Hi LornaPTD

The normal course is to pay creditors in full plus interest at 8% and the costs and outlays of the Trustee.

Mark

Hi Mark

Thanks for your response. Is there any room for negotiation with the Trustee/Creditors in this case? Part of the loss is for the loss of lump sum and future pension?

How would the interest part work on a debt that was not due to be paid in full for another 27 years under the normal terms of the loan when they would now be getting payment earlier.

Kind regards
Lorna

I doubt there would be any room for negotiation in your case, LornaPTD, as you have an obligation to hand over any windfall such as this and your creditors would have to be paid in full, plus costs and interest. However, your husband's creditors have no claim on any of these funds and should be treated separately.

It may be that he could be "bought out" of his trust deed early too based on an offer of a lump sum from you, and the sum required to do so could be open to negotiation.

In terms of the interest on your debts, a calculation is performed by your trustee as to how much interest would have been due from the start of the trust deed up until the point where you are discharged. You do not have to pay the full interest that would have been payable over the full term of the loan.

Thanks Kevin

How would this work, when a large chunk of the debt was joint?

Would I have to hand over the whole amount and then wait to see what I get back. Or do I hold onto the funds until negotiations (if any) are agreed?

Lorna

I wonder if you have had separate amounts in relation to your accident. Did you have a court case highlighting injury or incapacity to work as a result of injuries? Normally there is a part of any such payment dedicated to 'solatium' which accounts for pain and suffering at the time, lost potential, emotional effects, family costs etc.
Then there is a compensation element which can include additional ongoing costs relative to specific disability/limitation. In regard to the second part, actual costs are normally quantified within this to include projected loss of earnings/earning capacity. If this is to replace future earnings which you will not now have the ability to generate due to the result/impact of your injuries, I would hope it would not all be seen as windfall?

Thanks Pamjo.

Jeez, this is now confusing me a lot! I was deemed unfit to work and was medically discharged. The loss is for future earnings/pension that I can no longer generate as I am unfit to work. I receive an ill health pension and injury pension at present, both of which are used fully as income in my PTD. I received a small amount for my injury as an interim payment, prior to entering the Trust Deed. Does this change anything at all?

I don't think it would make any difference whether the pay-out was for loss of future earnings or not, I'm afraid this would still have to be made available for your creditors, LornaPTD.

The joint debts would have to be paid in full, as you are solely liable for the full amount as well as your husband. So it would really only be the debts that are solely in your husband's name that would not necessarily have to be cleared by the pay-out.

I don't wish to confuse things further, but you should also know that once you have cleared the joint debts in full then you have a right of relief against your husband's trust deed. In other words you can make a claim and stand in the place of that creditor to receive some of the dividend that would have gone to them from your husband's trust deed had they not already been paid off in full.

Hope this is making some sense! Is a bit of a complicated area.

Hi Kevin

Thanks for all this info. I'll refer back to it once the Trustee comes back to me with his side of things. I'll come back on and see whether you think their decision is correct.

Thanks again!

Sorry Lorna-a little knowledge being a dangerous thing perhaps. I worked for a number of years in preparing court reports relating to projected costs for care/support in relation to claims for costs. Part of these reports included the calculations of projected earnings and associated lost potential. In these circumstances, when we then set up care packages with LA or private providers, certain amounts were ring fenced and not to be taken as available for funding care. I assumed prepayment of future earnings might be seen in this way. (Don't ever Assume-it makes an ASS out of U and ME !)

On the bright side, it is a good outcome generally to be able to bring things to an end financially from which you can hopefully move on in confidence?