Hi 150389,

The underlying principle here is that a trust deed only writes-off the debt that you cannot afford to repay. So if something financial changes in a positive way, it's possible that you'll repay more than you'll initially expected to.

If it becomes affordable, the creditors can benefit from some interest being paid as well as receiving the full amount that they lent you (as would have been expected under the original credit agreements prior to entering a trust deed).

Also if it becomes affordable, the fees for the trust deed are borne by the client rather than the creditors. In technical terms, the fees are agreed by both the client and the creditors at the start of the process. They usually end up being at the expense of the creditors, but not when a client's financial situation changes to the extent that they can afford to cover them.

I am sympathetic that you will not benefit from this inheritance, but I'm afraid from the information you've presented here it doesn't sound like you're being treated unfairly.

Hi. A Trust Deed can be a very useful process to enable debts to be written off, but is rarely the right option if circumstances mean that there are sufficient funds to repay the debts in full and meet the costs of the process too as it can work out to be expensive unfortunately.
It might be worth trying to push back a bit regarding the Trustee's fees as they do have the discretion to reduce them. Given your bereavement it is possible they might be willing to be sympathetic to such a request.

150389

We have had a similar case recently and we wrote to creditors asking them to forgo their interest payment. I am pleased to say all creditors agreed and significantly saved 24% of debt level . If the trustee isn't willing to do that then I would suggest you take a proactive step and speak to your creditors directly.

Hope this helps.

p

Hi,

Can I jump in with my own experience of similar circumstances.. I too felt the fees charged was an extremely high level. Which discourages people who could find a way to pay in full.

Below is snippet of a mail I sent to my MSP;

Together, our total "admitted debt" is £28,332.24 (Mine is £10,172.51, my partners is £18,159.73)
We have, so far, paid £8408 roughly towards this trust deed.
To settle my trust deed is £13,954.88
To settle my partners trust deed is £24,153.32
This totals to £38,108.20... a full £9,776.96 OVER our admitted debt (not including already paid fees).

I would suggest you contact your MSP about this detailing this also.

When I done this they referred it to the Scottish Parliament Information Centre (SPICe) regarding the legislation and rules around ending payments early.

They did end up having a consultation in 2019 regarding trust deeds again, something that I'm not sure on the outcome of I'll be honest.

Since this, I've been finished my trust deed a year now (I didn't settle and just let the 4yrs finish).

Morning

I would not suggest going to your MSP as I do not believe that would resolve the issue.

I am on the working group set up in response to the points raised Gibbo8907 and our report is in the process of being signed off and sent to the minister for consideration. It is highly unlikely the changes if made will be applied retrospectively. The working group was made up with insolvency members, consumer advice groups and creditors and we all had to spend a considerable amount of time and effort with the members dispelling a lot of misunderstanding presented at the parliamentary committee.

My suggestion offers a practical compromise that 150389 may wish to discuss with their trustee to reduce the amount of interest applied. I would suggest this is reasonable.

150389 , you have the opportunity to seek a review of the fees by requesting an audit from the Accountant in Bankruptcy however from what you have disclosed, your Trustee has acted in accordance with the terms and conditions of the trust deed.

P

Hi Paul,

I only went to my MSP due to the high level on top of paying the full debt off, this was my own complaint. Something they agreed with.

Once signed off etc, would this be able to be readable?

I think 150389 main concern, and they can correct me if I'm wrong here (which was mine too at the time) was the high level of interest on top of what would be the full balance being paid is unfair. I think there should be some way to help encourage people to pay in full if they can (when signing a Trust Deed, this isn't usually something you can see coming at all until it's presented to you). I mean, 150389 was £9K on top, where as mine was close to £17K on top.. Surely that isn't right?

In the end, for me at least, the creditors lost out on quite a big chunk of money that I was going to be gifted to help end the trust deed earlier than planned.. Something I'd imaigne they wouldn't be too happy about if they were to ever find out.

I feel it is worth making the point that we are talking about different circumstances here. An offer of a settlement from a third party can be retracted, which is what happened in your case, gibbo8907. I'm afraid 153089 doesn't have this option as an inheritance is a windfall which must be paid in for the benefit of creditors.

I agree that for a third party offer then there may well be an incentive for creditors to write off interest to enable it to happen, however I'm afraid if creditors do insist on repayment of interest in full from 150389 then they have the right to get it. There is no element of merely seeking to "encourage" repayment in full here.