Can You be FORCED to sell your home.

[Isiris]

I have been asked the question by a friend of mine and said I would post on here. He currently is claiming his charges back from A bank. They are about £4k. He currently has a loan with the bank at £450 a month.

He has been to see a IVA consultant who IMVHO is trying to scare him into a IVA. He has been told that a court can force him to sell his house.

I am under the impression that the court, if a CCJ was obtained, would order him to pay an amount he could afford. As such, as long as he maintained payments, there was nothing that could force him to sell the home.

If anyone could advise, I will pass it on. Hes panicking a bit as he has alot to sort out

[powelll]

If he defaulted on a CCJ ie didn't pay what was ordered ( bearing in mind the court may decide that a 'forthwith ' CCJ is reasonable so whole amount payable immediately ) then the creditor can apply for further enforcement action, this could include applying for something called a charging order which would secure the judgement debt against the property.

A CO sits there until the property is sold and is then paid off like the mortgage. However, the creditor DOES NOT have the right of repossession that a mortgage lender does.

There would always be a hearing before a final CO is made. Once a CO is obtained IN THEORY the creditor could apply for an order for sale via the court but it is VVV rare that a judge would agree to this for what was originally unsecured debt.

Link below useful also get then to call National Debtline 0808 808 4000 for free confidential impartial advice before committing to IVA

National Debtline England & Wales | Debt Advice | Factsheet 15 Charging Orders In The County Court

[Isiris]

WOW

Thanks for that speedy reply

I am under the impression that the Judge would only award a forthwith order if the defendant didnt aid the hearing IE never replied to any forms etc etc.

I have told him that if the bank do take him to court then to cooperate every step of the way

[sequenci]

Originally Posted by Isiris

I am under the impression that the Judge would only award a forthwith order if the defendant didnt aid the hearing IE never replied to any forms etc etc.

they can order one if your payment is unreasonable or if you have loads of equity.

charging orders are not all THAT bad, especially on regulated agreements. they usually mean that interest is stopped and the creditors are off your back, no more constant calls/letters.

[powelll]

The court has discretion to give forthwith CCJ whatever the circumstances to be honest. I'm a debt adviser so quite familiar with this unfortunately. For debt below £50k court staff will usually determine the rate of payment.

You can apply free of charge for 'redetermination' if you get a CCJ you can't pay - this free within 14 days of the CCJ being issued but doesn't guarantee an affordable outcome...

[harrythehawk]

Sorry to jump in but does the amount of equity (if any) in your property have any bearing on the decision ?

[powelll]

Originally Posted by harrythehawk

Sorry to jump in but does the amount of equity (if any) in your property have any bearing on the decision ?

You could argue that if there is no equity or negative equity there's no point in a CO being made. Conversely if there is loads of equity compared to the amount of a CO you could also argue that it's unreasonable. But no, it doesn't have to be considered it's just an argument you can make.

[Gingerheid]

Originally Posted by Isiris

I have told him that if the bank do take him to court then to cooperate every step of the way

This is the advise I'd give. I've found courts to be very reasonable with people that are very reasonable with them.

I would add that the reasonableness should extend outwith the proceedings, for example to making the payments that he can reasonable afford voluntarily before any order is made.

Good intentions put into practice look so much better than good intentions on paper.

I would say that yes, it's technically possible a judge could allow the sale of a property on a charge for a debt. But if you appeared at the hearings you'd have to *really* **** him off before he'd do it.

I believe what would happen in practice here is that the bank would pursue the charge to secure their debt very aggressively, and most likely get it. However if they were receiving payments I don't think they would go for possession, because I think they would realise they probably wouldn't get it.

[martin g]

I may not be reading your friend's problem correctly. The bank owes him £4,000 and he has loan, is this under a credit agreement or is he paying off an overdraft?
If he is keeping to the terms of his credit agreement the bank cannot default him so why should a court get involved?
If it's an overdraft the £4,000, when recovered, should make a big hole in the debt and the penalty charges, which would be part cause of the overdraft would go a long way as part of a defence.
Has your friend been bullied into doing something rash by the bank and the debt management co. who are both have their own best interests- making money

[powelll]

Originally Posted by Gingerheid

I don't think they would go for possession, because I think they would realise they probably wouldn't get it.

They can't go for possession on a CO anyway; only a mortgage or secured loan lender could do this once 8 weeks arrears had built up. They can ONLY apply for an Order for Sale which is very different.