voluntary Charge on House

[witchita]

Hello

I’ve only just registered with the forum but I have been reading threads on here for a while. Debt problems are so stressful and the support for people in this situation from this forum is just fantastic. I’m now hoping that you can give me some advice and that this is the right forum to put this.

Twelve months ago I arranged a DMP with CCCS which involved several creditors. I was not in arrears with any of the creditors at the time and they have been paid regularly each month through CCCS.

About six weeks ago one of my debts was sold and I started to receive phone calls and letters from 1st Credit. CCCS told me not to worry about these, they may just be idle threats and they would continue to make payments to them. However today I have received a statutory demand. I have previously discussed with CCCS about voluntarily offering a charge on my house as I do not dispute the amount, have every intention of paying my debts and I hope to speak to them about this tomorrow.

However I have one big concern. After many years of struggling financially my house is in a very bad state and the budget that I currently live on does not allow for me to pay for, what are now some quite urgent house repairs. Because of this I have recently decided to do pension release with a pension from a previous employer to raise the money to carry out the repairs. This is nearly completed now and I hope to be receiving the money within the next few weeks. As it will be paid directly into my bank account I’m worried that I will have to supply bank statements that would obviously show the money is or had been in my account. I assume from a court’s point of view anything that is deemed as ‘savings’ would be expected to go towards the debt.

Has anyone on here ever had a similar situation, been through a voluntary charge and can tell me about the procedure or have any knowledge of this. I would appreciate any advice.

I was thinking that it was too late to request a CCA but I gather from other threads that I can still do this.

Thanks in advance

[PGH7447]

1st credit love throwing these SD's around, you need to get this set aside, ASP

You can cca anytime

someone with more knowledge on SD's will come along son and show you the way to do this

good luck

[babybear39]

Dito...

[palomino]

You have been caught up in appears to a worrying trend where DCAs are issuing Statutory Demands in order to force you to pay off your debt. The usual procedure of obtaining a CCJ costs them money while an SD doesn't but, since the purpose of an SD is to make you bankrupt, it is a much more serious procedure.

So, the most important thing to be dealt with is the Statutory Demand. If this goes through you will be bankrupt. So you need to apply to have it set aside.

The forms you need are 6.4 and 6.5 which are available here -England and Wales Forms

Send these by the due date to the court specified in Part A on page 3 of the SD. The fact that you have been making regular payments through CCCS - and are still doing so - is excellent grounds for having the SD set aside.

As regards the payment from your pension release you should open a separate bank account - even a building society savings account will do - and have the pension paid into that. Don't use the same bank as your current account.
Ordinary savings accounts are fine - you don't need any credit history to open one (just a proof of ID), and if you need cheques they will issue one for you. Otherwise you can make withdrawals in cash.

If you have any more questions please come back here.

[babybear39]

Palomino you're a star

[palomino]

err <blush> thank you!
All part of the service.

[witchita]

Thank you for your advice Palomino. I'm a bit confused about the order in which things are done as I thought that following the SD the next step would be a CCJ and they would only take further action if I defaulted on those payments.

If I voluntarily offered a charge on my house would this stop the procedure? I'm quite prepared to do this as bankrupcy will loose me my house, job, everything.

I've also just received notifcation this morning that my pension money is due to be transferred into my current bank account next Wednesday. I can open a savings account with another bank on Monday but I'm not sure that I can stop the BACS payment into the current account at such short notice. I could of course transfer it into anoher account straight away but if for instance I had to produce my last three bank statements then it would be on them. Even if the money was in another bank would I not have to declare it to the court at some point?

Thanks again.

[palomino]

Originally Posted by witchita

Thank you for your advice Palomino. I'm a bit confused about the order in which things are done as I thought that following the SD the next step would be a CCJ and they would only take further action if I defaulted on those payments.

No. An SD is going straight for the jugular. A CCJ is not an intrinsic part of the SD process - although a CCJ may be in place. An SD is the end of the chain and, if granted, makes you bankrupt immediately. This is why it is so important to get the set aside in motion.

Originally Posted by witchita

If I voluntarily offered a charge on my house would this stop the procedure? I'm quite prepared to do this as bankrupcy will loose me my house, job, everything.

Almost certainly not as the SD process is particularly single-minded.
I would very strongly advocate NOT offering a charge on your house. It is offering a hostage to fortune - you don't have any - and you could well lose your home and a very large amount of money as well. Try not to even think about doing this - and if you do then you need to get serious advice from the CAB or the National Debtline or both.

Originally Posted by witchita

I've also just received notifcation this morning that my pension money is due to be transferred into my current bank account next Wednesday. I can open a savings account with another bank on Monday but I'm not sure that I can stop the BACS payment into the current account at such short notice. I could of course transfer it into anoher account straight away but if for instance I had to produce my last three bank statements then it would be on them.

It's probably too late to stop the BACS payment due next Wednesday but I would get the money out of that account asap.
To open a basic savings account requires only proof of ID. There is nothing required about previous credit or banking history at all because basic accounts simply cannot go into the red.
I would suggest popping in to your local building society branch to just ask some questions and collect some brochures.

Originally Posted by witchita

Even if the money was in another bank would I not have to declare it to the court at some point?

If anything ever went to court then yes. But that's not likely to happen at the moment (provided you apply for the set aside).
The main purpose of putting your pension into another account is to prevent your bank 'diverting' it to other purposes - it is effectively 'ringfenced' so you get to use it for what you want.

[witchita]

Palomino your advice is invaluable. I have some more questions.

Can I just ask what exactly does set aside mean? If it's granted does it just clear the way for more negotiations with 1st Credit or are they then obliged to accept the monthly amount that they currently get from CCCS?

Do I have to pay to set aside?

