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Scottish Trust Deed Forum
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Topic starter
15/04/2013 8:53 pm
Hi.
Wondering what the implications of the following would be in a PTD... If you have a property with negative equity and want to / need to move during your PTD, can you simply stop making the mortgage payments, hand the keys back to the mortgage provider and go get rented accom elsewhere?. Presumably the mortgage provider would auction the property and chase you for the balance? Does the balance become an unsecured debt and fall into the PTD?. If so, the return to all creditors would be reduced as a result...would this mean an extension to the term to recover the original pence in the pound calculation? What if the mortgage balance equated to over one third of the new total debt? Would the mortgage provider get a 5 week
window to object to the proposal...and if an objection was rasied would that throw the original PTD into jeopardy? Thanks.
xxx
15/04/2013 9:39 pm
Hi Thinkingofthefuture.
Your trustee might have concerns if the returns to other creditors were diminished as a result of this. I wouldn't take this course of action without understanding the likely ramifications from them first.
It might make a difference if the decision were seen to be essential rather than based upon a preference.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
15/04/2013 10:26 pm
Hi totf,
Any shortfall would certainly form part of the trust deed. The mortgage provider would not get a chance to object - the trust deed is already protected and they would have had to have objected when the trust deed was originally advertised in order to stop this happening.
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
16/04/2013 9:32 am
Any shortfall would be included, its called a contingent debt as it can't be quantified until there is a specific event ( repossession & sale)
You should speak with your trustee on the matter, however we have a number of identical cases where the shortfall has been included, the dividend reduced and the case closed as normal at the end.
There is a wee bit within the trust deed document on 'Termination of the Trust Deed' which normally allows the trustee to close even if the dividend is not what was agreed at the start.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
