Charging Orders Petition - Sign it NOW! - Page 2

debt monkey · 20th May 2008, 16:19

The banking code has to work both ways though, how many debtors really contact their bank as soon as they know they are going to have difficulties paying?

The first the bank normally knows of any problems is after they have defaulted on payment.

sequenci · 20th May 2008, 16:37

Quote:

Originally Posted by debt monkey

The banking code has to work both ways though, how many debtors really contact their bank as soon as they know they are going to have difficulties paying?

Most that I speak to actually do. You seem to be quite defensive of the banks etc, what do you do for a living?

suzieblooz · 20th May 2008, 17:00

Quote:

Originally Posted by debt monkey

The banking code has to work both ways though, how many debtors really contact their bank as soon as they know they are going to have difficulties paying?

The first the bank normally knows of any problems is after they have defaulted on payment.

I contacted my bank as soon as I knew I had problems, and offered a token repayment of £30 a month until my DMP was sorted out. And they responded by continuing to charge me £58 a month in charges and interest thereby increasing the debt by £28 every month for 5 months. (The whole of my debt was made up of charges which I got back - £2500)
And this is meant to be the banks being sympathetic and understanding........

debt monkey · 20th May 2008, 17:35

Quote:

Originally Posted by sequenci

Most that I speak to actually do. You seem to be quite defensive of the banks etc, what do you do for a living?

I dont work in a bank.

Most people that I speak to do not contact the bank as soon as they know they will have a problem and prefer to bury their head in the sand.

With regard to charges, what do you suggest they do?

If they agreed to freeze charges and interest as soon as you phoned them up and said you were in difficulties, everyone would be phoning them up tomorrow.

sequenci · 20th May 2008, 17:41

Quote:

Originally Posted by debt monkey

I dont work in a bank.

i didn't suggest you did.

Quote:

Most people that I speak to do not contact the bank as soon as they know they will have a problem and prefer to bury their head in the sand.

I advocate contacting a lender ASAP, in writing.

Quote:

With regard to charges, what do you suggest they do?

follow the civil procedure rules and the oft debt collection guidance.

Quote:

If they agreed to freeze charges and interest as soon as you phoned them up and said you were in difficulties, everyone would be phoning them up tomorrow.

i agree, there should be a process in place. *IF* someone is in genuine difficulty then they should complete a personal budget and make a reasonable offer. If the debtor cannot afford to pay a reasonable amount then certainly a charging order might be the best option for all parties. I don't think that it is fair for the creditor for a charge NOT to be made final IF a debtor has no reaslistic prospect of paying the debt back. I do think that the creditor needs to act in a reasonable and sympathetic way throughout the process though.

freakyleaky · 20th May 2008, 19:28

Quote:

Originally Posted by debt monkey

The bank have to go to court 3 times before it ends in a Charging Order, for CCJ, for interim C/O and for final C/O. It is an expensive processs for them.

It makes you wonder how they manage to scrape a profit each year.

angel_1 · 20th May 2008, 19:57

hiya i totally agree with sequenci,
im finding that creditors will only do the minimum to be helpful, being reasonable, well i will let you know the outcome of my complaint with my mortgage co, and the arrears ive been trying to negociate with them
dont want to say more maybe my mortgage company is scanning these and i dont want to out the ace card i will be planning on playing .

keep happy maz

FunkyFox · 20th May 2008, 20:02

Quote:

Originally Posted by debt monkey

Claiming that the banks are abusing this is ridiculous. If the debtor had not defaulted on repayment, the bank would never of obtained a Charging Order.

The bank have to go to court 3 times before it ends in a Charging Order, for CCJ, for interim C/O and for final C/O. It is an expensive processs for them.

