Charging Orders Petition - Sign it NOW!

[FunkyFox]

Control the use and abuse of Charging Orders

 

A petition to control the rapid increase in the use of charging orders by lenders to secure borrowers debts against the equity in their house has been started on the No.10 website.

 

You can sign the petition by clicking here and I would ask that you tell as many people as you can to sign the petition too. The petition also suggests that the lenders should make it clear to borrowers that a charging order is a possble outcome should they be unable to meet their repayments.

 

It’s important that the banks abuse of this means of recovering unsecured debt is controled and people are aware of the implications of defaulting on an unsecured debt. Sign the petition now.

[Chesterexpress]

It’s important that the banks abuse of this means of recovering unsecured debt is controled and people are aware of the implications of defaulting on an unsecured debt.

 

Why is it an abuse of recovering monies owed? In order to secure a charging order the bank has to follow due process etc. And it is almost always a last resort after all attempts have failed to secure repayment of the debt by the borrower.

[BelleBoo]

You are of course entitled to your opinion.

 

If you actually read the petition text you will see that I do not have a problem with charging orders, more so that obtaining them is becomign standard practice whenever creditors get a sniff of equity in someones home.

 

Furthermore, in my expereince far from being a last resort DCA's and Banks etc are going for a charging order as soon as they can and are declaring their intention to do so almost as soon as they can.

 

Finally, again if you read the text of the petition you will see that one of the main changes I would like to see is lenders advising borrowers that this may be the outcome in the event they are unable to keep up with payments on their unsecured debt in much the same way they do with secured borrowing. Hardly unreasonable.

[FunkyFox]

^^My wife has been using the PC and I made the above post using her login without knowing....

[sequenci]

A double-edged sword this one.

 

I appreciate that on occasion a Charging Order is an ideal method of enforcement, however, as stated the creditors are trying ot get these as a first resort. I must also state that the forthcoming Tribunals, Courts and Enforcement Act will make it easier for a creditor to get their charge since the need for a CCJ default will be removed.

[Nightmare4banks]

Hi all!

 

Just signed.

 

Also,I firmly believe that if the creditor has secured the monies borrowed,in return the interest rate of the original debt should be revised and reduced to reflect this.

 

Perhaps if this sort of rule existed,creditors would not be in such a rush to go for charging orders especially if the borrower was up to date with the repayments.

 

What do you think folks?

[sequenci]

Also,I firmly believe that if the creditor has secured the monies borrowed,in return the interest rate of the original debt should be revised and reduced to reflect this.

there are plenty of legal arguments that can be used to prevent (contractual) interest being added to charging orders at all. have a look:

 

Interest on Charging Orders

 

Statutory Interest

 

Statutory interest would continue to run whether or not the order specifies it. The N86/87 forms allow ‘any interest’ to be included, this means statutory interest.

 

This doesn’t apply to Consumer Credit Act regulated debts or Charging Orders of debts below £5,000 unless they have been transferred to the High Court for a High Court Charging Order. (The County Court (Interest on Judgment Debts) Order 1991)

 

The judgment would carry statutory interest if it was made on or after July 1st 1991 and the judgment is for at least £5,000.

 

If a judgment has a payment ordered to be made on a specified date or by instalments, no interest will be payable either until that date or, on the amount of any instalment until it falls due.

 

If a judgement carries statutory interest, so will the Charging Order, even if not mentioned within the order itself. [Ezekiel v Orakpo]. S3(4) COA 1979 states that “A Charging Order shall have the like effect and be enforceable in the same courts and in the same manner as an equitable charge”

 

Contractual Interest

 

Many creditors are trying to argue that Charging Orders carry contractual interest after judgment even if the judgment itself doesn’t. There are plenty of arguments against this.

 

• Charging orders and their effect are determined by the Charging Order Act 1979

• Section 1 COA says that a Charging Order is made ‘for the purposes of enforcing that judgment or order’ and that the charge is for ‘securing the payment of any money due or to become due under a judgment or order’. Although enforcement of a Charging Order is not execution of a judgment, s1 means that the order and the judgment must be coextensive. Therefore no money can be recovered in excess of what is due or to become due under the judgment.

