How much debt do you need for a Trust Deed?

As long as at least 75% of your creditors agree, the trust deed can be set up. The insolvency practitioner will usually charge a fee (in line with industry agreements), and the money will be deducted from the monthly payment.

Can I get credit with a Trust Deed?

Once you have successfully completed your Trust Deed it will still show on your credit reference agency files for another two years, which may make it more difficult to obtain credit, although not impossible. Six years after the Trust Deed starts, your credit rating will contain no mention of it.

What happens when a trust deed is registered?

A registered Trust Deed becomes an official document which carries support and force of law. a registered deed effectuates transmutation of possession. The registration of a trust-deed, in the absence of an intention to the contrary, is enough to convey the title to trust-property to the trustee, even if the trust deed is not delivered to him;

How does a trust deed need to be amended?

A trust deed can also be amended by way of an application to court either in terms of the Common Law or in terms of section 13 of the Trust Property Control Act, 57 of 1988.

Can a trust deed override a will?

If the trustees follow only the letter of wishes and do not apply their discretion, they risk being attacked by beneficiaries and creditors. In the event that the trust deed and will conflict, the trust deed, as contract, will, in principle, override the will.

What can not be included in a trust deed?

A trust deed cannot include debts such as: any obligation to pay maintenance to an ex-spouse due under a court order (not Child Support Agency arrears or Child Maintenance Service arrears); and money owed to a creditor whose debt is secured on your property (such as a mortgage or secured loan).

What can I do if my trust deed includes my Home?

If your trust deed does include your home, you have family living with you and your trustee does want to sell the home, you can apply to the sheriff court to ask for the sale to be refused or delayed for up to 3 years. If you share a debt with someone else this is called ‘joint and several liability’.

When is there a deficiency in a deed of trust?

Deficiency – arises when a creditor does not receive the full amount they are owed by contract or court order. If a deed of trust, 2 ½ acres or less, used as a one or two family dwelling AND property sold through trustee’s sale – NO DEFICIENCY.

Can a trust deed be executed in more than one language?

1.8 The Trust Deed or declarations may be executed in both English and other languages. If there is a conflict between this Trust Deed in its various translations the English version shall prevail. 1.9 This Trust Deed may be executed either in one original or in counterpart.

When does a deed of trust need to be drafted?

Because the Deed of Trust can be drafted either during the conveyancing process when you bought the property, or at a later date during your ownership, the question of whether your mortgage lender needs to be informed of the deed is one that only your Declaration of Trust solicitor can answer. This is because each situation is different.

How much debt do you need for a trust deed?

As long as at least 75% of your creditors agree, the trust deed can be set up. The insolvency practitioner will usually charge a fee (in line with industry agreements), and the money will be deducted from the monthly payment.

What’s the interest rate on a trust deed?

Professional first trust deed investors who source and originate their own loans can charge borrowers an annual interest rate of 10-11% and 2 points for a six month loan at 80% loan-to-cost.

Where does the money come from to invest in trust deeds?

For the most part the only returns that the investor will be entitled to will come from interest income generated from the loan. Directly investing in trust deeds requires that the investor identify borrowers, assess deals on their merit, and conduct due diligence on the borrower and the property.

What is margin of safety in trust deed investing?

The margin of safety is the difference between the loan amount, and the value of the underlying property. The core concept of trust deed investing is that if the borrower does not perform, the lender can foreclose on the property and sell it to recoup the investment, plus any past due interest.

What’s the difference between schedule a and Schedule B deed of trust?

WHEREAS, the Settlor wishes to settle on the Trustee that Property set out in Schedule A for the benefit of those beneficiaries set out in Schedule B. WHEREAS, the Trustee for his part is willing to accept the Property set out in Schedule A on trust for the beneficiaries set out in Schedule B and to hold the Trust Fund for their benefit.

What does it mean to invest in a trust deed?

Trust deed investing is simply investing in loans secured by real estate. Most trust deed investments are relatively short term loans (maturity under five years, with many loans two years or less) made to professional real estate investors.

Professional first trust deed investors who source and originate their own loans can charge borrowers an annual interest rate of 10-11% and 2 points for a six month loan at 80% loan-to-cost.

The margin of safety is the difference between the loan amount, and the value of the underlying property. The core concept of trust deed investing is that if the borrower does not perform, the lender can foreclose on the property and sell it to recoup the investment, plus any past due interest.

Do you have to pay taxes on trust deed income?

Income received into an IRA or other qualified retirement account can be re-invested tax-free. The taxes are due when the funds are withdrawn from the account. Income from trust deed investments is treated as ordinary income. In other words, it is taxed at a relatively higher rate than some other types of income.