Notifications
Clear all
Scottish Trust Deed Forum
11
Posts
5
Users
0
Reactions
2,545
Views
Topic starter
15/09/2011 11:18 am
We have recieved a letter back from my husbands trustee regarding selling the house which is in negative equity. To give some background I was supposed to be paying equity in a car which there is £5038 still left to pay, I had to cease payments as I had to give up work with e heart problem and the trustee recently wrote to my husband to ask if anyone else will be taking over the payments. He told them there is nobody else and they said they would either need to sell the car or increase the trust deed by 2yrs, my husband asked them to increase it by 2yrs as the car we have now isn't the same one we had at the start of the td 2yrs ago as we had 2 more children and needed to get a bigger car. There wasn't any money made from the sale but the car is only valued at £3000 (if that) now so they wouldn't make enough out of the sale anyway. My husband informed the person who deals with the day to day work on his td at the time so she knows about it. Anyway the following letter was sent by his trustee:
"I note that you have enquired with your mortgage company, Nram, about selling your home. I can advise that as there is a shortfall due to Nram, I would not be agreeable to you selling your home until you are discharged from your trust deed.
As your trust deed will already have to be extended to collect your contribution payments and the equity amount from your vehicle, I am not agreeable to you incurring further debt which you cannot afford to repay.
It is in your best interest to continue with your trust deed until you are discharged. When your trust deed has come to a conclusion, you will be in a posiiton to sell your property and repay the shortfall to Nram.
I note from your letter that you are not able to provide details of a third party who is available to reccomence the payments towards your equity in your vehicle. I can advise that the only option may be to sell your vehicle and refund you a suitable amount from the sale proceeds to purchase another vehicle as the extension of the trust deed by 2 years to collect the sum of £5038 will result in a smaller dividend being paid to your creditors.
If you have any further questions please call the office."
I guess that's it then, we can't sell the house. There are a couple things I am confused about though, it seems like one minute in the letter it says the trust deed will be extended and then the next ciuple of paragraphs down it says it can't be extended as it would make the dividend lower? I'm confused as to why the dividend would be lower by collecting the full amount? I'm also confused as it doesn't mention anything about if we did well the money would go in to the trust deed or anything, it basically just says we wouldn't be able to pay it back and that we should wait until the trust deed ends and then sell up and arrange to repay the shortfall with Nram. I'm really upset about it all as they haven't taken in to consideration at all why we want to move. I feel like we are now completely stuck as it sounds like they have decided no and that's it.
15/09/2011 11:38 am
I would maybe guess that dividend would be lower as your Trustees Fees would increase as the Trust Deed was over a longer period therefore your creditors would receive less.......
Only a guess, hopefully the experts will explain.....
15/09/2011 11:43 am
Hi gillianr2.
I'm sorry to hear that the Trustee isn't happy to allow you to sell the home at a loss. I think he/she is being mindful of the interests of the creditors that agreed to the trust deed, as the return that they originally agreed to when the trust deed became protected would likely be much diluted by the addition of a further shortfall debt.
I'm not sure that means they haven't considered why you want to move, but it does seem that on balance along with the other factors involved that they have concluded that they don't wish for this to happen.
My guess on the point regarding the vehicle is that they are concerned that running the trust deed for an extra two years would be contrary to the interests of the creditors due to the extra fees they would need to charge for their extended involvement. I think you need to confirm with them what their position on your current vehicle is. There's a suggestion there that they may wish to see it sold and then return some money to you to buy a cheaper vehicle.
You still have the option of ceasing to pay the mortgage and handing the keys back to the lender. As you can see from the letter however it seems likely that the Trustee will not react positively to that so you'll need to weigh the potential consequences against and benefits you perceive would be derived from moving away.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
Topic starter
15/09/2011 11:59 am
It would be a huge problem if they wanted to sell the car as it is only worth around £2500 (just did an online valuation)so they wouldn't get much left by the time they gave us back something to buy another car as we have 4 young children requiring carseats so need a big car and they just don't come cheaper than we have already, or at least not safely anyway. I feel really stuck now, stuck in this house and now really worried about losing the car too. I wish he could just go bakrupt but the trustee has already said they wont do that.
Topic starter
15/09/2011 12:00 pm
The trustee is already taking £6600!
15/09/2011 12:07 pm
Hopefully they will not be minded to do that gillianr2. You may wish to ensure that they are aware of the value of your current vehicle so that they can factor that into any decisions.
In terms of the fees, they were agreed by your husband and the creditors at the start of the trust deed on the basis that it would run for the expected period without any extension. I do recognise that this sort of sum does seem very significant though.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds
15/09/2011 10:45 pm
Maybe it is worth considering surrendering the property to NRAM, as trust deed assistant suggested. Your husband cannot be held liable for any shortfall once it is sold - either before or after his discharge from the trust deed.
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
Topic starter
21/09/2011 2:17 pm
Thanks for the replies. My husband called the clerk who deals with his trust deed and he said what would happen if we handed back thekeys and she basically just said don't do it. She said the trustee would not be happy at all and my husband would end up in alot of trouble and it's not a road you want to go down. So basically my husband is now too scared to give up the house.
21/09/2011 8:57 pm
Hi gillianr2.
You obviously have a lot to weigh up.
If you have any more questions at any point please let us know.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds
22/09/2011 7:37 pm
Hi Kevin
Wondered if you could explain your comment re. not being held responsible for a shortfall? I may have completely misunderstood but I thought the reason most of us want to avoid repossession is precisely that we don't want to have a lender pursue us endlessly for a shortfall due to having to sell at this point in time with widespread dropped values resulting in negative equity.
If keys are handed back is the shortfall unknown until the lender sells?
Is the lender likely to get more and incur less cost if the current borrower finds a buyer at current value and therefore avoid legal and marketing costs?
22/09/2011 8:51 pm
Hi Pamjo.
Gillianr2's husband is already in a trust deed. As that is the case, if the property is surrendered, any shortfall would become another unsecured creditor in his trust deed.
The issue in this case is that the Trustee doesn't want the property to be sold, and there is also a question about whether NRAM would be willing to allow a sale where a shortfall debt would be created (as it would fall into the trust deed).
Voluntary surrender would overcome the objection of the Trustee and any unwillingness of the lender. There could be consequences in terms of the trust deed though given the stated position of the Trustee.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds
