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.

[FunkyFox]

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

[FunkyFox]

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.

[FunkyFox]

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 http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/146628-have-look-who-members-3.html#post1549088

 

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...

 

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

[FunkyFox]

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.

[FunkyFox]

Regarding your point, if so, and you have the choice of both where the penanlty is similar, why not just take a secured loan in the first place and a far lower interest rate. It makes no sense.

 

And Mr.Shed, it is also illegal for a bank to seek to recover credit where an account is in dispute due to incomplete or missing credit agreements, inacurrate default notices, failure to provide documentation, lack of proper assignment and so on.....but clearly you think thats ok.

 

And you know what, I'm not sure I've ever heard of marriages breaking up, people becoming clincally depressed or someone commiting suicide because of the despair caused by penalty charges or PPI miselling. But it happens all the time becasue of the stress casued by debt and their treatment by a creditor or DCA. You could argue that they could have chosen not to get into debt but conversly if you follow your arguement through people should be educated about PPI's and not get overdrawn and incurr charges. It is a total contradiction and its up to you if you ignore that fact (as you have most of my other points).

Edited June 9, 2008 by FunkyFox

[FunkyFox]

This is getting tiresome. Please can people at least read the original post and the text of the petition before assuming that this is some crusade to get charging orders banned. I'm not sure how relevant these current arguments are to the original discussion?

 

I agree almost entirely with sequenci and the point is that I wanted to stimulate discussion about the reasonable use on a charging order as form of enforcement and to inform borrowers before they take out borrowing that a charging order may result if you default.

 

If you look back at previous posts it would seem that bot HMCS and the OFT agree with both these points.

 

This petition is for people who feel that they would like to see fairer and more proportionate use of charging orders and consumers advised as to the consequences of there borrowing.

[FunkyFox]

FF - I would ask that you withdraw that comment. I consider it quite offensive that because my opinion differs with yours, I am automatically a "troll".

 

FYI, the only reason I have ignored most of your points is because I am at work currently. I plan to do a full reply later.

 

I am disappointed - I thought I may finally be able to have an intellectual debate with someone on this forum regarding debt management. Instead, it would appear that as usual, I am wrong because my opinion differs with the majority on these forums(although, I dare say, not the majority of the populace) and I am a "troll". Never mind.

 

Done, I was actually refering really to debtmonkey (see previous posts too) rather than yourself. It is a highly emotive subject (for me especially at the moment) and not always easy to keep it detached. Sorry if I offended you.

[FunkyFox]

would you mind showing me the statute or case law that backs this up? The creditor can take the action, it would be down to the debtor to raise these issues. The whole 'dispute' thing isn't law at all, it's just under s2.8k of The OFT Guidance as far as I was aware.

 

I fully appreciate that the UK debt collection industry is a shambolic affair with most firms involved causing a great deal of pain for thousands of people. Hopefully with the help of sites like this and other worthwhile organisations we can help educate people into what their rights are and how to go about enforcing them.

 

Well maybe I am just showing my ignorance here but you read all over this forum about the 12+30 day thing for producing a CCA and a 'summary criminal offence' being committed. I have to admit to making assumptions about what this actually means. Either way there are lots of things not being done which either morally, legally or for the sake of good practice that are not and at least we are agreed the sector is a shambles.

[FunkyFox]

. I kinda like the role of devil's advocate.

 

You do it very well.....

[FunkyFox]

Hi, the link does not seem to be working is this the one you were refering to?

 

Debtors to have their borrowing written off | This is Money

Edited June 10, 2008 by FunkyFox

[FunkyFox]

Yes, but how many are getting them? Only an extremely small percentage I would have thought.

 

I'm afraid you are are wrong Mr Shed. As you admitted in a previous post you are ignorant of the extent of the problem yet make a statement like this.

 

The reality is that I have only heard of ONE case of someone succesfully managing to defend a charging order. And the arguement that you have to default on a judgement first (at the momement) is complete red herring as creditors are now regualry seeking redetermination for judgement forthwith as a matter of course. I had a £500 per month shortfall each month and both judgements were orginally for £1 per month. Both were redetermined to forthwith payment which I had no chance of paying so immediately defaulted.