Do I still need to request the CCA or has it gone too far for that now?

Quote:
Originally Posted by witchita

If I voluntarily offered a charge on my house would this stop the procedure? I'm quite prepared to do this as bankrupcy will loose me my house, job, everything.


Almost certainly not as the SD process is particularly single-minded.
I would very strongly advocate NOT offering a charge on your house. It is offering a hostage to fortune - you don't have any - and you could well lose your home and a very large amount of money as well. Try not to even think about doing this - and if you do then you need to get serious advice from the CAB or the National Debtline or both.

CCCS suggested I could do this if things got to this stage.

Please could you explain a bit more. I thought a voluntary charge meant that you continued to make normal payments and settled any balance if/when you moved and sold your house. If a voluntary charge is in place can they still enforse a sale on the property?

Would it be better to transfer the pension money to an account of a family member or friend so that it's not in my name? If I did that would then would I be able to claim that I have no savings without committing fraud?

Should I tell CCCS about my pension money? I haven't as yet because it was going to be used on my house so wouldn't affect the amount I have available each month to pay creditors.

There would actually be enough money to pay the debt completely. It would of course mean that I wouldn't have it to repair my property but at least I'd have a house.

I feel like I'm folding under all the pressure

[forgottenone]

Please could you explain a bit more. I thought a voluntary charge meant that you continued to make normal payments and settled any balance if/when you moved and sold your house.

As far as I know, it means if you miss a payment ... and a charging order *unless I got this wrong* means the creditor effectively owns your property. So, if you miss payments ... then ...

Would it be better to transfer the pension money to an account of a family member or friend so that it's not in my name? I

Up to you what you would do here. But, it's never wise to transfer money into anyone elses accounts friends, family members or otherwise. It would mean they had control of your money full stop. The reasons for that should be clear.

[palomino]

witchita, I won't quote your whole message as it's getting a bit long!

1. Set aside means that the SD is stopped.
2. It doesn't have any specific implications as to what happens next. In your case I would politely but firmly point out to 1st Credit that you have an arrangement in place with CCCS and that you have no plans to change that.
3. I'm not aware of any fee to have the SD set aside. One thing not mentioned elsewhere is that you have to take the forms to the Court in person because you have to swear an affidavit there (hand on bible etc.). This isn't frightening at all and the court staff will probably be quite helpful and friendly.
4. You can still request the credit agreement and a current statement of account - there is no restriction on when you can do this.
5. CCCS will certainly suggest these sort of things. They are a debt management organisation not an advice organisation. Their sole priority is to ensure creditors are paid and any advice they give is designed to ensure that happens. In this respect they not acting in your best interests, in fact they're not acting in your interests at all.
6. Don't give your pension money to anyone else.
7. You can 'overlook' mentioning the pension money to CCCS. This isn't income its a tax-free allowance.
Later, when you actually start receiving the annuity then you should declare it (but be prepared for them to require an increase in your contributions).
8. A voluntary charge is something I would resist as much as possible. For two reasons -
(a) although there are some minor distinctions a voluntary charge is similar to a charging order. You lose control of your home and it can cost a disproportionate amount of money to get it back. Even when your home is sold the original value of the voluntary charge will have rocketed upwards because of charges and interest - and you can virtually nothing about it.
(b) when you contracted for the loan or credit card it was done on the basis that the debt would be unsecured. For this you paid a much higher rate of interest. Think what mortgage (a form of secured loan) rates are compared with credit card interest rates and you will see what I mean.
In effect the lender is trying to get a secured loan and a very high interest rate.
You can of course continue to make payments when you have signed voluntary charge. But if you do so then why was it necessary to sign the voluntary charge? In your case I can see no advantage to committing to a voluntary charge, and as far as I can see through reading your posts it is only CCCS that is proposing this.
I'm not sure whether a sale of your property can be forced with a voluntary charge.

So, your action points are -
1. Apply to have the Statutory Demand set aside.
2. Make a request for your credit agreement and current statement of account under the provisions of the Consumer Credit Act 1974 (CCA) and see what turns up.
3. Continue making your normal monthly payments.
4. Rest easy and don't panic - none of this even remotely life-threatening .

[veryweary]

Wichita,
Take Palomina's excellent advice.

Threats from 1stCred of court action to get a charge order on our house and threats of bankruptcy brought me to this forum. The great advice/support has been amazing.

Also on DMP with CCCS, normally very helpful , but in this type of situation their advice is always biased towards the interests of the creditor not you. If 1stCred bought your account they probably only paid about £100 per £1000, maybe less if they bought a large batch of debts at the one time.

1stCred told me they go for charge orders as it's the only way they can try to add interest and charges to a debt. With me they wanted a forthwith court judgement so they could immediately apply for a charge order. Following advice ( thanks Babybear and Sonumi) , requested CCA, still waiting for it months later. Now got letter from 1stCred admitting they know they can't enforce debt without CCA.

I wouldn't hand them my house a plate, if they want it they can fight for it all the way

[Hopeful1]

Palomina has given excellent advice.

I really have to say don't give these lot anything!! Can i ask what sort of account it is ie loan or credit card?

Palomina is obviously more knowledgeable in this area, but i would have thought that once you have acknowledged the SD it would certainly be worth sending a CCA request. Without the agreement their threats would be worth nothing.

Don't allow anyone to exploit you. You have been making payments and have not tried to avoid your debt, so it is unreasonable / greedy to do what they are doing.

Best wishes

[palomino]

Gee guys, you make me blush! Just trying to help.

witchita, veryweary and hopeful1 have made good points about the inhumanity of the DCAs. They are primarily and solely interested in money - yours. They are about as civilised as a hungry great white shark would be if you tried to shake hands with one.

[witchita]

Thanks for your input folks. I was very stress