Hi Hellsbells

Unfortunately the Trustee may look on any payment as a Gratuitous alienation ie disposing of assets before a Trust Deed or sequestration. To family or associate he can look at any transfer in the previous 5 years and raise an action to recover this.

On the (slight!) plus side, the Trustee could issue a S.39 notice advising of his intention to sell and this would prevent the forced sale by the mortgage company. This is more relevant in sequestration, however appears to be accepted in Trust Deeds. This would allow for a greater return to creditors and therfore to the family member if they rank as a creditor.

Mark

Hello Mark, it was my husband that was talking to one of your people, just another question on this if we did rent it out again what would happen after both mine and his TD where finished? would there still be a claim to the equity in the property?

Hi hells

Yes, any equity agreed at the start would require to be paid. However this is limited to your husband's one half share at present.

Mark

The £23000 equity mentioned earlier- was that an estate agent figure or a survey done for mr hellsbells80 to go for his pTD ?

Hello RBSB, the equity of £23,000 is from the Estate Agents figure. The TD figure is £8000 of equity. So the question I now ask is if the house was to be rented out at the end of the TD how do people in this situation raise the funds to pay back the equity as credit ratings will be shot to nothing I would imagine? We as many others have lost alot of equity in our house due to the banks collapse, many in negative equity positions, due to the deposit we put in we still have a little left but makes me sick that all our savings are gone and debt is left. Bankers. W.

Hi hellsbells80.

Often it will be via an extension to the trust deed to pay over an equivalent sum.

Raising extra money with a new mortgage during a trust deed has been almost impossible for a number of years.

Some people are lucky enough to have partners, family or friends that will help out instead.

A tenant buyer would pay a deposit based on a % of the agreed purchase price which would benefit the trust deed and (dependent on trustee's view / acceptance) the amount remaining would be paid during an extension?

I'm not sure if you normally need to pay the assessed equity as an extension when a house is sold without achieving enough to pay the mortgage debt and costs, perhaps one of the experts could comment?

If a house is sold then the equity issue is resolved, so if there were no free proceeds from the sale the creditors will get less than expected.

Thanks for clarifying Kevin.