Trust Deed Fees

 

Trust Deed fees and outlays

All fees and outlays incurred during the administration of your Trust Deed are met from the realisations made from your income contributions and/or assets. You do not have to pay additional fees or charges.

Simple Financial Solutions Ltd fees:

Simple Financial Solutions Ltd (SFS) will charge a fee for their services if you decide to go ahead with a trust deed. There will be no charge for our advice if you choose not to go ahead with a trust deed. Following advice from your SFS adviser, if you choose to go ahead with a trust deed then we will pass a completed fact-find and supporting documentation to an Insolvency Practitioner who will then contact you and prepare the relevant legal paperwork for you to sign your trust deed. The Insolvency Practitioner (or his employer) will pay a fee to SFS for the work we carry out prior to you making the trust deed proposal. This fee will be approximately £1,000-1,500. If your trust deed is administered by Simple Financial Associates Ltd (SFA), an associated company of SFS, there will not be a fee paid from SFA to SFS. You are not required to pay SFS any sums over and above the sums paid to us by your Insolvency Practitioner. Please click here to read our FAQs for further information relating to the trust deed process.

Your Insolvency Practitioner will also charge a fee for their services. All fees and outlays incurred during the administration of your trust deed are met from the realisations made from your income contributions and/or assets and are exempt from VAT. Your Insolvency Practitioner will provide further information regarding their fees and the work they are required to do before you agree to proceed with a trust deed. The illustration below details the fees and outlays that may be involved in the administration of a trust deed.

Trustee’s fees:

The structure of your Trustee’s fee is determined by the legislation which governs Trust Deeds. The fee will consist of:

(a)    A fixed fee, typically £2,500 for a 4 year Trust Deed.

(b)   An additional fee based upon a percentage of the total assets & contributions realised by the Trustee, typically set at 20%.

(c)    Outlays incurred after the date the Trust Deed was signed (detailed below).

The Trustee’s fixed fee and additional fee are exempt from VAT.

The total fee will be advised to creditors in the Trust Deed proposal. The fee will be drawn by your Trustee periodically throughout the period of your Trust Deed and is subject to approval by you and your creditors. If you or your creditors are unhappy with the level of the fee then you are able to request an audit of the fee by the Accountant in Bankruptcy (the government agency who supervises Trust Deeds in Scotland). The Accountant in Bankruptcy will then complete their audit and charge a statutory fee of 5% of any fees and outlays fixed for auditing such accounts, thereby reducing the funds available for distribution to creditors.

The fixed and additional fees are based on the following work being required to setup your Trust Deed and administer it through to its’ conclusion. Your Trustee along with suitably qualified members of his staff will undertake these tasks (this list is not exhaustive);

  • The required number of meetings (by telephone or at your home, our office or another suitable place) to give you advice prior to you deciding a Trust Deed is the appropriate debt solution for you.
  • Preparation of the Trust Deed proposal.
  • Complete the necessary work to have your Trust Deed registered as ‘protected’.
  • Liaising with you, your creditors, the Accountant in Bankruptcy and any other third parties relevant to your case e.g. property surveyors, secured creditors etc.
  • Monitor payment of your monthly income contributions.
  • Realise any assets with a value to your Estate.
  • Re-assessing your circumstances if they change during the term of the Trust Deed and reporting this to creditors where necessary.
  • Conduct an annual review of your income & expenditure.
  • Send an annual report to your creditors updating them on the progress of your Trust Deed.
  • Adjudicate on creditors’ claims.
  • Pay a dividend(s) to your creditors.
  • Generally ensuring that the Trust Deed performs satisfactorily for you and for your unsecured creditors.
  • Complete the necessary work to grant both your discharge and the Trustee’s discharge from the Trust Deed.

Trust Deed outlays:

Every Trust Deed also has statutory and non-statutory outlays to pay, the non-statutory outlays vary from firm to firm, examples of a trust deed’s outlays are listed below:

  • Register of Insolvencies – £35
  • Registers of Scotland – £30
  • Bordereau insurance – £80
  • Accountant in Bankruptcy registration fee – £36
  • Accountant in Bankruptcy supervision fee – £100 for every year of supervision by AiB
  • Software/postage costs – £384

As such, the following is an example of the costs of a typical Trust Deed:

Based on unsecured debts of £30,000

Based on monthly contributions of £300, no assets

Total paid over 48 months: £14,400

Typical Trustee’s fee (agreed by creditors & debtor): £5,380

Typical outlays: £965

Pence in the £1 received by creditors: 26.85p in the £1

Amount paid to creditors: £8,055

Amount of debt written off: £21,945

Note: It is essential that you maintain your agreed monthly contributions into your Trust Deed. If at any point during the term of your Trust Deed you feel you can no longer afford the payments agreed, you must contact your Trustee or their staff to discuss.

