Trust Deed (Scottish IVA)

[bill-k]

Took out a Trust Deed last year, and have 2 years left on it. Have since discovered that any decent lump sums have to be handed over to my creditors, and they don't go towards getting an earlier discharge, either. Great !!

My creditors are mostly banks and credit card companies, and since taking the Trust Deed out, I have discovered (thanks to CAG/BAG) that these organisations have all unlawfully taken money from me over the years in penalty charges. So much so, that I wouldn't have had to take out the Trust Deed if I had been able to get that money back from them last year.

The irony of it all now, it appears, is that if I DO claim any of MY money back from them now, then it has to be paid straight back to them toward a debt, the total of which includes the very same unlawfully deducted charges !!!

OK., I can wait until I'm discharged before claiming back my bank penalties, but I run the risk of some legislation being passed meanwhile to prevent this.

If I can secure a large enough repayment of these charges, can I "pay off" my Trust Deed early with that ? If so, then if I can offer to immediately pay all of the remaining payments due on the Trust Deed, is that likely to be sufficient to get me discharged ?

Can anybody help with this - or even just sympathise !!! ?

By the way, my own Trust Deed administrator is not very forthcoming with the info - hence my enquiry here !!

[LondonPam]

Hi Bill-k. I can't help with your specific question but I can point you to some help if no-one manages to get back to you here. I use another site that has quite a few specialists posting on it, Debt Help UK : Free debt advice and solutions, with debt consolidation | UK debt consolidation service with free help and advice . There are a few people there that are insolvency practitioners and post on the forum, they may be able to answer your question.
Good luck.

[bill-k]

OK Pam, thanks for that. I took a peek at that one earlier, but didn't post.

I'll introduce myself, now you've mentioned them to me yourself.

Bill.

[Suzy H]

Hi Bill-K

I can both empathise and sympathise with you. I also went down the sequestration route back in 2003 and this was due to be paid up next month. I had missed a good few payments to the company but they never harassed me or sent nasty threatening letters and I paid what I could and when etc.

I finally got some cash together about the middle of this year and called them asking how much it would be to cover the outstanding balance for missed payments and (if it was possible) how much it would be to pay for the rest of the year as well. She quickly provided me with the figure and I cleared off the full balance.

On 27th July 2006 I received my 'Completion of Trust Deed' - the letter confirmed that the Trust Deed arrangement had come to an end and I obtained my discharge on 26 July 2006.

I would definitely pose the question to your Trustee as it certainly made the world of difference to me - good luck

[bill-k]

Bless you, Suzy, and thank you for that.

I, too, have missed some payments and because of that, I have felt that my admins are not too forthcoming with straight answers. I mentioned to them that I was considering reclaiming bank charges, and hoping to pay off our Trust Deed early, and asked what sort of figures & procedures would be involved.

The reply I got was very negative, and was basically "If you think reclaimed bank charges are gonna pay off your arrears plus your balance, then you are on the wrong planet, matey ! Any lump sums you get are to be paid to us for distribution among the creditors (fed to the sharks ), and do NOT come off your remaining balance due under the Trust Deed."

So I turned, tail between legs, and sauntered off back down skid alley (cue violins ).

I had a current account (closed now, obviously !) which went back to the 1980's, and a good case for reclaiming charges plus contractual interest which would easily pay off the TD., but now it seems possible that they will simply say "Oh, thanks for the lump sum - duly distributed - now get back to the grindstone."

I need somebody to tell me that ain't gonna happen. I've got less than 6K due to pay to the TD (incl. arrears).

I'll take your advice, Suzy, and ask them directly for a straight answer on this. After all, reclaimed bank charges are NOT a windfall - they are my money - tax paid - taken from me unlawfully.

Thanks again, my friend.

Bill.

[Suzy H]

Oh dear Bill-k sorry you are having a hard time with your trust deed Why not phone another company and say you are thinking about going down this route ... you're owed X amount of money to creditors blah blah and what would happen if (hypothetically speaking of course) you, after a year or so, wanted to clear off the Trust Deed - could you do this blah blah.

Unfortunately I do not know enough about the system or process to comment on whether or not the lump sum should be distributed to your creditors all I know is that I was lucky enough to be able to clear off mine with a lump sum.

I did however have a look at the last letter I received from my Trustee and it says ...

'COMPLETION OF TRUST DEED

I write to confirm that the final meeting of your creditors was held in my office on 26 July 2006 however none of your creditors appeared. The minute prepared for the meeting recorded that all final proposals submitted to your creditors have been accepted and a payment of 4p in the £ has been issued to the creditors shown on the attached list.

This now brings the Trust Deed arrangement to an end and you obtained your discharge on 26 July 2006.

I have submitted my final report to the Office of the Accountant in Bankruptcy. The Register of Insolvencies will be updated shortly to record that your case has been concluded and that I no longer act as your Trustee.

I am happy for you to show a copy of this letter to any third party who may be interested.

Yours sincerely'

To me this means that the 4p in the £ was already agreed at the signing of the original deed and they were therefore happy at that figure. I cannot see my trustee paying 4p every month to the creditors so I guess the banks etc were either 'bought off' at the start of proceedings or latterly on completion of the deed.

Fingers crossed you get a positive answer soon

Perhaps I should also add that inorder to complete my deed and clear off my missed payments - my settlement figure was around the £4000 mark - so it's not as if it was just a few hundred.

Hope that helps

[Suzy H]

Just had a thought Bill-K ...

Are you looking to claim back unlawful charges from accounts now held under the Trust Deed? If so I don't think you can claim anything back from those accounts.

These debts will now be written off and, if they are anything like the size mine were, they will be to a rather large tune (eg one of my debts was for £18,820.27 and the final dividend payable to BoS was £668.41 so they would of had to of levied just over £18k for me to get anything).

However ... if the levied fees you are claiming back are nothing to do with Trust Deed accounts do you 'really' need to disclose anything? As you put it it's not a change in circumstances or a windfall - it's your tax paid money that was unlawfully taken from you.

Does your trustee ever ask for proof of income or bank statements or anything like that (mine didn't)? If not ... how would they know you had successfully reclaimed your charges.

Hope you caught the jist of that - I kinda waffled on a bitty there

[bill-k]

Thanks for all your time & trouble, Suzy H. Your suggestion to call a coupla companies and "enquire" is worth a go, and your own early discharge gives me hope. Thanks, too, for the final discharge letter details. From what I understand, the "4P in the £" is the initial figure the creditors agreed to, and the final agreement to this I think means that they will accept 4% of the total debts due to them in one final single payment ("in full and final settlement" of your debts with them).

Yes, Suzy, I AM looking to claim back unlawful charges from accounts which were closed when the TD was taken out. My reasoning is this:

1. They took this money from me UNLAWFULLY - years ago, some of it - and they have kept it all this time.

2. In doing so, they played a big part in forcing me to take out the TD.

3. The TD was taken out LAWFULLY, and with their agreement, whereas the penalty charges were NOT.

4. I believe that I am entitled to legally claim money UNLAWFULLY taken from me, regardless of who took it.

5. I believe the banks are entitled to legally claim money LAWFULLY owed to them, which is their TD dividend.

6. I do NOT believe the banks have a right to keep the penalty charges they UNLAWFULLY took from me.

7. So there !!

As regards disclosure - yes, you're right I think. Least said - soonest mended !!

Thanks for that, Suzy. I've got a few things to chew on now....

[Suzy H]

A very good morning to you Bill-k

Brilliant ... can't wait to see the development of your thread - I'm really tempted to scout around for some info myself as, like you, my case would fit nicely into your eloquently put points 1 - 6 and as for 7 ... indeed 'so there'


I would be lying if I said I had never thought about claiming those charges back - I just thought it was not an option! I guess because I owed just over £50k to various banks etc and and their final dividend was just under £2k .


The trust deed was something I came across through a friend who had gone down that route and am eternally grateful for that because I do not think I would be typing this reply to you today otherwise .

I guess looking at it another way ... prisoners who have committed a crime ... if, unfairly treated whilst incarcerated, can sue for damages. This does not negate from the fact they committed the crime - they are just suing for being mistreated.

Guess what i'm trying to say is ... yes the debt was mine and I accept that but it escalated because of their charges etc. I remember once going into Lloyds TSB to ask for a £100 overdraft and coming out with a £10,000 loan - silly when I think of it now but it happened!


Good luck and can't wait to read your updates

[bill-k]

Thanks for the smiley "Good Morning" Suzy !! I "don't do mornings" - so mine would have been a bit insincere !! Good evening, nevertheless !!

Looking at your total TD figures, I think mine are about the same. Yes, there are good arguments for & against imprisoned criminals' rights. But in the case of TD's & bank charges - who is the criminal ? The banks have thrived on making us all feel small and stupid, and I have no conscience whatsoever about my TD, nor claiming penalty charges back. So I feel about as guilty as they do - and that's why I have a "Reason no. 7" !!!