Isn't that why they charge a higher interest rate on unsecured lending, because it is by definition, more risky! And there was me thinking that they got awarded costs for their trouble

If you think that lenders and DCA's are not using this legislation as soon as they possibly can then you are the one with your head in the sand. I have had dealings with many such organisations over the past 12 months and I can assure you that in almost every case a charging order was being mentioned as soon as the first payment was missed. You can argue all day long that if I wasn't in debt and hadn't missed payments then this wouldn't be happening but I took out unsecured borrowing, not secured and that remains the point.

I would also like to point out that, in both cases where charging orders were sought against me, the original order was made for £1 per month as I had £500 more going out than coming in. In both cases the claimants went back for a redetermination hearing for payment forthwith so that they could apply for the interim order. In both cases it was impossible to defend myself against this so I was forced to default on the CCJ.

People do not know this can happen and when the number of charging orders being sought is going up and up then discussion needs to take place to ensure that the legislation is used fairly and people are told that when they take out unsecured borrowing this could be the outcome.

In the meantime I would urge everyone who finds themselves in serious financial problems to use these forums to educate yourself, reclaim the power to act yourself and CCA all of your creditors. Then give them a taste of their own medicine. Whats good for the goose is good for the gander.

Please sign the petition and spread the word.

pauli · 28th May 2008, 12:58

Quote:

Originally Posted by FunkyFox

People do not know this can happen and when the number of charging orders being sought is going up and up then discussion needs to take place to ensure that the legislation is used fairly and people are told that when they take out unsecured borrowing this could be the outcome.

.

In their response to draft proposals for the 2006 CCA the OFT submitted that " lenders should not be permitted to seek a charging order on an unsecured loan unless the possibility of this were highlighted clearly in the credit agreement and pre-contractual information”

Right now I feel this is one of the most important issues we could address ourselves to. The petition is a good starting point. But what else?

In my own experience it is very difficult to defend a charging order post judgement. Particularly with the new enforcement provisions and the relative ease with which claimants are getting "forthwith" orders.

I am in the same situation as many other people here. Having agreed and maintained a reduced payment programme for 2-3 years I suddenly find myself being confronted with legal action on the part of a creditor. Quite blatently with the intention of obtaining a Charging Order on my home.

The claim is in respect of both credit and charge cards. The regulated agreements I am defending on the basis of non compliant agreements. The charge card agreement is obviously unregulated.

In my defence I have used the Unfair Relationships Test provision of the 2006 Act to request that the claimant be put to strict proof that omission of a specific term outlining the consequences of default in terms of the risk to my home is not "unfair". There is no definition of unfairness in the Act so their response should be interesting.

I have also referrred to the draft proosals in the new Unfair Terms in Consumer Protection from Unfair Trading Regulations 2007. If enacted these Regulations will impose a blanket ban on unfair commercial practices, which amongst other things are defined as misleading actions or omissions that might:

·cause or are likely to cause the typical consumer to take a transactional decision he would not otherwise have taken

I believe there is a basis for bulding a case here. I would be delighted to get some input or help in further developing the argument before what is likely to be a multi track hearing in view of the collective sum involved.

If someone feels this should be a separate thread thats fine. Just lets get the ball rolling!

phatram · 3rd June 2008, 13:18

archieL · 8th June 2008, 08:41

Signed up x2

MrShed · 8th June 2008, 08:49

Well I'm not going to go into details, as they have been mentioned already. But I am going to say that I agree wholly with chesterexpress and debt monkey - to say the situation is being exagerrated here I think is something of an understatement, and the very base point remains - had the payments not been defaulted on, the charging order would not be possible.

Not signed.

FunkyFox · 8th June 2008, 10:01

Quote:

Originally Posted by MrShed

Well I'm not going to go into details, as they have been mentioned already. But I am going to say that I agree wholly with chesterexpress and debt monkey - to say the situation is being exagerrated here I think is something of an understatement, and the very base point remains - had the payments not been defaulted on, the charging order would not be possible.

Not signed.

Well Mr Shed you are of course entitled to your opinion and what you say is in fact absolutely true. If me or anyone else had not defaulted on their payments then the charging order would not be possible. So thanks for that

.