Contacting us to discuss any payment difficulties you are experiencing or changes in circumstances is essential, Trust Deeds do provide an element of flexibility, you may be allowed to have a payment break if you come up against unexpected costs (such as essential home repairs) or your Trustee may be able to review and amend your contribution to suit your changed circumstances.

If you fail to keep up with your agreed contributions and fail to contact your Trustee to discuss, your Trustee may contact your employer to have your contribution paid directly from your salary. Alternatively, your Trustee might refuse your discharge from the Trust Deed, leaving you liable for payment of your unsecured debts at their original contractual payment level. Lastly, in some cases, you may be sequestrated (made bankrupt) by your Trustee for failing to comply with the terms of your Trust Deed.

 

 


 

Sequestration Fees

 

Application fee

Prior to making your application for sequestration you must pay £200 application fee to the Accountant in Bankruptcy (an agency of the Scottish Government). More information regarding this fee and how to pay it will be provided by your adviser.

Sequestration fees and outlays

All fees and outlays incurred during the administration of your Sequestration are met from the realisations made from your income contributions and/or assets. You do not have to pay additional fees or charges to Simple Financial Solutions Ltd or your insolvency practitioner.

Simple Financial Solutions Ltd fees:

There will be no charge for our advice if you do not choose to go ahead with sequestration. Following advice from your SFS adviser, if you choose to go ahead with sequestration then we will pass a completed fact-find and supporting documentation to the Insolvency Practitioner at Simple Financial Associates LTD (SFA), an associated company of SFS, who will then contact you and prepare the relevant legal paperwork for you to apply for sequestration. There is no fee paid from SFA to SFS for the work that we carry out on their behalf. Please click here to read our FAQs for further information relating to the sequestration process.

Your Insolvency Practitioner at SFA will charge a fee for their services. All fees and outlays incurred during the administration of your trust deed are met from the realisations made from your income contributions and/or assets. Unlike in a trust deed, your Trustee’s fees in sequestration are liable to VAT charges. Your Insolvency Practitioner will provide further information regarding their fees and the work they are required to do before you agree to proceed with sequestration. The illustration below details the fees and outlays that may be involved in the administration of a sequestration.

Trustee’s fees:

At Simple Financial Associates Ltd, your Trustee’s fee will be determined on a time and line basis i.e. the Trustee will make an appropriate charge for the time spent administering your case. In a typical Sequestration with a 3 year income contribution and no assets this will amount to approximately £5,300. Trustee’s fees in a Sequestration are not exempt from VAT (unlike Trust Deed fees).

The fee will be drawn by your Trustee after each anniversary of the Sequestration (funds permitting) and is subject to an audit by the Accountant in Bankruptcy (AiB) and approval by you and your creditors. If you or your creditors are unhappy with the level of the fee determined then you are able to appeal the determination to the Sheriff.

The fee is based on the following work being required to administer your Sequestration from the beginning through to its conclusion. Your Trustee along with suitably qualified members of his/her staff will undertake these tasks (this list is not exhaustive);

  • Meeting with you to complete all statutory paperwork, including debtor’s questionnaire and Statement of Assets & Liabilities.
  • Complete the statutory documentation for the AiB and writing to creditors to advise them of your sequestration.
  • If applicable, calling and holding a meeting of creditors.
  • Liaising with you, your creditors, the Accountant in Bankruptcy and any other third parties relevant to your case e.g. property surveyors, secured creditors etc.
  • Monitor payment of your monthly income contributions.
  • Realise any assets with a value to your Estate.
  • Re-assessing your circumstances if they change during the term of the Sequestration and reporting this to creditors where necessary.
  • Conduct a 6 monthly review of your income & expenditure.
  • Send an annual account to the AiB.
  • Send an annual report to your creditors updating them on the progress of your Sequestration.
  • Adjudicate on creditors’ claims.
  • Pay a dividend(s) to your creditors.
  • Generally ensuring that the Sequestration performs satisfactorily for you and your unsecured creditors.
  • Complete the necessary work to obtain the Trustee’s discharge from the Sequestration.

Sequestration outlays:

At Simple Financial Associates Ltd, every Sequestration has the following statutory outlays to pay:

  • Accountant in Bankruptcy registration of award – £20
  • Accountant in Bankruptcy supervision fee – £210
  • Accountant in Bankruptcy audit fee – 17.5% of the Trustee’s net fee and the non statutory outlays (bordereau insurance, property valuation etc)
  • Accountant in Bankruptcy dividend supervision fee – £69
  • Accountant in Bankruptcy examination of sederunt book – £36

A Sequestration also has the following non statutory outlays to pay:

  • Bordereau insurance – £80
  • Software/postage costs – £348

As such, the following is an example of the costs of a typical Sequestration (administered at Simple Financial Associates Ltd) with no assets:

Based on unsecured debts of £30,000

Based on monthly contributions of £300, no assets

Total paid over 36 months: £10,800

Typical Trustee’s fee (to be agreed by creditors & debtor): £4,000 + VAT

Typical outlays (statutory and non statutory): £1,109.90

Pence in the £1 received by creditors: 16.3p in the £1

Amount paid to creditors: £4,890.10

Amount of debt written off: £25,110

Note: It is essential that you maintain your agreed monthly contributions to your Sequestration. If at any point during the term of your Sequestration you feel you can no longer afford the payments agreed, you must contact your Trustee or their staff to discuss.

