Scottish and English debt laws are different, so if you are a Scottish resident and have questions on debt, then this is the place to post.

Moderators: TalbotWoods, JaneClack

Bydmackay41
#48761 Has anyone had experience of what happens if, during the course of a protected trust deed term, some money becomes available to the debtor from an inheritance. I realise the Trustee has to be informed, but would they take it all if, or can the Trustee negotiate with creditors for a lesser amount in some cases.
By JLP
#49319
dmackay41 wrote:Has anyone had experience of what happens if, during the course of a protected trust deed term, some money becomes available to the debtor from an inheritance. I realise the Trustee has to be informed, but would they take it all if, or can the Trustee negotiate with creditors for a lesser amount in some cases.


I dont know whether they would take it all- why dont you have a word with your IP on a "what if" scenario, maybe the will will take eons to go through probate and your TD will be finished by then. If anything like my fathers it might do-he died 4 years ago and his land in Ireland STILL isnt sorted.

I have had to call the artillery in now-MY Husband.
Bydmackay41
#49469 Thanks for that. It does seem a very grey area to say the least. I have trawled the Internet for answers to this, but no-one seems to know.
By GR
#49499 The officail line is that the IP is entitled to any windfall over £250...

Now, I'm not saying you should do this, but.... if it is an inheritance, how will your trustee ever find out? You are not obligated to provide bank statements annually, only pay slips, so if you forgot to tell him, well you're only human.... :wink:
Bydmackay41
#49509 Thanks for that. In the unlikely event that the IP would not be told, would`nt they find out at the time of discharge? I was under the impression enquiries were made with the Inland Revenue.!!
By JLP
#49513
dmackay41 wrote:Thanks for that. In the unlikely event that the IP would not be told, would`nt they find out at the time of discharge? I was under the impression enquiries were made with the Inland Revenue.!!


Not if you stuck it offshore-NOT that I would tell you to do that of course........... :wink: .I do know of one case where a guy was in a Trust Deed and his Mum died. He inherited his Mothers house, the Solicitor kept it in the name of Trustees of Mrs Bloggs (his mum) until the TD was finished and he had been officially discharged. I dont know if the Solcitor handling the estate could do something similar maybe?????

It takes minimum 6 months in Scotland for an Estate to be administered here as they have to make sure that there are no further claims, and oten it can be longer. How long have you to go on your TD?
Bydmackay41
#49667 I have 6 months to go on it. The inheritance is actually funds from a trust fund from a parent (still alive) who has resided abroad for the last few years to avoid paying inheritance tax. A cheque from the offshore fund management company is imminent.

It would cover the trust deed, but it annoys me to think that the initial debt to my creditors is 99% interest that I have been due to them on the initial loans.
By GR
#49809 I personally wouldn't say anything. Keep the money in an account until the end of the TD and if nothing is said then all well and good. If you are questioned the money is there. That way you are covered from all angles.

As I say, that's what I'd do.... :)
By chrissy
#49826 We were told by the Trustees of our Trust Deed that if we realised any assets - they used as an example finding out that a picture was worth £1000.00 - or came into an inheritence that these monies would be taken by them to offset the debt. And further, we were to inform them if we were selling anything of value for it to be considered as an offset amount.
Bydmackay41
#50007 Thanks GR and Chrissy. I am not sure keeping it in a UK bank account would be a good idea as I am sure the Trustee consults with Inland Revenue, or whatever it is now, prior to final discharge. Or does anyone know different?
Bydmackay41
#50595 So much for that idea. No windfall forthcoming now...back to waiting on discharge...thanks to all who contributed.
By JLP
#51077 Update anyway-I spoke to an IP yesterday re this (on a what if scenario). They advised me that they are likely to take a "fair whack" of any windfalls.How much would depend on the amount of debt and the amount of the windfall. It would likely to be at least 50% or even higher. Penalties for not declaring it could be, a revocation of your Trust Deed as you hadnt complied with the terms, which could mean they make you Bankrupt or Court Proceedings.