Discharged TD but PPI going to debtor?

Quiggles5

Hi. I received last week a letter out of the blue from barclaycard. It was reference a PPI claim I had rejected in 2011. They have now for some reason after all this time to pay it to me but I have been told that the money has to go to my old trustee firm. I was discharged over 2 years ago. Can they do this?

Insider101

Quiggles5 wrote: »

Hi. I received last week a letter out of the blue from barclaycard. It was reference a PPI claim I had rejected in 2011. They have now for some reason after all this time to pay it to me but I have been told that the money has to go to my old trustee firm. I was discharged over 2 years ago. Can they do this?

Probably not. You should speak to the trustee. If the arrangement is fully closed and the trustee has been discharged then it is unlikely that they are able to be reappointed once the deed is closed. If that is the case then I suggest you ask them to advise Barclays of that. In which case the money will have to be paid to you. Hence, they may have actually done you a favour by delaying the payment for three years.

Quiggles5

Thanks for your reply. After speaking with my TD company they tell me that they have taken legal advice and can reopen the TD for this purpose. They are sending me a copy of a letter stating facts that this can be done. It's frustrating to say the least. It's not a huge amount of money but lessons have been learnt and I now am the proud owner of a mortgage. Surely 2 years down the line this can't come back and bite me ?

dunstonh

IIRC, the trust deed is the scottish version of bankruptcy? In England and Wales, if discharged, you still dont get the right to keep the money. It goes to the creditors. My understanding was that was the same for Trust Deeds.

Only if the premiums were paid after discharge would you get the money. For premiums paid before discharge, they belong to the estate to be distributed to the creditors.

Insider101

dunstonh wrote: »

IIRC, the trust deed is the scottish version of bankruptcy? In England and Wales, if discharged, you still dont get the right to keep the money. It goes to the creditors. My understanding was that was the same for Trust Deeds.

Only if the premiums were paid after discharge would you get the money. For premiums paid before discharge, they belong to the estate to be distributed to the creditors.

No, it's the Scottish equivalent of an IVA.

Insider101

Quiggles5 wrote: »

Thanks for your reply. After speaking with my TD company they tell me that they have taken legal advice and can reopen the TD for this purpose. They are sending me a copy of a letter stating facts that this can be done. It's frustrating to say the least. It's not a huge amount of money but lessons have been learnt and I now am the proud owner of a mortgage. Surely 2 years down the line this can't come back and bite me ?

Historically the position of most trustees has been that once it's closed its closed. But there are some who are now starting to take the line that actually they can. I would ask them to set out in what basis they consider themselves entitled to the funds and notify Barclays that you dispute it (if they haven't paid it already). Then take your own legal advice. However, you may not win in court and you'll have to consider whether the amount of money is worth the risk..

antrobus

Quiggles5 wrote: »

Thanks for your reply. After speaking with my TD company they tell me that they have taken legal advice and can reopen the TD for this purpose. They are sending me a copy of a letter stating facts that this can be done. It's frustrating to say the least. It's not a huge amount of money but lessons have been learnt and I now am the proud owner of a mortgage. Surely 2 years down the line this can't come back and bite me ?

It depends on how the TD is worded. My understanding is that it is 'normal' to specify that "the debtor’s whole estate will vest in the trustee". And the 'debtor’s whole estate' might well be held to include any potential PPI claims.

http://www.hmrc.gov.uk/manuals/insmanual/ins3403.htm

welshgasman

My understanding was also that a Trust deed is the Scottish equivalent of Bankruptcy. However I know that unlike English Bankruptcy where anything taken out prior to the Bankruptcy goes to the Official Receiver, in Scotland it can go to the debtor depending on the conditions of the Trust deed. The o/p seems a little unlucky in this regard.

Insider101

I

welshgasman wrote: »

My understanding was also that a Trust deed is the Scottish equivalent of Bankruptcy. However I know that unlike English Bankruptcy where anything taken out prior to the Bankruptcy goes to the Official Receiver, in Scotland it can go to the debtor depending on the conditions of the Trust deed. The o/p seems a little unlucky in this regard.

Trust me (no pun intended) it isn't. A scottish bankruptcy is called a sequestration. The position with these is identical to an English bankruptcy, I.e if the PPI was sold prior to the date of bankruptcy then the Accountant in Bankruptcy (Scottish equivalent of the official receiver) is entitled to the funds.

However, unlike the OR, who want everything however small, the AIB has a threshold of around £2.5k whereby if the redress is below this level they will waive the interest as it is not considered cost effective to seek reappointment as trustee of the bankruptcy estate. Basically the legal costs would swallow up the whole amount of the redress.

In a trust deed, as per my previous post, historically most trustees have taken the view that once the deed is closed it is closed. However, there are some now who are starting to test the water with arguments as to why they are entitled to seek reappointment. All of which promises to drag the whole saga out even longer!

welshgasman

Thank you, that is useful to know.

Insider101 wrote: »

I

Trust me (no pun intended) it isn't. A scottish bankruptcy is called a sequestration. The position with these is identical to an English bankruptcy, I.e if the PPI was sold prior to the date of bankruptcy then the Accountant in Bankruptcy (Scottish equivalent of the official receiver) is entitled to the funds.

However, unlike the OR, who want everything however small, the AIB has a threshold of around £2.5k whereby if the redress is below this level they will waive the interest as it is not considered cost effective to seek reappointment as trustee of the bankruptcy estate. Basically the legal costs would swallow up the whole amount of the redress.

In a trust deed, as per my previous post, historically most trustees have taken the view that once the deed is closed it is closed. However, there are some now who are starting to test the water with arguments as to why they are entitled to seek reappointment. All of which promises to drag the whole saga out even longer!