 

From the stories on here courts are not considering peoples circumstances and are allowing charging orders to be granted as a matter of course. If there are loads of people that have managed to defend this method of enforcement then I am happy to be proved wrong, but I won't hold my breath.

[FunkyFox]

i though i would put my two pence in about charging orders as i deal with them on a day to day basis for as part of an enforcement team for a well know utility company.

 

Rather than charging orders becoming increasingly common, we have actually noticed that judges are now starting to question applications for charging orders more often both at the application and the final hearing stage.

 

Judges are getting wise to the number of charging order applications being put forward and are now refusing charging order from £400 to £800 or granting them without costs leaving for the court costs/solicitors costs & land registration fees to be picked up by the applicant.

 

Judges on certain county courts are advising that they will refuse to grant charging orders for less than £500, if an application is put before them.

 

Judges are now increasingly questioning what other methods of enforcement have been tried before a charging order has been sought i.e attachment of earnings & warrants, visits, oral examinations.

 

although they company i work for specifically don't deal with order for sales post charging order, discussion with judges during proceedings for charging orders have revealed that judges are unlikely to order any orders for sale without substantive debts before hand either secure with one or more charging orders.

 

Thanks for your contribution to the discussion.

 

I think its great that DJ's are starting to question the validity of issueing charging orders, especially for smaller debts.

 

Although they may be questioning them more in your cases, I think this may be due to the shear numbers (which still appear to be rising) they are seeing as a result of unsecured credit debts coming before them.

 

Personally, in theory I actually have less of an issue with a utility debt being secured on a property because at least it wasn't advertised as an unsecured debt, like all these credit cards and personal loans are.

 

As I said, if applications for CO's are at least being questioned rather than being made as a matter of course then that has to a good thing. I wonder if it has anything to do with the HMCS as suggested here http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/146628-have-look-who-members-3.html#post1549088

 

FF

[FunkyFox]

You know Jon the more I find out about this sordid industry the more I am determined to do my bit to make them clean up their act.

[FunkyFox]

There should be a specific warning to debtors in the Banking Code and all advertising relating to unsecured lending that if you do not keep up with your payments, then eventually a Charging Order may be granted and you may loose possession of your house. Why is this not highlighted and put into plain English so that everyone has access to this information.

 

This is exactly one of the points in the petition (have you signed? ) I even complained to the ASA about a Lombard TV advert for an unsecured loan which said '...and don't worry, you loan won't be secured against your property..' and they dismissed my complaint. Ho Hum.

[FunkyFox]

This has just over 1 month to run and with only 68 signatures it is not going to suceed in changing anything.

 

The petition closes on 25th October and if before then we can secure a minimum of 200 signatures then it will at least get passed to the relevant governement department for a response.

 

Please can I ask that if you believe that the current use of charging orders at the earliest opportunity by many creditors and DCA's needs to be more closely regulated that you both sign the petition yourself and pass the message on to as many people as you can. I feel it would be a real shame if out of 200,000 members on CAG we couldn't get 200 signatures.

 

If you are members of other forums why not mention it on there and send an email to your friends and family.

 

Every little bit helps.

 

Thanks,FF

[FunkyFox]

Now up to 139. Nice work.

 

If you do feel compelled to write or email your MP feel free to use the attached letter which I sent today.

 

You can find your MP's details here UK Parliament - Find Your MP if you email remember to include your name and address.

 

Feel free to chop, change and amend as required. Sorry for any spelling or typos, I'm rubbish at proof reading.

 

Dear

 

Re: Charging Orders and the Tribunals, Courts and Enforcements Act 2007

 

As a member of your constituency I am writing to you to express my concern about the proposed introduction of elements of the above act which refer specifically to applications for charging orders.

 

Currently, should a creditor seek to enforce an unsecured debt such as credit card through the civil courts by way of a charging order against a debtors home, there is a requirement for the defendant to default on the terms of the initial court order, before an application for a charging order can be made by the creditor. Section 93 of the above act proposes to dispense with this requirement, making it possible for a creditor to obtain both a county court judgment and legal charge against a persons home at a single hearing.

