaborate more on what this means in laymans terms?

Why would they object?

What is Discharge on Composition?

Thank you.

Apologies expired. I may have misunderstood one of your previous posts. When you asked why it takes six months to fully discharge. I was of the assumption you meant the Trust Deed would be fully completed as opposed to you receiving your discharge in that time.

In the event that you have paid all sums in full there would be no reason for your discharge to take that time. A more realistic timescale for that be 3-4 weeks, to include the discharge of the inhibition and issuing the relevant Form 5.

In terms of checking if the inhibition has been lifted. The Inhibition Register can be checked at a small cost by those with access. If you have appointed a solicitor for the future sale of your house then they can likely check this for you.

Adjudication of claims is the judgement of the Trustee as to what creditors are entitled to receive by way of a dividend from the Trust Deed. Creditors have the right to appeal this judgement.

The Form 6 is the Trustee requesting his discharge and again there is a statutory appeal period which must be passed.

Thanks kevin for the info, four more months and my trust deed will be paid in full and looking forward to my trustee being discharged.

I am now paying early my full payment of loan due to creditors and trustee from lump sum pension this year and keep getting different answers to my question. I asked once I paid full amount would the inhibition be removed so that I could sell my house as I cannot afford to maintain mortgage payments, this is the first response: “The Inhibition request for removal is usually done at the same time as the Form 5 but generally you are not notified of the removal as we need to await for confirmation that it has been removed from the register.
The Inhibition should therefore have been removed before the Form 7 is issued.
If you were selling your home the solicitor would do a search and if the Inhibition had not been removed they would contact ourselves and we would re-request the removal.”

Second response: “Please be aware, even though your Trust Deed will be completed and your Property Equity paid, if you sell your property before the Form 6 is drafted (Trustee discharge papers) then you will be subject to a charge from our solicitors as he would have to be involved. Therefore, I would advise to wait until the Form 6 is drafted before you sell the property”

So I am confused as the first trust deed supervisor never mentioned any fees and it was put simply that my own solicitor involved in selling my home would request said removal of the inhibition?

My scenario is that I want to pay full amount from my lump sum pension and within four weeks put my home up for sale to downsize as I cannot afford to maintain mortgage payments, my mortgage balance is £16000.

Hi expired.

The removal of an inhibition should be a part of the process of issuing your Form 5.

You can make your own check on the inhibition's status using the Register of Inhibitions (easily found online).

I think you should seek written clarity from your trustee about why their solicitor would be involved, and charge you, if you have been formally discharged and there is no inhibition.

They are a bit contradictional as another advisor stated that once they receive all monies from myself the trustee will have no interest in my property or equity? So why the need for a solicitor?

To many chefs kill the broth.

Surely when all creditors in question receive all their debts in full with interest from the trustee there would be no counter claim from them, instead it would be an automatic acceptance.

Thanks for your response Amy.

Hi expired.

This will come as no comfort, but we've had similar experiences shared here in the forum before.

Some firms seem to draw the line at the issue of Form 5, other firms have even sometimes told people that any equity would go to them if the trustee was not discharged (Form 6).

I guess the solicitors involved in a sale would need to check in with a trustee that has not been discharged to clarify that they have no interest in the sale proceeds. They'd become aware of the trustee when the insolvency checks were done.

It seems some trustees may handle this themselves and no fee would apply. It seems your trustee would involve a solicitor in the process and that you'd be expected to cover the costs.

It's always really difficult to explain here that firms don't always go about things in the same way. It seems unfair. To be honest, it is unfair.

I've little extra to add I'm afraid. One of the other experts may be able to shed some further light and/or ideas on this when they next visit.