Hi Domino

Your discharge will happen once the equity has been paid in full, so it would be after the final payment at year 5.

Mark

Thanks Mark.
Could a third party pay this equity amount after the 3 years enabling me to be discharged?

Thanks.

Hi Domino

Yes, that would not be a problem and would certainly allow for an earlier discharge.

Mark

Hi
I have just completed my 2nd year review. My payments have increased substantially due to new job with higher salary. I have an equity value amount stated clearly in my TD document. This value to be paid over 2 years after the inital 3 year term. The extra 2 years were calculated using my initial lower payment amount.
During my review I asked whether this term would be reduced due to the higher payment now being paid. I was quite suprised to be told that, no the payments would continue at the new higher amount for the extra 2 years. Surely this would mean paying over a much higher equity amount agreed at the outset?
I'm not so concerned yet as I have 1 more year to go but interested in your vuews whether this is correct.
Thanks,

Domino99

Hi Domino99.

Assuming the equity amount is fixed, I'd assume you'd pay the new higher amount for a period of less than two years (to pay over the sum of equity).

I would certainly back up Trust Deed Assistant's answer, Domino99. The first 3 years are fixed (or 4 years for more recent Trust Deeds) and then it should just be a case of paying off the equity sum.

Hi Domino99,

I'll back up TDA and Kevin's answer as well. The equity amount should have been fixed at the start of the Trust Deed and this is the sum you would pay over once you have completed your payments for 36 months. If you are then able to increase your payment from your income to pay the equity quicker then this should reduce the timescale.

I think it's probably time to seek clarification regarding this from your Trustee in writing.

Let us know how you get on.

Hi there I was reading this post, what does that mean about paying equity at the end of the trust deed, I thought some interest got written off

It's for someone that owned equity in an asset at the start of the trust deed poprey.

So, if the equity is in a house, someone might make extra payments at the end of the trust deed rather than having to sell the asset (house) to raise the cash.

Hi Domino99

To add my tuppence worth, I suspect you have been given the wrong informmation by your Trustee's firm. The Trustee has agreed a figure and once all contributions have been made, then the equity needs to be dealt with. This will be dealt with by ongoing payments until that figure is reached even if this is less than the previously anticipated 2 years.

Mark

Thank you for your responses. Mark, this was my understanding also that the time would be reduced if higher payments were made over that differed from the outset.
After being made redundant from my previous job and looking for work for a number of months I was extremely fortunate to get a much better paid position, hence my payments have now tripled!

Hi
If you agree the equity at the start and over the course of 4 years of payments the equity falls substantially . Should a new equity be established to take into account the change in circumstances ?
Does the AiB suggest changes in circumstances like equity values that are outwith the persons control should be considered, would this be such a change ?

Hi goneunder,

The equity should be agreed upon at the start and this is the amount which should be paid over regardless of any change in equity providing that the client cooperates and maintains their part of the agreement.

Another way to look at it is the valuation of a property could increase over the 4 year term and the Trustee could then decide to ask for more of the equity. Someone could enter a Trust Deed with £5,000 of equity and by the end this could have increased to £10,000 or even £15,000.

It should be the amount that in theory the Trustee and creditors would receive if the property were to be sold at the start of the Trust Deed.

In old Trust Deeds there was no formal agreed that was made. In Trust Deeds signed after November 2013, there is a statutory form (Form 1B ÔÇô Agreement in respect of heritable property) which documents the equity at the outset and this is what it remains at. This is signed by the individual and Trustee.