Hi Imcville

There's 2 sides I suppose. Firstly if there was an agreement re the car at the outset.

If this is not the case, then the £1000 rule applies. It is even more strange that they have asked for 50% and wonder where this figure/rule/idea came from. The guidance is quite clear.

It would be interesting to hear exactly how and under what guidance your trustee has come up with this figure.

Please keep us posted.

Mark

Hi Mark - thanks for responding so quickly.

There was no formal agreement re the car at the outset of my Trust Deed. However, the person I was dealing with at the time indicated to me (verbally) that given the age, mileage and condition of the car (every panel has a ding or a dent!), it was unlikely to be an issue by the time my Trust Deed came to an end. Unfortunately that person no longer works for my trustee, so it's someone else who is now reviewing the case.

Regarding the £1000 rule - as mentioned this has certainly been my understanding all along, so it gives me a degree of comfort that this is also your interpretation. Since uploading my original post however I looked back through the forum, and noted the following thread :-

http://www.trust-deed.co.uk/forum/topic.asp?TOPIC_ID=1062&SearchTerms=anniefun

On this thread, Kevin Mapstone advises that "The whole £3k/£1k question is merely guidance from the accountant in bankruptcy....If you were going by the letter of the law then the trustee can seek to ingather the full value of any car that is owned by you I'm afraid."

I've also dug out the various documents I signed back in June 2008, one of which is a "Statement of Undertakings" form. This states that "I understand that sequestration usually lasts for three years after which an automatic discharge may be granted. I further understand that my trustee may apply for an extension of the three years should he have any reason to do so. I understand that any assets which existed at the date of sequestration or which were acquired by me in the period of my sequestration continue to vest in my trustee notwithstanding my discharge from sequestration".

This seems to confuse the matter further, especially as it refers on numerous occasions to sequestration, rather than a trust deed. I really wish I had the level of knowledge that I do now, back then - if I had, then I certainly would have queried this.

Further update to follow tomorrow, once I've spoken with my trustee.

Okay - I've just discussed this matter with my trustee.

The person I spoke to was also unsure as to where the valuation had come from, and advised that he would need to speak to the person who reviewed my case to fully establish what's happening. Unfortunately that person isn't back in the office until next week so I'll need to wait until then.

What he also said however is that the £1000 rule applies to the value of the car at the start of the Trust Deed, rather than at the end. I'm not sure whether or not that's correct so I didn't challenge it.

Having thought about it further however, if indeed the £1000 rule is based on the car's value at the outset, and if indeed they can legally seek to recover anything up to the full value, then surely a more sensible course of action would have been to value my car in June 2008, and then spread the required payment across the 36 monthly contributions? Certainly, that would have been an easier and less painful way to recover the required value!

Hi again imcville.

Are you minded just to accept this now and move on, or do you intend to challenge it?

I can see what you're saying about spreading the payments. I suppose the funds would have had to come from a third party though, but I'm sure for some people this would be easily enough organised given the modest monthly payment that it would have been.

Hi TDA.

To be honest, no - I'm not happy to accept this. We're not talking about a huge amount of money here but I do have a wedding coming up and I was hoping I'd now be able to put the cash previously ring-fenced for my Trust Deed towards that. The point about spreading the payments was more of a theoretical one (just me thinking out loud!).

The person who set up my Trust Deed back in June 2008 indicated to me that based on what I had told him about the age, mileage and overall condition of the car, it was very unlikely that any value could be sought from it. They are now asking me for 50% of a sub-£1000 valuation (which, incidentally I disagree with). In addition, they have never mentioned that the car was being considered an asset at any point during the last 3 years.

On top of that, the amount they are asking for only represents about 1% of the total contributions I've made so far. When this is spread across all of my creditors (of which there are several) and trustee's fees deducted, I really cannot see how it's going to make any sort of material difference to the dividend that ultimately gets paid out.

I'm also still very interested to clarify the correct application of the £1000 rule, which appears to have been wholly discarded in my case.

Hopefully one of the experts will be able to shed light on the matter, and confirm where I stand, and what my rights are.

It certainly should have been made clear at the outset, imcville. The guidance form the accountant in bankruptcy is that if a car is worth less than £3k at the start of the procedure (previously £1000) then the car should be ignored. So technically I think the person you spoke to is not wrong when they say that the rule doesn't apply at the end.

I imagine practice varies across different firms and is one of those where it should be clarified at the point of signing up.

Thanks Kevin - that's pretty much the case I'm going to present.

It was never made clear at the outset of the Trust Deed that any value would be sought from my car, and indeed the impression I was given actually suggested the opposite. No formal valuation of the vehicle was ever taken, and I heard nothing further on the matter for the next 3 years. Out of the blue, they are now asking for 50% of a valuation I disagree with, and they are referring to my vehicle as "new", which clearly it isn't.

In addition - while the amount of money being sought is significant in terms of my own finances, in the context of what has been contributed towards the Trust Deed so far, it is tiny. When divided up and fees deducted etc, this additional contribution is not going to make any meaningful increase to the dividend that my creditors ultimately receive.

For those reasons, I feel that the interest in my vehicle should be dropped, and that they should just discharge me from the Trust Deed.

I'm going to put all of this into a letter and send it to my trustee. Hopefully they will take on board what I'm saying, and bring the matter to a satisfactory conclusion for all concerned.

Excellent news - I received a letter from my Trustee this morning, confirming that based on the information I had provided, they are now discharging their interest in the vehicle.

A fantastic result! Thanks to all above for their advice on this matter.

Good for you imcville, an excellent return on your efforts to get to the bottom of this. It's good to see that Mark and Kevin were able to help you construct an effective argument.

Good news for your wedding fund as well I'd imagine?

Absolutely TDA - suffice it to say that my bride to be is even happier than I am! 🙂

Hi there,

I am in a trust deed which is due to finish.

I was advised my trustee would use the £1000 rule at end of deed for my car. What happens if my car was valued at say £1500?

Also, is mileage condition etc taken into account?

Thanks

Hi 4654ae16.

We've heard of some examples here where the trust deed provider has asked for the amount over and above £1000, and others where they have asked for the full value of the vehicle.

One of the experts will correct me if I'm wrong, but I'm not sure whether there is firm guidance on this.

Mileage and condition should certainly be taken into account as it is the true value of the vehicle which should be being considered.

Hi there,

It was agreed before signing that it would be only the amount over £1000.

Would my TD continue until this difference was paid? If it was paid in a lump sum would this close my TD?

Thanks

You're correct 4654ae16.

Your Trustee will want the money, either by lump sum or via installments, and will then be in a position to complete everything.