Contacting us to discuss any payment difficulties you are experiencing or changes in circumstances is essential, you may be allowed to have a payment break if you come up against unexpected costs (such as essential home repairs) or your Trustee may be able to review and amend your contribution to suit your changed circumstances.

If you fail to keep up with your agreed contributions and fail to contact your Trustee to discuss, your Trustee may enforce your payment via the court and an Income Payment Order. It is also possible to have payments deducted and paid directly from your employer.

 

 

 


 

Simple Financial Solutions Ltd – Debt Arrangement Scheme (DAS) fees

 

DAS services are provided through an associated company, Simple Financial Solutions Limited. Simple Financial Solutions Ltd is registered in Scotland (No SC382881) and is authorised and regulated by the Financial Conduct Authority in respect of its consumer credit-related activities, FCA registration no 641275.

Advice & setup fee

If Thomas Fox at Simple Financial Solutions (SFS) is your continuing money adviser then the advice & setup fee is the equivalent of one monthly payment of your calculated disposable income.

It is payable when you have decided that you wish to apply for a Debt Payment Plan (DPP) under DAS and is paid prior to the application being processed on the DAS Hub.

The fee is based on the following work being required to set up your DPP. Your continuing money adviser along with suitably qualified members of his staff will undertake these tasks (this list is not exhaustive);

  • The required number of meetings (whether by phone or at your home, our office or another suitable place) to give you advice prior to you making a decision that DAS is the most appropriate debt solution for you.
  • Completion of the necessary paperwork to allow us to proceed with your application.
  • Intimation of the DPP under DAS.
  • Confirm all creditor balances and process the application.
  • Write to all creditors with the DPP proposal, if applicable.
  • Negotiate with creditors/provide evidence to the DAS Administrator (AiB) to support the fair and reasonable test.
  • Write to all creditors advising approval of the DPP.
  • Liaising with you, your creditors, the DAS Administrator and any other third parties relevant to your case.

Monthly management fee

The monthly management fee is based on the number of creditors you have with the following criteria being applied:

  • Management fee:

 

o   1-5 creditors £30/m, 6-10 creditors £35/m, 11+ creditors £40/m

 

This payment is made by standing order directly from your bank.

The fee is based on the following work being required to administer your DPP. Your continuing money adviser along with suitably qualified members of his staff will undertake these tasks (this list is not exhaustive);

  • Monitor payment of your monthly income contributions.
  • Manage your creditors to stop correspondence and calls being made to you.
  • Re-assessing your circumstances if they change during the term of the DPP and reporting this to creditors where necessary.
  • Process a variation in your payment, if required.
  • Process a payment holiday, if required.
  • Conduct an annual review of your income & expenditure.
  • Generally ensuring that the DPP performs satisfactorily for you and for your creditors.

As such, the following is an example of the costs of a typical DPP under DAS when using the money adviser at Simple Financial Solutions Ltd:

  • Based on unsecured debts of £10,000
  • Based on disposable income of £275
  • No of creditors: 5
  • Advice & Setup fee: £275
  • Monthly management fee: £30
  • Payment to DPP: £245
  • Period of DPP: 3 yrs 5 mths
  • Total cost of DPP: £1,505 (£275 + £1,230)

Note:

It is essential that you maintain your agreed monthly contributions into your DPP. If at any point during the term of your DPP you feel you can no longer afford the payments agreed, you must contact your Money Adviser or their staff to discuss.

Contacting us to discuss any payment difficulties you are experiencing or changes in circumstances is essential, DPPs under DAS do provide an element of flexibility. You may be entitled to a payment break in certain circumstances (such as illness or redundancy) or your Money Adviser may be able to review and amend your payment to suit your changed circumstances – this is subject to creditor approval.

If you fail to keep up with your agreed payments and fail to contact your Money Adviser to discuss, your DPP may be revoked, leaving you liable for payment of your debts at their original contractual payment level (including interest and less any payments made to date).

 

Free advice:

You will be advised that if applying for a DPP under DAS that free money advice is available and you will be provided with a list of all free money advisers in Scotland. By choosing a free sector money adviser it is likely to reduce the payment term of your DPP. A free sector money adviser will give you advice and work with you to complete the DPP application. Once the DPP is approved the free sector adviser will not act as your continuing money adviser, unlike SFS who will act for you throughout your DPP.