• Section 3(4) opens with the words ‘Subject to the provisions of this ACT…’ and so unless the interest is due under the judgment or order under the Interest on County Court Judgements Order, it cannot be included in the Charging Order

• The amount of interest depends on the amount of interest due on the judgment. Most CCA regulated agreement judgements do not have an interest post-judgment clause.

• Even if there is an interest post-judgement clause on a CCA regulated agreement the lender still cannot enforce these rights by levying contractual interest – unless that rate forms part of the judgment, the lender would have to bring seperated action for the interest. (Supreme Court Practice 1999 Ed. Para 42/1/24 and Re European Central Railway 1877 4 Ch.D.33

• The claimant may try to use s3(4) COA to claim that an equitable charge attracts interest on the principle sum. However, the rate of interest payable under an equitable charge depends on its terms. In the case of a CO, the judgment debt would be in essence the princinple sum. The rate payable on this sum is prescribed by statute or set out in the judgment. S3(4) wouldn’t justify applying a different rate.

[Zimmie]

I have a charging order against my property, it all came about when I was severely affected by mental health issues. At the time I was not able to fully digest the paperwork and understand the figures. I attended court, and the judge was a total bitch, I said I did not think the figures were right, she replied 'I'm quite sure they can work them out more accurately than you', and granted the C.O. She totally ignored everything I had stated to defend against the C.O.

I've been trying to get a breakdown of the amount but the OC won't give me this. My filing was a bit chaotic at the time, but I'm fairly sure that the C.O. amount includes PPI and interest on it. PPI which I'm sure was missold, but that's something else.

I think its wrong that a C.O. should include PPI, as after all, its something you cannot use but you still have to pay for it, possibly with your home!

[Nightmare4banks]

Hi all!

 

Sequenci,

 

Your post is very interesting which I will read through when I can sit down for a few minutes and digest!

 

Please note:

 

1.Anyway,I was mainly referring to the interest charged on the original unsecured debt.I say this because whenever you apply for loan/credit card,there is no mention that in the LARGE PRINT BLURB that if the borrower defaults and he/she owns a home the debt could potentially become secured on the property.

 

2.All secured loans are cheaper than unsecured for folks that can obtain them so if the creditor wants a Charging Order the original agreement should be revised or there be certain court guidlines to clearly reflect this such that the applied interest rate is less.If it is a large difference,it could potentially wipe out the debt.

 

ZIMMIE,regarding your post:

 

1.If you have a case for missold PPI sue the creditor for it.If it is less than 5k pounds you can do this through the Small Claims.

 

2.It it is more than 5k pounds,be careful about costs and find a solicitor that will do the work for you on a no win no fee basis.

 

3.You need to start by sending the creditor a DSAR - Data Subject Access Request under the Data Protection Act 1998 with a postal order for 10 pounds and proof id i.e. passport/driving licence and proof of residence i.e. utility bill.The creditor has 40 days to respond - template letter can be found in the library on this site.

 

4.Make sure that you send everything by recorded delivery post and do not speak to anyone from the creditor's office on the phone.Keep it strictly in writing

 

There are more tips elsewhere on the site.Anyway,we are all here to help you.

 

So if you have any questions,just ask.

[ziggy04]

I have a charging order against my property, it all came about when I was severely affected by mental health issues. At the time I was not able to fully digest the paperwork and understand the figures. I attended court, and the judge was a total bitch, I said I did not think the figures were right, she replied 'I'm quite sure they can work them out more accurately than you', and granted the C.O. She totally ignored everything I had stated to defend against the C.O.

I've been trying to get a breakdown of the amount but the OC won't give me this. My filing was a bit chaotic at the time, but I'm fairly sure that the C.O. amount includes PPI and interest on it. PPI which I'm sure was missold, but that's something else.

I think its wrong that a C.O. should include PPI, as after all, its something you cannot use but you still have to pay for it, possibly with your home!

