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Responsibilities in extended Trust Deed

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(@sam14)
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Joined: 2 months ago
Posts: 3
Topic starter  

Hello, I'm new to forum and looking for advice please.

I have just completed my 48 mths PTD and keen to clarify my responsibilities and options in relation to a proposed retention linked to equity in my home. Quoted £4,368. My documents quote

" In year 4 of the PTD, the debtor will be required to apply for a remortgage and/or a second charge mortgage. If the debtor is successful with their application, then the funds received will be paid into the Trust Estate for the benefit of doubt. The extended contribution payment period is expected to be the lowest dividend outcome for creditors and will only be used if funds cannot be released by way of secured borrowing"

Q. Does this mean we have to apply for remortgage and if so can this mean higher equity available if value & balance changed after 3 years? 

My father recently passed and my mother is keen to split ownership of her home 50% her, 25% brother and 25% me, under a liferent agreement she remains in property. Not processed yet.

Q. In an extension period would I have to declare this,? My documents quote

"I have been advised that from the date of signing the TD, any assets, which are attained 'acquirrenda' (up to 4 years after the date the Trust Deed is signed) must be declared to my Trustee for the general benefit of creditors"

I interpret this that if my mother now pursue this I do not need to advice Trustee now?

Final question, if I do require extension period, do I still require to provide income and expenditure information and could I pay the agreed amount off sooner to close the TD?

Thank you for any advice 


   
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Kevin Mapstone
(@kevin-mapstone)
Member Admin
Joined: 15 years ago
Posts: 4237
 

Hi Sam14

My condolences for the loss of your father.  To answer each of your questions in turn:

1) Is the narrative you quote from the Form 1B?  That is the formal document which determines exactly what the agreement is regarding your equity.  It sounds like your trustee has proposed the Trust Deed in a similar way to how IVAs are normally dealt with, though the legislation is actually quite different.  The equity amount is fixed at the date of signing of the Trust Deed, based on a valuation done prior to signing.  They cannot expect you to pay in any more than that figure.

2) You are correct, the period is 4 years from the date of signing in respect of the requirement to declare any lump sums/windfalls etc

3) The payments being made for equity are fixed and agreed on the form 1b at the start of the Trust Deed, so if you can afford to pay more then you should be able to complete your payments earlier.

Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.


   
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(@sam14)
Active Member
Joined: 2 months ago
Posts: 3
Topic starter  

Thank you Kevin, that is really helpful. 

Is an income and expenditure review expected at end of the 4 years? Not heard usual email from provider.

Also, my mother has offered to provide the equity value to close trust deed now. Is that something I can do and what would be the expected process?

Keen to understand my options and expected actions prior to contacting the trustee thanks.


   
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Kevin Mapstone
(@kevin-mapstone)
Member Admin
Joined: 15 years ago
Posts: 4237
 

I think most trustees will do an income/expenditure review at the end of the 4 years, just to check that there hadn't been a change in circumstances in the last year that hadn't been reported to them.  Maybe your doesn't bother with that though.

Yes, your mother should be able to make that payment.  She might need to provide ID and proof of the source of the funds in order to comply with anti-money laundering checks but otherwise it should just be a case of checking the exact figure with your trustee and organising a bacs transfer.

Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.


   
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(@sam14)
Active Member
Joined: 2 months ago
Posts: 3
Topic starter  

Thanks Kevin, I will contact by trustee and hopefully we can arrange for the closure soon.

 


   
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