 

I am concerned that should these changes become law, it will result in wholesale abuse of the new law with creditors and debt collection agencies rushing to take debtors through the court system, rather than negotiate manageable payment plans with creditors. Charging orders should always be a last resort, not a way for organisations to efficiently balance their books.

 

I would like to propose that a number of elements of the both the existing use and the proposed new use of charging orders is examined for possible amendment. These are;

 

• Guidelines issued to the court to ensure that the granting of a charging order is proportionate and appropriate.
  

• That a debtors personal circumstances are always taken into consideration before a charging order is granted. This must include the debtors state of health and mind, their family circumstances including children and other dependants, ensuring that other creditors are not prejudiced by the granting of a charging order, that the debtor has received professional advice as to the implications of the order and had a reasonable opportunity to defend their case through the courts and whether the creditor has made reasonable attempts to recover the debt by other means such as manageable arrangement. Currently some of these matters are meant to be considered but they are routinely ignored.
  

• That there must be equity in the home in order for a charging order to be granted. If this is not a consideration the number of personal bankruptcies will certainly rocket as debtors realise this is a far more palatable option than losing all control over their home for many years to come.
  

• That a negotiated settlement or payment arrangement has been broken by the debtor prior to court action being commenced. It is essential that the creditor has made reasonable efforts to allow the debtor to pay.
  

• That providers of unsecured credit are required to clearly give warnings that ‘your home may be at risk’ in the same way as they do for secured loans.
  

• That the way unsecured debt is sold is more tightly regulated to unsure that it is not an ‘Unfair Consumer Practice’. I for one would not have taken unsecured lending had I known that a possible sanction was it becoming secured against my property.
  

The implications of the wholesale use and abuse of charging orders by creditors and in particular debt collection agencies, who may have bought the debt for as little as 1% of its face value will be enormous, both on individuals and the housing market and wider economy.

 

As my MP I urge you to investigate this matter fully and begin the process of repealing this proposed amendment and to stimulate discussion on the wider use of charging orders as form of enforcing unsecured debt.

 

Finally, whilst I do not see this as a party political issue, more so an issue of protecting the rights of consumers and homeowners in this country, I would like to refer you to the following quotation by Vince Cable from the Observer dated 14th September 2008 where he states;

 

“'I hope that the government will retreat from what was clearly not properly thought through at the stage of primary legislation. The problem of repossession was bad enough in the early 1990s. We now have the problem of sub-prime lenders, and potentially large numbers of second charge creditors, all forcing people out of their homes. The government must stop short of introducing regulation giving effect to these powers.”

 

I look forward to hearing from you in due course.

 

Yours sincerely

 

[FunkyFox]

I believe he's an 'advisor' at Bridgepoint the firm of VC's that own 1st Credit.

 

Bridgepoint | Advisory Committee

 

All the more reason to write to him to highlight his conflict of interest:mad:

[FunkyFox]

Could the ASA be legally liable for the consequences of their actions, in the event that such a loan was to subsequently become secured?

 

And could this advert be used as evidence that Lombard had misled the customer?

 

I somehow doubt it very much. They dismissed my compliant entirely and very quickly.

 

My frustration in trying to get the authorities see sense huge, yet I lack the time or the energy to do anything more about it.

 

The advert in question appeared to me to be wholey misleading yet those that manage/police the advertisers did not agree.

[FunkyFox]

I'm not sure if this has been reported elsewhere on the forum but I thought I'd mention it here.

 

In this Youtube video from yesterday Gordon Brown confirms that the Courts, Tribunals and Enforcements Act will not be implementing the proposed changes relating to Baliffs and Charging Orders. This is excellent news and the overall tone of the piece seems to indicate that they may well be trying to strengthen debtors postions and ensure good practive.

 

Excellent news and hopefully this little petition had something to do with it. You never know. Well done to everyone who bothered to sign it.

 

FF