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Scottish Trust Deed Forum
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Topic starter
19/08/2010 10:14 am
Hi
I have received a letter fromt he trust deed who have valued my house at ?é?ú135,000 & are advising the equity is NIL , however a nominal sum is ?é?ú500. The IP has advised that should I not seek a third party to acquire the ?é?ú500 then they will hold the interest of my property & as such will be forced to revalue the interest by the end of the TD.
Is this the case?
I do have a third party who is interested & what I am wanting to know ideally is that if the third party pays the ?é?ú500 either in one lump or monthly, will my TD @ the end be it & no relase of equity on my property etc??
19/08/2010 10:24 am
Hi graeme7171,
This ?ú500 charge is normal and is levied by most Trust Deed companies where a homeowner has no equity at the start of the Trust Deed.
There are a couple of companies, including one of the featured companies on this site, that will carry out the same process without making any charge.
Provided everything is done properly the ?ú500 is precisely to ensure that your home is not later revalued when equity could have developed. Therefore if the ?ú500 is paid, and you make the required monthly contributions, that should be the end of it for you.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
Topic starter
19/08/2010 10:27 am
Hi TDA, thank you for your prompt reply.
Regards
Graeme7171
19/08/2010 2:27 pm
Hi graeme7171,
What trust deed assistant says is correct, though I hope she does not mind if I pick her up on one small point.
To call the ?ú500 payment a "charge" is a little misleading I feel. This payment is gathered in as an additional contribution for the benefit of your creditors, not as a fee for the trustee. At the end of the day it is your trustee's responsibility to gather in whatever funds are available, in order to share these amongst your creditors.
I guess the convention has come about so that trustees are offering at least something to creditors, albeit fairly nominal, in return for ignoring an asset which may well accrue value during the course of the trust deed. It is essentially a compromise in order to balance the interests of both sides.
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19/08/2010 3:21 pm
Hi Kevin,
Point taken! I should have made clear that the beneficiary of the charge will be the creditors.
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