Welcome to the forum td46.

I think we need to split this up into two areas.

The trust deed: Your niece's ex-partner has taken out debts in her own name it seems. She's dealing with those debts by having entered into a trust deed. All of this is the sole responsibility of the ex from the perspective of the trustee handling the trust deed. The trustee cannot make your niece responsible for debts taken out in the name of another person. The only area where this could affect your niece is that they own property jointly and the ex may have to raise her share of the equity somehow (though your niece would keep her share if the property had to be sold to raise the equity).

The separation: A financial agreement may well have to be made in terms of a formal separation between your niece and her ex. This is a different process to the trust deed. I would assume that whoever is dealing with this will take into account the fact that the ex is in a trust deed which covers all of her debts and her share of the equity in the property. This is more of a legal advice question rather than falling within our area of knowledge though, so appropriate legal advice may be required in due course about the separation financial arrangements.

Hi thanks for the quick response. We’re ok about the Trustee etc. It’s the ex that’s saying she wants half her trust deed debt paid by my niece. I wasn’t sure if she can do this if she accrued the debt gambling, Thanks for the help. We’ll put the question to a legal adviser.

Hi td46.

The thing is, the ex suggesting that your niece pays half the debt in the trust deed seems utterly pointless.

The ex is still going to have to pay whatever she can afford into the trust deed until it's finished. Then the ex will be discharged and will not owe the debts any more.

In almost every scenario she gains nothing from what she's suggesting, so it's hard to see why any informed third party would consider this demand to be sensible or appropriate.

Hi, it's purely out of spite... she thinks she can get it paid off early if my niece stumps up half. Her trust deed amount is about £24000 & trustees amount £7000. Would my niece be liable for half the original amount £47000 or the trust deed amount £24000. Neither have savings. My niece had inheritance money when both her parents died young. She spent it on home improvements and a used car for work which she has proof of purchase. The ex's trying to get half the worth of the car too. Frustrating. Niece is at her wits end. I just thought a glimmer of hope that the ex's trust deed was gambling debts therefore we could fight her on this. Thanks very much for the help.

Hi again.

The trust deed amount isn't really £24,000. That's just an estimate of how much will be paid. If circumstances improve or worsen it could end up being more or less than this which is paid.

The ex is only going to finish the trust deed early if they've paid the total of £47,000, plus interest on the debts, plus the trustee's fees, into the trust deed. That's an awful lot of money, so an early finish seems pretty unlikely.

A financial settlement might take the debts into account I guess, but I cannot see how that will lead to your niece making payments into the trust deed. It's also not going to reduce the amount owed to the trust deed; the lenders and the trustee will still consider only the borrower to be responsible for repayment.

Obviously a difficult position and especially so if spite has come into it. If a financial agreement cannot be reached amicably, then any third party looking at this will I'm sure be influenced by the fact that one party ran up substantial debts through gambling. This is more an area for a divorce solicitor to advise on though.

Thanks again, no the ex just wants the debt to be put into the matrimonial pot and my niece to cough up half that amount (not directly to the trust deed) just to her.
Thanks a lot for your help.

I see.

The ex would have to hand over the money to their trustee in these circumstances, so unless there was a realistic chance of clearing the trust deed early (which will mean a lot more than £47,000 being paid in total) this still seems a pretty pointless exercise.

Definitely one for a solicitor though. I'd be very surprised if they didn't advise that the underlying cause of these significant debts wasn't a relevant factor in how this will eventually get sorted out.

Hi
Thank you so much for this. The info has helped loads in taking this forward. Will pass this on to my niece it will give her some reassurance that all is not lost..
Thanks again.

Glad we could be of help.

If you're happy to, it would be great if you could let us know how all of this works out. Similar questions have a habit of coming up on the forum and it would be great to have a forum thread to point people to in the future if a similar scenario arises.

It might also be useful to check back later once Kevin and/or Sarah have seen the thread. They work for firms that operate trust deeds, so might have seen a similar scenario arise in the past from the opposite perspective.

Thank you. I'll certainly keep you posted. All information gratefully received.

I am not a divorce lawyer either, td46, and am not sure how gambling debts are viewed in that context. I would certainly recommend your niece gets proper legal advice.

Thank all for the help.

Morning, it’s now 3 months on since last post. Things have progressed but need urgent advise please.
The house has been sold, which is great. The ex insisted it be sold by a certain company which my niece went along with for the sake of peace & quiet and speed.
Anyway, the end amount from the sale was to be kept by the conveyancing solicitor which is fine but the ex has only just informed the trust deed trustee of the house sale. I don’t think they’re happy ha I gotta not. Even told until now! They are now insisting the house monies be kept with their solicitor#128563;
We know they want the ex’s money and have no interest in my nieces half (according to the trust deed document itself), so can my niece have her portion left with the original solicitors?

Thanks in advance
td46

Your niece should be able to do whatever she wishes with her half of the proceeds, td46.

That's interesting that the sale happened without the trustee's say-so. It shouldn't be able to because an inhibition would normally be registered to stop that from happening. So presumably either the trustee didn't register the inhibition, or the conveyancing solicitor missed it. If it's the latter then they may have some explaining to do!