Welcome to the forum super3987.

When you say ended, have you confirmed that your friend's formal discharge was recorded on the Register of Insolvencies? This can be checked online.

An insurer might well run an insolvency check when they're about to pay out to someone. This is common within the financial services industry, not least because the firm paying might be on the hook to pay out again if the funds were lost after to paying to someone who was insolvent at that time.

Where an insurer detects an insolvency, even if it's recently discharged, they might send the funds to the trustee initially. The trustee will assess whether they have a claim on the funds for the benefit of the creditors. If they do they might retain the funds. If they do not they may forward the funds to the person concerned directly or they may confirm to the insurer that they have no interest in the funds so the insurer can pay the individual directly.

There's also a scenario where an insurance policy has a cash-in value and it therefore becomes an asset that the trustee will seek to realise to help repay more to the creditors. Was this an asset that was identified at any point during the trust deed by the trustee? It sounds as though it perhaps should have been, even if it wasn't.

There's lot of things that could be going on here; it's not necessarily straightforward.

Hi,

I checked on the register and it was updated on the 7th of June to confirm the discharge, the letter she got was in May to say she has been discharged.

I guess yes it was an asset, which was mentioned to the trust deed company at the time, however, they didn't go into details on anything further about it. Which she assumed was fair enoguh since nothing was expected to be paid out while in the trust deed, due to the term set by the insurance company, 15 years, and this was 3 years ago with the trust deed lasting around that time

Hope that makes sense? and thanks for the reply.

The insurance company have said they sent a letter, which she phoned them back and turns out they sent to the previous address and not the updated one they were given! Doh

So I guess the next step is to call the trust deed provider and ask what their intentions are.

If they intend to retain the funds to help repay the debts then it would be entirely fair to ask them upon what basis they're doing this.

Thanks so much for your help! 🙂