Hi Munki2013

Yes, any shortfall will become a claim in the trust deed.

I've dealt with dozens of trust deeds with this scenario.

Mark

My house was repossessed and the shortfall is now part of my TD.

It's called a contingent debt. Generally one which cannot be quantified at the time and depends on a future event.

In this case, any debt to the bank cannot be calculated at present and will only be able to be calculated when it is repossessed and the selling costs etc are deducted.

Mark

Thanks for your response Mark. That goes some way to making me feel a bit less apprehensive. I arrived home today to discover some more paperwork from the Solicitors employed by Lloyds TSB for me to sign. The first form is a Calling Up Notice while the second is a Borrower Declaration for a Voluntary Possession. The latter contains the following passage:

I hereby undertake to indemnify fully Lloyds TSB Bank PLC for any and all losses, liability and expenses incurred as a result of me.

If I sign this am I not essentially agreeing that I will pay back any arrears/shortfall that will result from me voluntarily surrendering my flat in full?

Hi Munki2013

No probs.

The form should be sent to your Trustee to deal with. He will normally dispense with the 8 week calling up period.

Irrespective of the statement on the form, you can't legally be liable for the debt. Best advice is hand this over over to the Trustee.

Mark

Thanks again. I let my trustee have a look at the forms. They didn't express any concerns but also didn't tell me that they would deal with them. I've dropped them another email asking for some clarification.

Absolutely the shortfall comes in to the trust deed. Any surrender forms should be read, signed and returned to commence the procedure. And shortfall once done and dusted will form the secured creditors unsecured claim in to he trust deed, falling in line with all the other creditors. The trustee may offer to sell the property for the lender, for an agreed fee, perhaps achieving a better price (that's the idea) than the secured creditor. But only if they agrees its beneficial.