I have some details which I would like to give you, Suzy, in return for your help. However, in the spirit of "careless talk" - I would rather PM you with them, if that is OK.

However, out of respect for you, I won't do this unless you give me an OK., here.

Cheers,

Bill.

[bill-k]

Suzy, thanks for the PM's lately. I'll go public with this bit !!
I'd be glad to help where I can, with whatever I've learned since I stumbled onto the forum a coupla months back. Info you may already know, but may have only appeared since you last checked BAG:-
1. You DON'T need to send Data Protection Act S.A.R - (Subject Access Request)'s if you have sufficient paperwork (statements, etc.) to support your figures, you only need to if you've lost or shredded (etc) them.
2. You can claim back the £10 S.A.R - (Subject Access Request) fee in your claim, though !
3. It has NOT yet been established (as far as I know) that the 6-year Statute of Limitations applies to claims for unlawfully deducted penalty charges, so claims going back to the Domesday Book are in theory worth a go !!
4. The 6-year limit doesn't apply to Data Protection Act S.A.R - (Subject Access Request)'s either. BUT, if they don't send you everything, get confirmation that there is no more, etc. That way, they can't dispute estimated amounts so easily.
5. Contractual interest - the big Kahuna !!! - This can make a HUGE difference, especially when you do it right and use one of the spreadsheets to calculate it properly. It is interest at a higher rate than Statutory, and COMPOUNDED on a daily basis, just like the banks do. If you've got stuff going back a few years, you won't believe the figures, at first !!

You'll probably know there are templates & spreadsheets in the library, plus some others on-thread. Check out these threads - and take your time:-

Why is no one claiming the contractual rate of interest???

A New Way of Looking at Interest- 1st successful Claim - N'wide

Authorised Interest and Unauthorised interest

Contractual interest?

Claiming on a closed account

over 6 year time limit

Proving the banks knew the charges were unlawful- thereby negating The Limitation Act

There - that'll keep you out of trouble for a day or two.

You won't thank me for the headache it'll probably give you, but you might just enjoy the end result when it finally comes !!

Have fun,

Bill.

Bill, thanks for the link.

I believe you only have two options.

1. claim now.
2. claim in 2 years time, after the TD.

1. - if you did this, I don't think you would legally be able to stop the money from going into the creditors' pot, because I think you would have to declare the change in your financial circumstances, AND, as you have pointed out, there is also some question over whether you would also have to continue making the agreed payments.

My only other thoughts on this are that you negotiate a deal with your IP to keep 50% otherwise you don't make the claim. You appear to be in quite a strong bargaining position here because you can't be forced to make the claim and he can't do it for you, but are you happy with only keeping a percentage?

HOWEVER, if the creditors got a whiff of this, could they apply to court to have the TD overturned and a more formal bankruptcy started so that a trustee could make the claim on your behalf?

Another issue that might arise is that the bank says "we will refund the charges but we will only use them to set-off against your debt to us". It is my opinion that not all cases should be refunded by cheque if it can be seen that the charges part of the debt has never been paid by you anyway, and still makes up part of the larger debt still in existence. I think they are paying by cheque because they don't want to go to court. If however you believe that you have paid the charges by making regular payments off the debt, when the account was still in operation, that might not be the case here. I'm not saying they would go to court in your case, but it could feasibly become a sticking point at some stage which your IP might have to preside over in determining what their claim against the TD is. These are just some of the things I have been pondering over and maybe you know better than I do about this.

Yet another problem might be that if the IP has to obtain a vote of your creditors over whether he should take action against you to get his hands on money you are reclaiming, is there a conflict of interests here with the bank being a major creditor and would this mean he has to go to court to get directions? This could work against you keeping the money.

2 - this sounds much the better option, even though you would have to wait 2 years. Then again you'll get another 2 years of compound contractual interest!!

I don't think you need to worry too much about the banks discovering any way out of the mess they are in - these are penalties and the case law is there to back us up. Also, with S.32 LA you've got six years from the OFT's report to take action. You didn't find out about all this until 2008 did you Bill? You get to keep the lot because you've paid the TD which all your creditors agreed to.


This is all just my opinion you understand and I hope it helps you in some way. I understand your thinking that this isn't a windfall, but am I correct in thinking that if your financial situation changes you have to inform the IP? Wouldn't want to see you get that far and then lose it all. The way your creditors will see it is that had this money not been taken from your account in the first place, you would have probably been able to afford to clear your debts, or some of them.

Ignore my comment about not finding out about this until 2008, if you've got six years - you've got six years. You can spend two years researching and hand-writing your claim!!

I'll put the kettle on while I'm waiting