The cost of a Trust Deed is one of the key things you need to understand before deciding whether or not to use this debt solution.
Clearly if you are struggling to pay the debt you owe you will probably not have any available money to pay fees. However this is where a Trust Deed can offer you a significant advantage.
You do not have to pay anything to get the Arrangement up and running. Once it is in place your Insolvency Practitioner (IP) also known as the Trustee will then charge fees for the professional work that they do. However you will not pay these from your own pocket. They are simply deducted from the ongoing payments you make.
The Nominee Administration Fee
The Insolvency Practitioner who presents your Trust Deed proposal to your creditors is called the your Nominee. The work of the nominee includes agreeing your Trust Deed proposal with your creditors. This work includes:
– An initial meeting (normally face to face) to fully understand the details of your income, expenditure, assets and income
– Gathering supporting documentation and preparing your proposal document
– Liaising with creditors if necessary
– Convening the meeting of creditors, chairing the meeting and again liaising with creditors on any queries or modifications they request
The Nominee will charge a Fixed Administration Fee for this work. The amount charged varies depending on how much is paid into the Trust Deed.
BMD Tip: You do not have to pay this fee directly. It is taken from the normal payments that you make into your Trust Deed.
Do you want help to start a Trust Deed? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts
The Trustees Realisation Fees
Once your Trust Deed is accepted by your creditors, your Insolvency Practitioner’s role will normally change from being the Nominee to being the Trustee. It is possible for your creditors to request a different Trustee but this is rare. The work that the Trustee must undertake includes:
– Monitoring your contributions into your Trust Deed
– receiving and adjudicating creditor claims
– Making distributions to creditors as required (normally monthly but could be quarterly or annually).
– review and realisation of assets where required
– Generally monitoring the progress of your Trust Deed in accordance with the proposals.
– Carrying out an annual review of your case (or at intervals required by your creditors) and reporting to creditors and the Accountant in Bankruptcy
– Working with you to manage any changes in your financial circumstances
The IP will charge a ‘Trustees Realisation Fee’ for supervising your Trust Deed. This fee will normally be capped by creditors at between 15%-20% of the money paid into the Trust Deed after the Nominee Fee and initial costs have been deducted.
BMD Tip: You do not have to pay these fees directly. They are taken from the normal payments that you make into your Trust Deed.
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