Trust Deeds and Your Assets

Any assets of significant value other than essential household items or items required for work purposes may have to be sold to raise money to pay into the trust deed.

Typically you are required to release equity in your property by re-mortgage.

Property & Trust Deeds

Release of Equity
If you are a homeowner, your trustee will have a valuation on your property made and obtain current redemption figures from and the mortgage and/or other secured loans held against the property. This applies to all properties you have any financial interest in, including those abroad.

The equity in the property is the difference between the valuation and the redemption figures. Your share of this will be required to be released for the benefit of your creditors. Normally to do this, the property is re-mortgaged or the equity purchased by a third party, such as a family member.

All the identified equity needs to be surrendered, however, in certain circumstances, your creditors may agree to accept a lower amount.

Power of the Trustee.
The Trustee is an insolvency practitioner assigned to oversee your trust deed. If necessary, your trustee can raise an action through the court to force the sale of the property, although is only used as a last resort.

This can happen in the case of joint ownership where one party, for example an ex partner not subject to the trust deed refuses to participate in the process. They could initially refuse to sell or allow refinance of the property to allow creditors to get hold of your part of the equity.

Cars & Trust Deeds

You will not necessarily be forced to sell your car or other vehicle when entering into a trust deed. Its value, you personal circumstance and the need of your car to work, will determine whether you may keep the vehicle. The emphasis here is on the word need, which is not the same as convenience. The trustee has the power obtain a court order to sell your car if you are uncooperative.

Transferring ownership of a car prior to a Trust Deed.
You can't give away your car (or any other asset) just before entering into a trust deed in the hope of hiding its value from your creditors. This is called a transaction at under value. Any asset transferred to any party up to five years prior to the a trust deed can be challenged by your trustee, and the transaction reversed under court order.

Whose name appears on the V5 Vehicle Registration form as the registered keeper of a vehicle does not defined who is the owner. If the registered keep if your spouse or son/daughter, but you have paid for the car, then the car is considered to your asset.

Leasing a vehicle while in a Trust Deed.
You can lease a car whilst in a trust deed, provided you do not obtain ownership of the vehicle at the end of the lease period and provided you are able to make monthly payments into the trust deed.

Vehicle on hire purchase while in a Trust Deed.
Such vehicles will be required to be valued at the end of the trust deed and any value in the vehicle must be paid into the trust deed.  If you change your car during the trust deed it is the value of the car which you own at the end of the trust deed which must be paid into the estate.

Live in England
Or Wales ?

Please see IVAs.
Trust Deeds are for Scottish Residents Only.

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