If you read the OP or the petition text you will see that I am not against the use of charging orders as a form of enforcement in SOME situations, I just want their use to proportionate and controlled. It seems that HMCS is starting to take this view too Have a look at who are members of the CSA

I also strongly believe that, (this was included in the OP and the petition text too) that people should be notified when they borrow money that this could be the outcome. It seems the OFT agrees on this too. To quote from pauli's post earlier...

Quote:

In their response to draft proposals for the 2006 CCA the OFT submitted that " lenders should not be permitted to seek a charging order on an unsecured loan unless the possibility of this were highlighted clearly in the credit agreement and pre-contractual information”

How much of todays 'unsecured' lending would have been taken out if people had known that it could be secured against their property if they were unable to pay? Very little I would think.

I obviously know nothing of your situation but I'm afraid that for you to say that the situation is being exagerated suggests to me you are somewhat ignorant of the reality.

I was in court (my County Court is one of the smallest in the UK) on Wednesday and there were over 27 charging order final hearings scheduled for that afternoon out of 29 hearings in total. The clerk acknowldeged that the rise in these hearings had been massive even over the last few months alone.

So whilst I respect your (and others) rights to your opinions, I think to say that, the problem with what is in many peoples opinions an unjust and overused (possibly now abused) method of enforcement, is being exagerated is simply not true.

I don't believe that anyone (apart from fraudsters) sets out borrowing money with the intention of not paying it back and in full. But anyones situation can change and then you find yourself unable to pay. It happened to me and it could happen to you too.

I took out unsecured borrowing and paid a higher interest rate than the secured loan ( I could have taken) because the lender obviously is taking a greater risk. Ask your self, honestly, do you think that lender then securing that debt against a property is fair and justified?

FF

MrShed · 8th June 2008, 10:16

As you rightly say, we are all entitled to our opinion - and I respect yours too.

My issue(and it has often seen me get flamed on this forum, rightly or wrongly), is that I disagree with the general consensus on this forum(not saying you are one of them, by any means) that the banks/DCAs/etc are always the big evil bullies. There are clearly examples where they have performed wrongly - for example, misselling, and penalty charges. However, for whatever reason people here seem to think they are wrong for chasing payment when the person involved hits a financial downturn and is found to be having difficulty in paying - I fundamentally disagree with this position. It was the lendees role to ensure that there were contingency plans in place prior to signing up to a credit agreement.

I think that this forum concentrates far too much on "beating" the "bullies" of the banks and other creditors, and nowhere near enough on educating people to be financially responsible enough to not get into these situations in the first place.

By the way, I am absolutely NOT saying that there arent genuine reasons for people having got into this position - not at all. However, a lot, if not the majority, are the basic problem we have had in this country for the last 10 years, that people are determined to live beyond their means.

Anyway, I am going off topic. IMO charging orders are a valid method of enforcement, for ANY debt. I think it needs to be borne in mind just how often charging orders result in the sale of a property - it is almost never. Realisitcally, these just sit on the property for a long time, sometimes years, until the property is sold anyway.

As for being notified in advance that this is a method of enforcement, you are opening a can of worms. Do you then need to state that they can send baliffs round? Do they need to state that you can be taken to court? Do they need to state that a garnishee order can be made? In my opinion(and this is going to sound incredibly judgmental, so I apologise), if you are not educated enough when signing up for credit to realise that the repayment can be enforced, then you should not be allowed to sign up for credit. Past this point, I personally don't see what odds it makes what method of enforcement they use. At least it is better than a WoE, as WoE results in the sale of your goods for way below the market value. At least a CO there are no such issues.

I will concede the point that perhaps I am not aware of the scale of the problem.

FunkyFox · 9th June 2008, 10:38

I don't want this thread to become a two person debate but I feel it is important to address the points you raise.

