Welcome to the forum Gregsta3.

It sounds as though the PPI funds have been paid to the trustee that acted for your parents in the past. This is commonplace - it's then up to the trustee whether to forward the money to their former clients, to return it to the firm that sent the money, or to seek reappointment so that the funds can be used to repay the creditors (who presumably were not fully repaid as part of the old trust deeds).

Only a court can allow the trustee to be reappointed. Your parents, or their representatives, are able to make their case if this goes to court.

I have a lot of sympathy with the argument you make, Gregsta3 - if such large amounts of missold PPI were partly to blame for the difficulties that your parents got into in the first place then it must stick in the craw that the funds may well end up going back to those creditors anyway.

I think we are likely to see get clarity on the legalities of this issue before too long, but in the meantime I don't think trustees have much choice other than to seek to gather these funds in if it is possible and economic to do so. They have a legal obligation to act in the best interests of creditors after all.

Thanks both.

I've had a read through the link you sent me and I noticed that late last year, a Trust Deed was reopened, which is frustrating given that we have correspondence confirming that it was extinguished and complete. They made all their payments towards the Trust Deed.

The point of a Trust Deed (as far as I'm aware) is to allow people the opportunity to get their finances back in order and provide some assistance. Whether it be a single monthly payment, a deduction to the overall debt or whatever. In doing so, people have to take the negative with the positive, i.e. the impact that will have on their credit, future risk status etc. So, people are getting involved and paying off the trust deed in full - job done, apparently.

But it's not really helpful to anyone if it comes back to bite you in the ass if you're fortunate enough to get some money back later in life. The other thing is, people have a misconception about what this money is... Missold PPI refunds are not EXTRA funds and people look at it like a mini win. It isn't. People PAID this money out of their own pocket over a substantial period of time - when you calculate how many people paid for PPI and the unthinkable amount of interest accrued on this amount - what happened to the interest? Banks line their pockets?

None the less, the trust deed was completed as agreed and finally extinguished.

Main question is this, the Trustee is trying to get the Trust Deed reopened, which I find out of taste alone, however, the amount being paid is more than any excess amount left on any old debts. With that in mind, whether they take some of the funds to pay off other debts, they are withholding an aggregate amount that will eventually come to my parents.

Surely something can be done about that!? Who's making these rules?

I feel dumber for having looked into this in more depth today.

Your arguments are all valid Gregsta3. Many people will agree with them.

There are however also compelling arguments why an asset such as this should be used to repay debts that were owed - for example that it wasn't the creditors fault that this existing asset wasn't realised to help repay them during the trust deed.

I guess that's where the courts come into it - making a judgment based upon the merits of both views.

The most that your parents will have to pay in total will be the total of:
1 - Their debts.
2 - Possibly some interest on the debts.
3 - The fees and costs of the trustee.

If there's a surplus left over after this, the funds should go to your parents.

Hi Gregsta3,

I can understand your frustration and I can sympathise with everyone that this is happening to as a result of the whole PPI fiasco.

As Kevin has advised it's the responsibility of the Trustee to try and ingather as much funds as possible for the creditors which includes PPI redress funds.

As far as I'm aware, a small number of cases have been brought before a sheriff in Scotland regarding a Trustee being reappointed in a Trust Deed and to date the Trustee has been successful in being reappointed but this has been down to the lack of a challenge from the individuals side as to why this shouldn't happen. I've been advised that there needs to be a suitable case where both sides are represented by solicitors who can then argue before a sheriff on the merits of being reappointed against not being reappointed. From what I understand this should happen soon which will then set a precedent for future cases.

I think most people within our sector are waiting for a sheriff to set out their decision and until this happens we are limited to what we can really give advice on.

Hi Guys,

Appreciate your feedback.

I have no issue with the fact that there were debts to be paid and this money can be utilised to cover that. Having said that, why do trustees write to clients to extinguish debt, if that isn't the case? If the debt continues to remain open, then Trust Deeds should stipulate at the outset that they'll take over the correspondence to relieve the debtor (which is in effect what a Trustee is supposed to do) but they should stop making promises about debts being extinguished after 3 years, which is apparently not the case.

We talk about missold PPI - I feel like my parents have had the wool pooled over their eyes again in relation to this Trust Deed because I can assure you, they're clueless as to what's going on right now. The trustee is downright awful and I get nothing but an answering machine and no callbacks. Glasgow based and the level of service is shocking.

Anyway, point is this - I don't have an issue with the PPI funds being used towards any aggregate debt. I do have a problem with the fact that on top of the funds required to cover aggregate debt, they're holding onto them too. The cheque was issued 6 months ago. I bet my parents can't claim the loss of interest when they eventually get the excess will they?

If there is any scope to challenge this, in or out of court, I'll do it. If that Trustee is as incompetent in court as they are day to day, it'll be an interesting process.

I hear what you guys are saying and understand most of it, but there are shockingly big gaps with no definitive answers. We're supposed to be a smart infrastructure of people in Scotland and yet this **** keeps rolling on.

Frustrating to say the least. It would be easier to tell the Trustee to keep the money and extinguish any relationship my parents have with them. I've only tried to speak to them yesterday and today and already I want nothing to do with them.

Hi Gregsta3,

For the Trustee to be able to handle the funds and distribute these to the creditors they will need to be reappointed by the court to have legal authority to deal with the funds. To do that they will appoint a solicitor with a specialism dealing with Insolvency related legal matters. A court hearing date will be set which your parents should be notified about. It's then up to them to take appropriate legal advice from a solicitor with experience dealing with Insolvency related matters who could represent them at court. Your parents are also free to represent themselves but with something technical like this it may be best to use a specialist solicitor.

In the meantime and until this happens I can understand why the Trustee is holding onto the funds as the risk for the Trustee is if they give these funds to the individual they could then spend the funds and it leaves the Trustee in a difficult position. There is an argument in whether the Trustee has authority to do so but I believe they have a sound argument for holding the funds pending the outcome of the court case.

It's hard for us to give a definitive answer as we await the outcome of court cases regarding this. A sheriff giving a legal decision will be the basis for many companies to decide how best to proceed.

It's the development of PPI and the size and scale of the issue that has caused problems for people currently subject to Trust Deed's and it now appears for people who believed they had successfully completed their Trust Deed's and put it fully behind them having been discharged.