Hi Adama
I'm sorry for your loss.

Unfortunately when someone dies, their debt does not die with them. If your relative left an estate which would cover the full amount of the debts, plus interest, plus fees, then I'm only guessing that the trustee would be entitled to chase that full amount.

After I signed my trust deed I got a phonecall from an insurance, clearly my details were passed to them by the middle man company I signed up with. They were trying to sell me an insurance policy that I did not want as I already had insurance. They said that if I was to die during the course of my TD then all my debts would be paid in full from my existing policy before my family got a hold of any money. Their purpose was to have new policy set up in a trust so that my trustee couldn't touch it. I sent them away with a flee in their ear as I felt if I died it would only be right my debts were paid from my insurance.

The following answers are only me guessing at how it would work -

Most of the TD costs are in setting it up at the start, if they bring the TD to a conclusion, they would still charge the full fees.

If there is an estate, enough to cover the full debts, I think the statutory interest would be added in the same way as if a living person then had the means to pay everything off.

As far as picking away at the estate, most wills are worded in such a way that it states what is to be left to certain people once funeral costs and all other debts have been settled.

Maybe one of the experts will I say I am way off the mark, like I said, I don't know for sure.

Thanks for your reply - I have an appointment with my MSP next week and have written to ICAS - the AIB are useless and basically take no active role unless the creditors ask them .. all very one sided. I think you are quite right in your advice and it is a sad reflection of our society that banks and other individuals etc... that already charge us so much for credit are allowed to also continue to charge interest etc.. when we die. Instead of grand kids getting some cash (after the debts are paid) the greedy corrupt banks get even more due to interest and fees servicing a credit agreement that no longer exists or a loan that the debtor no longer benefits from due to death and the family get less - what a system. Perhaps civil action is an option as asking a sheriff to take a look may not be a bad idea.

Thanks again

Welcome to the forum Adama. I'm also sorry to hear of your loss.

Trust deeds are only intended to write-off the debts that an individual cannot afford to repay. This means that where an individual's circumstances improve somehow they can end up paying the full amount that they owed at the start of the trust deed, plus the interest and fees.

Obviously the background here is very different, but the same principle applies I'm afraid. If there's enough money in the estate it's to be expected that the creditors are paid in full, that they receive some interest on the debts (as they would have done if no trust deed had been signed) and that the trustee is paid for the work that your relative instructed them to do.

You may have an argument that the trust deed fees might be reduced a little given that the trust deed will not have to be supervised for the amount of time originally expected. It should be taken into account that a lot of the work does take place at the start of the arrangement though.

£450 per hour for someone to work on PPI claims seems very high. Is that definitely for the work of the claims company rather than a very senior person at the trustee's office?

As TDA says, the Trustee has an obligation to the individual in the Trust Deed, but also to the creditors. There's a few points in the post which hopefully I can clarify:

I'm not sure why the level of debt would increase from £45k to £60k, however I can only assume that creditors have submitted claims in the Trust Deed for the higher amount, irrespective of the current position.The Trustee has an obligation to examine and adjudicate on claims before these are accepted.

Where there are sufficient funds to pay creditors in full, then the Trustee has an obligation to add statutory interest at 8% per annum. Even allowing for this, it is unlikely to have the effect of increasing the debt from £45k to £60k.

The PPI is an issue which has come up a number of times, however the sums paid out can sometimes run to thousands of pounds which would assist in the repayment of the creditors and allow for a greater return to the estate once paid in full.

I'm not sure how the £450 per hour figure is arrived at as PPI firms work on a percentage basis and not on an hourly rate. My guess is that the Trustee has submitted the proposal to creditors and rather than base the fee on an hourly basis, has proposed the fee on a set fee basis, hence the £5k figure. This may explain the £450 per hour as he may have submitted a final account for the £5k fee and divided this by the actual hours worked which may arrive at the figure stated. I can certainly appreciate the concern at the figure, but can only try to guess how this has been arrived at.

Mark

Thanks for the advice - saw a lawyer today going to go after the Trustee for misrepresentation and attempt recovery of charges. AIB said they would audit Trustee if the sheriff requests it. ICAS were great really helpful. I Didn't realise that there are strict timescales Trustee has held onto estate money he has no right to for more than 28 days so I can actually report this as a crime to the police as it is unlawful to be in the possession of funds or assets beyond the period stipulated in the Protected Trust Deeds (Scotland) Regulations 2013 . Trustee is only entitled to fees plus debt and must return to the estate within 28 days ... will keep you posted. Thanks again

Hi Adama.

I hope that this is all resolved quickly and in a way that's fair to all of the parties involved.

Please let us know how you get on.

Hi adama

The section you refer to relates, I assume, to the period following the final distribution to creditors. For this to be effective, the trustee would have required to be appointed after 28 November 2013, carry out the statutory obligations including the ROI notice and then wait 5 weeks for the protected period, deal with the estate, receive and agree all claims, calculate the claims plus interest, make payment of a dividend to creditors and for all payments to be cashed and after the final payment has been cashed he would then have 28 days to seek his discharge.

It is always difficult to comment on specific cases, without full details, however the time period for carrying out the above is, irrespective of the Festive period in between, extremely tight if not impossible as you would need to be sure that the final distribution had been made and creditors had cashed the cheques.

Mark