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29/11/2011 12:36 am
Hello. Sorry if this has been answered, I'm just new here and have read through a lot of the comments but haven't seen my question anywhere (though seen a lot of helpful info.)
This morning I posted back my trust deed, a final confirmation doc of all the debts and the agreement to sign, I had a face to face meeting and initial signing of the paperwork two weeks ago.
I was just reading through it again and came across something that worried me.
under the grounds on which my trust deed is set it says "you must include within your trust deed all creditors to whom you owe money at the date of signing your trust deed. You must not, under any circumstances, make payment to your creditors, INCLUDING FAMILY MEMBERS,once you have entered into a trust deed agreement."
I am owe my dad a few hundred pounds on a casual agreement that he will get it back over next 12 months or so. I didn't mention this debt or my agreement to pay it back as I didn't think my dad counted as a creditor and I would just pay him back slowly when I could. I am now worried at this section on family members that I am not allowed to do this. I don't want to have to tell my dad I am entering a TD and I also want to be able to pay him back.
Should I let my IP know? I was going to call them in the morn for advice but don't know if it's a good idea.
Thanks.
29/11/2011 9:07 am
Welcome to the trust deed forum treefrog.
The technical answer is that anyone you owe money to should be included in your trust deed.
I suspect that in reality a lot of people leave small informal family debts out of their creditor lists.
The point is that all creditors should be treated equally as it would be unfair for one creditor to write off a portion of the debt (via the trust deed) while another is paid in full.
This can cause particular concerns in instances where a family member has taken out a loan on behalf of the person who is now entering a trust deed. Effectively the person that took out the loan is now a creditor of the person entering the trust deed. It wouldn't be possible to make an expenditure allowance for that person to continue being repaid in full while other lenders are not (as the allowance would discriminate against the other creditors).
Sorry that I haven't answered your question "head-on"; it's one for you to weigh up really and I hope this background information helps.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
Topic starter
29/11/2011 9:16 am
Hello. Thanks for the quick reply, that makes things clearer.
01/12/2011 10:27 am
Hi treefrog
Sorry not had the internet for a couple of days.
Interesting wee technical point on family debt. If you owe money to a spouse or civil partner, then they rank last in any dividend payout.
In effect, a Trustee would have to pay the debts in full, plus interest on debts and any remaining balance would be used as a dividend for a spouse or civil partner.
I'll get my coat!
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
01/12/2011 3:26 pm
Hope it's a warm one today!!
01/12/2011 3:27 pm
Mark, just before you go...
Do other family members rank higher?
For example parents or siblings?
Ta
01/12/2011 3:34 pm
Hi Pamjo
The coat thing was a wee joke for being a techie geek!
No, Family rank like any other creditors on an equal basis. There are no preferences nowadays. It used to be that PAYE and VAT were preferentail creditors, however that stopped a long time ago.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
05/12/2011 3:10 pm
Hi Mark
You'll need your coat again...
When you said spouse's owed money would be ranked last, I took that to mean after or with lower priority than all others?
My question was regarding other relatives' position, relative to a spouse. Is it only spouses who have to be last but other relatives are treated with the same priority as all other creditors?
05/12/2011 5:11 pm
Any family members would be treated equally.
But I suspect many people enter PTD's owing little amounts to parents etc that will be paid back throughout the PTD. As long as you arent trying to pay back thousands of pounds it shouldnt be an issue.
Paul
Trust deed completed Jan 2012,Trustee discharge Nov 2012.
A new dawn.
06/12/2011 12:24 pm
A spouse or civil partner would be ranked below any other creditors, but any other family member would be an ordinary creditor like the rest.
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
07/12/2011 10:24 am
Thanks for clearing that up.
