Morning IHume

When you enter a trust deed, the fees comprise of a fixed fee element as well as a % of realisation fee. When additional assets are ingathered, the trustee is entitled to take that % fee based on what is realised.

It is a grey area where substantial funds are received that exceed the level of debt. Generally the majority of Insolvency Practitioners will limit their fee based on what is called a full cost recovery statement. This is simply the total sums required to close off the case.

In accordance with the legislation, the trustee fees and outlays must be settled first then payment to creditors. Creditors are entitled to statutory interest at 8% per annum charged at a daily rate. There is a debate whether this interest element is set too high, and it does appear in some cases to be unfair and it is not uncommon for the interest element to be returned by the creditor to the trustee. If this does happen, the trustee will remit this back to the individual if the total costs have been met.

Generally there isn't room for negotiation for early settlement as the fees and outlays are agreed by the individual and their creditors at the initial stage. Any inheritance acquired during the 4 year period of the trust deed is automatically conveyed to the trustee in accordance with the deed. For this reason, it takes away your negotiation hand. It would be more cost effective for the trustee to settle the debt quickly as it stops the daily rate of interest being applied.

At any time of the process, you can ask the Accountant in Bankruptcy to audit the fees and the outlays of the trustee. Based on your post , it appears this has been a reasonable course of action taken by the Trustee .

Hi Paul,

Thank you for your response its much appreciated.

I will be speaking to my Trustee hopefully in the next few days to discuss all of the fees and gain a good understanding of how they are calculated.

many thanks,
Isaac