I find it fascinating that you consider it ok to berate the Banks regarding penalty charges but not about their debt recovery practices. If you apply your logic to penalty charges, then if people didn't go overdrawn or miss payments then there would be no charges and nothing to claim back. You can't take the moral high ground in one respect and then dismiss it in another.

With regard to Banks and DCA's (in particular) being big evil bullies then I'm afraid I think you are somewhat out of touch too. I'm not sure what your experience of dealing with the likes of these companies is but I think you would be hard pushed to find anyone (here or otherwise) that had been treated with respect and understanding when being in the unfortunate position of being contacted by a DCA . Do you think that forums like this would exist if people were being treated fairly? Don't forget many of these companies operate at the very least, outside of the OFT good practice guidlines and at worst....? All people are doing is trying to fight back against unfair treatment and empower themselves through education.

Regarding your final point. I am not particuarly well educated but consider myself bright enough. As far as I recall when I was at school, the 1974 CCA was not covered as part of the ciriculumn. If you ask people what happens if you dont pay your loans or credit cards, most people I'm positive would mention court and balifs. None would be aware of the issue of charging orders. If you ask the same people what happens when you don't pay a secured loan then again i would suggest that most people would know that you can lose your home becasue of it, the reason, because whenever you take out secured borrowing this point is rammed down your throat.

As to the point should people need to be told about this, isnt it their responsibiltiy to find out? Well hell yes, we should be told (remember the OFT agrees) consumer legislation is there to protect and people can not be expected to be aware of every part of legislation relating to a loan or credit card they take out. The various powers have a duty to warn and inform. If these warnings appeared on unsecured debt then the amount of new unsecured borrowing would, I am sure, drop massively overnight. I wonder what would happen to the banks then?

Finally please also consider this. A secured loan is only available to homeowners, an unsecured loan to anyone meeting the criteria. Both may pay the same interest rate but the penalty to the homeowner of defaulting on unsecured borrowing is far far higher than that of the person without a financial interest in a property. This is completely unfair.

MrShed · 9th June 2008, 10:48

I think to be fair, you miss my main underlying point, which is that should there be more concentration on education of debt/financial management, we could prevent the need to deal with these issues on a "case by case" basis.

The key issue I think I raised that you fail to address is that fact that unless the debt is VERY sizable, charging orders are fairly toothless anyway as it is extremely rare that it will result in the potential loss of your home.

MrShed · 9th June 2008, 10:51

By the way, I think I am right to have two different moral positions in this case, as the moral background is completely different. Misselling and/or penalty charges are clearly wrong for the bank to perform, as the situation is by definition illegal, and the customer has had no alternative in these situations.

Chasing a bad debt is a completely different kettle of fish, as it is due to the CUSTOMER failing to make payments. It is quite clearly not the same as a missold insurance.

debt monkey · 9th June 2008, 12:55

Quote:

Originally Posted by FunkyFox

How much of todays 'unsecured' lending would have been taken out if people had known that it could be secured against their property if they were unable to pay? Very little I would think.

99% of it I think.

MrShed · 9th June 2008, 13:01

Quote:

Originally Posted by debt monkey

99% of it I think.

Agreed.

sequenci · 9th June 2008, 13:40

Quote:

Originally Posted by MrShed

Agreed.

And me too.

For the record I think a Charging Order is a VERY fair method of securing a debt for a creditor. Imagine if a debtor has a £20k debt and had little or no surplus income, it wouldn't be reasonable for them to accept a small token payment with no realistic prospect of the debt ever being repaid.

On the other hand the creditors need to start acting in a reasonable way by adhering to things such as the banking code and the oft guidelines on debt collection and only use court action as a last resort and when it is 'just' to do so.

It's a double edged sword.

To be honest many people seem really scared about these orders, they have positives too.

a) a creditor will usually stop chasing and making loads of calls once they have the protection of a CO
b) it is possible to have interest stopped on a CO
c) it is possible to make it a condition of a CO that an order for sale is not possible

+ many more I'm sure

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