 

hello, Zimmie

i'm nearly in the same boat as you, i expect to have a charging order made final on my property,i like you suffer from health issues and severe depression, i know exactly how you feel,i think charging orders are granted quite easily,from what iv'e read on the forums & elsewhere,judges

are not interested in your objections,sorry to hear you had such an obnoxious judge,i've had a lot of help and advice from members & moderators on the forum on my thread,i'm sure the order will be granted as i have equity in the property,i see you have cats ! well they say stroking your cats or dogs is good for reducing stress,well i have dogs & cats & it hasn't worked for me, anyway hope you a feeling better

Ziggy aka diane

i aggree totally witth funkyfox regarding charging orders

Edited May 17, 2008 by ziggy04
spelling

[angel_1]

hiya all and especially funky fox.

thanks for the e petition, ive had a good look and signed quite a few, very interesting, will pass the site around my friends to look at too

 

have a fun sunday ciao for now MAZ

[havinastella]

signed

 

Jogs

[suzieblooz]

Signed

And it is almost always a last resort after all attempts have failed to secure repayment of the debt by the borrower.

 

Chesterexpress, I've got a charging order on my house from a company that I have paid on time every month through a DMP for the last 21 months, never missed a payment, yet they still went for this option. Its hardly a last resort for some of these companies.

[Chesterexpress]

Suzie, but you are on a DMP, therefore I would imagine that you were in arrears at some time on this payment? However even if you hadn't been in arrears the fact that you are now paying via a DMP (usually paying very reduced monthly payments) is sufficient in itself to go for a charging order to protect themselves.

[suzieblooz]

The arrears was only on the first payment, I communicated with them from the off, and the repayment amonut is actually about 3/4 of the original amount, so not a very reduced monthly payment. It just annoys me that a £799 sofa from Land of Leather is now sitting at a debt of £2274ish after 21 months of payments (the original amount has been well cleared). They were the only ones to do this.

I'm not getting at you, this just rankles me, if I was a won't pay I wouldn't have got in touch with them in the first place.

Oh and I have SAR'd them, they have 2 more days till the 40 day deadline and I've not heard a thing out of them!

[remus]

The arrears was only on the first payment, I communicated with them from the off, and the repayment amonut is actually about 3/4 of the original amount, so not a very reduced monthly payment. It just annoys me that a £799 sofa from Land of Leather is now sitting at a debt of £2274ish after 21 months of payments (the original amount has been well cleared). They were the only ones to do this.

I'm not getting at you, this just rankles me, if I was a won't pay I wouldn't have got in touch with them in the first place.

Oh and I have S.A.R - (Subject Access Request)'d them, they have 2 more days till the 40 day deadline and I've not heard a thing out of them!

Good luck with your sar, hopefully it will show all the charges they have wacked on.

I have a dca going for a ccj and the debt has increased by £1400, beggers belief when you know they only paid pence in the pound for it:-x

Duly signed:)

[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.

[sequenci]

Claiming that the banks are abusing this is ridiculous.

i disagree, there is a great deal of abuse going on. I must stress that the majority of the abuse is usually from the DCAs rather than the banks, however.

If the debtor had not defaulted on repayment, the bank would never of obtained a Charging Order.

I think must people understand this.

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.

Actually, it's twice at a maximum. The interim is a paper exercise and more often than not so is the prelimary CCJ claim.

 

So would you say that the banks are not flouting The Banking Code? The OFT Guidance? The Overriding objective as per the Civil Procedure Rules?

[debt monkey]

Nothing in the banking code about charging orders, how are they flouting it?

[sequenci]

Nothing in the banking code about charging orders, how are they flouting it?

 

Not about Charging Orders specifically, more to do with helping debtors by being positive and sympathetic. Section 14 covers this:

 

http://www.bba.org.uk/content/1/c6/01/30/85/Banking_Code_2008.pdf

 

My argument is that on many an occasion a bank simply doesn't give the debtor a great deal of assistance and are quick to take further action / sell the debt on - which could *then* lead to further action i.e. a CO.

[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.

Edited May 20, 2008 by debt monkey
Sounded wrong

[sequenci]

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]

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]

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]

I dont work in a bank.

i didn't suggest you did.

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.

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

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

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.