Trust Deed Creditors Encouraged To Claim Money

Posted on Thursday, 22 December 2011 in Statisitics and Legislative NewsFor many people currently repaying their debts using a Scottish Trust Deed and for those who have been formerly discharged from their Trust Deeds, most would agree that the most stressful time of the whole process is the time between the notice being published in the Edinburgh Gazette and the 5 weeks objection window.

The most frustrating time for some people is the period after all agreed payments have been made and there is a wait before the official discharge documentation comes through. This can take a number of weeks.

In recent months, some people have found that their discharge has been delayed as a number of insolvency practitioners choose to contest existing PPI claims which is causing delays for these people. More recently in some cases, some insolvency practitioners are awaiting clarity over VAT. Watch this space for updates on this particular topic.
It is understandable in any situation why a delayed discharge can cause frustration, after all, the individual has made a regular repayment for a period of 36 months and therefore did their bit as agreed, the hard work for want of a better phrase.

Why Would a Trust Deed Discharge Get Delayed?

Believe it or not, it is usually due to the creditors themselves completing the paperwork at their end including claiming their funds.

In December 2011, the regulatory body of Trust Deeds in Scotland (Accountant in Bankruptcy - AiB) issued a press release encouraging creditors to claim their due funds. The AiB holds the responsibility of holding 'consignations' which is the term for unclaimed funds from Trust Deed Creditors and between April 2011 and December 2011 - the Accountant in Bankruptcy successfully returned £4.4m through investigative and partnership work.

Under Scots law, the AiB must retain consignations for a period of 7 years and after this period, the unclaimed monies are then surrendered to the Scottish Consolidated Fund. The Scottish Consolidated Fund is a fund maintained by the Scottish Parliament, as determined in the Scotland Act 1998.

There are many reasons why creditors are slow to claim the money owed back to them but one of the explanations is that debt will often be sold and transferred from lender to debt collection agencies to debt purchase agencies. The line of internal communication can often be broken - many of the larger creditors hold several thousand such delinquent debts from people all over the UK.

The trust deed typical repayment period is thirty six months and a lot can happen in that time most of which will be oblivious to the individual and illustrates why you should forward any letters to your Trustee.

Creditors who had successfully been repatriated with their monies included RBS (who were reunited with £1.15m of lost funds in December 2011 alone) and the Lloyds Bank Group.

The Chief Executive of the AiB, Rosemary Winter-Scott stated "It is important that Scotland's insolvency process balances the needs of debtors and creditors.

When dividends are produced as a result of insolvency, it is key that they are actually returned to the creditors to whom they belong, for the benefit of the wider economy.

The has worked hard to ensure that it is better able to connect creditors with funds they might not otherwise have received and as a consequence, reduce the amount of creditors' funds the Agency holds."

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