Welcome to the forum Cap.

We cannot tell you whether a trust deed can be re-opened with any degree of certainty at the current time. As you may have read on other forum threads here, this is a developing situation that may be settled by the courts in due course.

What we do know has recently been summarized here:

(Link Updated 2020: https://www.trust-deed.co.uk/rbs-and-ppi-claims-after-trust-deeds.html)

It is commonly the case that the proceeds of a PPI claim on a joint account is split between both account holders.

However, it is already the case that a bankruptcy can be "re-opened" (for the trustee at least) to collect in assets that could/should have previously gone to creditors. Obviously we have no way of knowing what will happen, but this outcome is certainly possible if the proceeds are split.

Hi Cap

If you check the post from Pascal12 below, his situation pretty much matches your post.

Sequestration is certainly easier (but not easy)for the trustee to be reappointed. The position with Trust Deeds is unclear at this time and I'm not aware of any cases which have been reopened in a Trust Deed.

I still maintain my argument that a Trustee has no legal authority/power to hold onto a cheque as he is dicharged and it therefore does not vest in him.

It will certainly be interesting to see how the action by the Trustee went.

Can I ask how much the cheque was for?

Mark

I've just read the whole post and everything is almost identical. I'm still at a loss on why the bank contacted the trustee as she had discharged herself so therefore the first contact should of been my parents . Yeah?

It's down to the trustee to locate all PPI and they already got £8000 PPI from when trust deed was open.

Does this mean that they can do this forever ... When does it actually end ?

Hi Cap.

Banks do insolvency checks just before they pay out for PPI claims. This is because they're at risk of having to pay the money out twice if they send it to the individual who then doesn't pass it on to their trustee (where this is required).

Therefore, if a bank suspects that a trustee might be in involved, they'll typically contact them first. They're taking a safety-first position to protect themselves from the risk of paying out more than once. Its then up to the trustee (or ex trustee) to tell the bank to pay them or to pay the individual.

I think it's appropriate to separate the past from the future here. If either of your parents were already discharged and inherited money, or won the lottery, they'd get to keep it.

PPI is different because it's an asset that existed when they became insolvent.

Your mother's potential for a PPI claim vested in her trustee - effectively it wasn't hers any longer. That's why the trustee is likely to be able to collect this money in even though your mother has been discharged.

Your father's potential for a PPI claim was promised by him to his creditors (via the trustee). That, in this instance, appears to be why the trustee is attempting to re-open the trust deed so that the creditors don't lose out.

Hi Cap

I have to agree with you. The bank should never have forwarded the check knowing the the Trustee was discharged, but they will pass the buck and put the responsibility onto the trustee who will be holding the cheque. Secondly, I can't see how the Trustee can accept a cheque when he has no authority. In legal terms there is no difference to your neighbour keeping hold of the check!

Like Pascal12, you should ask the Trustee under what authority they are holding the cheque, irrespective of any future action.

Mark

Hi Mark,

Out of curiosity, do you know under what authority a previous bankruptcy trustee might hold onto a payment like this when trying to get reappointed?

Hi TDA

Being the saddo that I am I spent a lot of time digging about to see any kind of case law or even something vaguely similar and cannot see any justifiable reason where a Trustee can hold onto a cheque if he has been discharged.

Of greater concern would be if a Trustee received a cheque while discharged and banked this.

We have cases where a PPI cheque has been received where we have been discharged and we immediately contact the person to advise that this has been received and request their confirmation ( in writing) that any fees from the PPI company can be deducted and the balance forwarded to them. The easiest thing would be to return this to the bank and let them deal with this, but knowing the system the cheque would vanish into the ether. Before you ask, no we do not charge any fees for organising payments, but it just gets things dealt with.

Mark

Hi just to confirm my trustee appears to have been successful in reopening my trust deed so unfortunately it looks like this will probably happen to others. Good luck to your parents, hope they are luckier than me.

Hi everyone. Thanks for replying . More info

We have contacted the bank and they have the cheque ready to go and is Made out to PKF (trustee) they said they have to send it to them by Scottish law even though we have both discharge letters . One discharging my parents and the other the trustee Mrs.joe blogs.

They have a problem because PKF no longer exist and have changed name to BDO ?

So what happens here ?

Hi Cap.

This answer is, I'm afraid, going to be no use to you at all.

Last night's Pascal12 post is the first that any of us have heard about a trustee actually being able to re-open a trust deed to capture PPI.

How subtleties such as the one you mention will work we simply don't know yet.

Hi Cap

Insolvency firms normally have indemnities or agreements with their banks to allow for cheques to be banked in the previous name.

As with everything, you should not accept the bank's comments and ask them to refer you to the exact piece of legislation which states that the cheque goes to the ex trustee. If they are unable to do this ( and they won't be) then ask them to point you to the regulations/legislation where they are unable to forward it to you.

Mark

Hi mark we just done this and the bank stated Scottish law act 2011 .

We have no idea what this means

Hi Cap

The Scottish Law Act 2011? It doesn't exist. I think this highlights my point exactly. Call centre waffle.

I know its a pain, but you need to speak with someone senior and avoid this call centre nonsense. You should ask for the exact legislation and the exact section within that legislation which clearly states that the bank have a legal obligation to forward cheques/funds to a discharged trustee. If possible ask them to email it to you.

Mark

Parents calling now . Be in touch asap