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Topic starter
15/03/2011 3:37 pm
This subject has been discussed at length on here previously, but I just wanted to throw something out there to gauge opinion.
For my own Trust Deed, it is anticipated that a dividend of 26p in the pound will be paid to my creditors. Using the original amount of debt therefore, I can calculate approximately how much money will be divided up and paid out at the conclusion of the Trust Deed(ie - roughly 26% of the original debt).
Now here's the thing - when I add up all of my monthly payments, as well as all the ad-hoc payments I've made (from annual bonuses), what I will have actually paid into the Trust deed by the time it's finished is more than double the amount that will be paid out to creditors. The residual amount therefore, I assume will be retained by the trustee.
From past discussions, I appreciate that this is all perfectly legal and above board, but does anyone else find it incredible that an IP can actually walk away from a Trust Deed with more money than all of the creditors put together?
I would also be interested to know whether my situation is pretty much the norm, or whether this is a more extreme case?
15/03/2011 3:50 pm
Hi imcville
There are a number of issues here.
The first and most important, is that the information provided by you to the Trustee at the start would have shown insolvency ie your total payments were less than the debts. If this position changed, then the IP cannot be held responsible for a change in circumstances which benefits the creditors.
The 2nd is that the Trustees fees should not alter significantly with your change in circumstances, therefore I don't see the Trustee walking away with the balance of funds. The Trustee has a duty to pay creditors, plus 8% interest on the debts and then the fees and costs of the Trust Deed if there is enough to pay everyone in full. If there is a balance remaining, this would be returned to you. If however, you mean that the Trust Deed will still pay 26p in the £, but the total paid into the Trust Deed will be split 50% on fees and 50% to creditors, then this is not the case as there is the liklihood that the payment to creditors will increase above the 26p in the £.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
15/03/2011 11:08 pm
Hi imcville
If your fees weren't going to your trustee they'd be going to your creditors. You're no better off either way so is it worth worrying about?
And don't forget that your crediors have to agree the fees at the outset so they're at least going to be competitive.
Cheers,
DFW
Topic starter
16/03/2011 12:01 pm
Mark, thanks for your response - I'll come back to you on this separately as there are some details about my Trust Deed that I'd prefer not to post on the forum.
DebtFreeWanabee - you're absolutely correct in that it makes no difference to me either way. I'm not worried - but I am intrigued and would like to better understand how it all works!
16/03/2011 3:20 pm
My understanding is that quite a bit of what is taken by IP's goes out in costs and set charges, to Edinburgh Gazette for example.
Snowball
