A guide to Charging Orders & Orders for Sale

[sequenci]

Did you know that you can actually loose your home as a result of getting a charging order taken out against you over unsecured debt for as little as £1000. That would be an extreme case but once a charging order is in place, the creditor has the legal power to commence proceeding against you which could result in you loosing your home.

 

Did you take time to read my guide?

 

I don't think a petition is worth bothering about as the law is not going to change; and to be honest I think Charging Orders are a decent enforcement measure when used correctly.

 

To make it clearer, if the government get rid of charging orders creditors will simply bankrupt homeowners instead.

 

So what is the moer reasonable option?

[Murphy69]

Sorry - completely disagree - why take out unsecured debt at a hugh rate of interest if it then can be secured at a later date.

 

The rate of interest reflects the risk - Unsecured = high risk = high rates of interest

secured = lower risk = lower rates of interest

 

No way and how do you know what will happen regarding the law? The truth is you dont and Petitions are a method of creating awaraness about the subject.

 

You want the consumer to be screwed both ways? The consumer gets screwed enough - time to fight back.

 

Please sign this petition - time is running out –

 

http://petitions.number10.gov.uk/Charging-Orders/

Edited July 3, 2009 by Murphy69

[the_shadow]

Sorry - completely disagree - why take out unsecured debt at a hugh rate of interest if it then can be secured at a later date.

 

The rate of interest reflects the risk - Unsecured = high risk = high rates of interest

secured = lower risk = lower rates of interest

 

No way and how do you know what will happen regarding the law/ The truth is you dont and Petitions are a method of gcreating awaraness about the subject.

 

You want the consumer to be screwed both ways? The consumer gets screwed enough - time to fight back.

 

Please sign this petition - time is running out –

 

http://petitions.number10.gov.uk/Charging-Orders/

 

this has been argued before..... the difference between secured and unsecured lending... basically its the steps to retrieve the monies owned that differ, with secure its relatively easy for the creditor to obtain judgments and enforcements quickly. With unsecured you get a chance to defend the action against you and then to secure the debt prior to the serious enforcement like forcing the sale of your home.

 

This is why the EU is looking at making the same warning re: secured debt on unsecured debt, i.e. you may lose your home if you cant keep up payments.

 

As sequenci has rightly pointed out, remove charging orders and bankruptcy's will soar, some people have been advantaged by voluntary charging orders with their own clauses written in to add protection from force sale orders.

 

S.

[sequenci]

The rate of interest reflects the risk - Unsecured = high risk = high rates of interest

secured = lower risk = lower rates of interest

 

Remember that charging orders have little to do with loans and lending and more to do with judgment debts.

 

No way and how do you know what will happen regarding the law?

 

I work in this precise field and my firm regularly advise the government on policy and legislation. Of course I can't know for sure what laws will come and go but I'm pretty certain Charging Orders are here to stay; I'm willing to bet my house on it (excuse the pun).

 

You want the consumer to be screwed both ways? The consumer gets screwed enough - time to fight back.

 

Why are they getting screwed? If they could afford to pay their contractual minimum payments they would never default, have a judgment brought and a potential charging order. Remember, no charging orders = Bankruptcies instead.. Think about it.

 

Sorry if these post seems a little harsh, for the record I advise clients on this subject on a daily basis and am very keen to try and argue that these should be used reasonably (as with alternative enforcement measures).

[vint1954]

OFT Update. I am sure that this has peen posted somewhere.

 

June 2009 Update

The OFT's Review of the use of Charging Orders by its Licensees

 

As noted above, due to the reported rise in numbers of charging orders being granted the OFT has conducted a wide-ranging review of the use of charging orders as a method of enforcing judgment debts, where the debts originally arose under regulated consumer credit agreements.

 

The interim results of this review indicate that there may be potential problems with the way in which some creditors use charging orders as part of their debt enforcement activities.

 

The OFT will be working with licensees to ensure that consumers are not the subject of what we would consider unfair business practices in relation to the use of charging orders and orders for sale.

 

The OFT expects its licensees to accord with all relevant legislation and guidance when conducting debt enforcement proceedings. The OFT will take appropriate action where it finds business practices that fall below the standard expected of licensees.

[sequenci]

OFT Update. I am sure that this has peen posted somewhere.

 

June 2009 Update

The OFT's Review of the use of Charging Orders by its Licensees

 

As noted above, due to the reported rise in numbers of charging orders being granted the OFT has conducted a wide-ranging review of the use of charging orders as a method of enforcing judgment debts, where the debts originally arose under regulated consumer credit agreements.

 

The interim results of this review indicate that there may be potential problems with the way in which some creditors use charging orders as part of their debt enforcement activities.

 

The OFT will be working with licensees to ensure that consumers are not the subject of what we would consider unfair business practices in relation to the use of charging orders and orders for sale.

 

The OFT expects its licensees to accord with all relevant legislation and guidance when conducting debt enforcement proceedings. The OFT will take appropriate action where it finds business practices that fall below the standard expected of licensees.

 

Thanks for adding that.

[the_shadow]

Had a reply from a query to my MP, thought it might be interesting to post it here even though in contains stuff about stat demands also.

 

Response from Kevin Brennan MP to my MP.

 

Following a comprehensive review the government decided not to implement the provisions contained in Part 4 of the Act. These would have affected the charging order process. This decision was made in order to ensure a degree of certainty for debtors.

 

Part 4 of the Act enables creditors to apply for charging orders even if the debtor is up to date with their payments:eek:. This will not be implemented:). The announcement was supported by consumer groups who feared that removing the requirement for a debtor to be in arrears would lead to a further surge in charging orders.

 

Furthermore the Ministry of Justice is conducting a review into the volume of orders for sale compared to the number of charging orders granted. Is it intended that the findings of this review will assist in determining whether further modification to the charging order process ought to be considered.

 

However the interim findings of this review indicate that orders for sale are indeed rare and in the vast majority of cases do not follow after a charging order has been granted. In addition, the Office of Fair Trading(OFT) is examining practices relating to the use of charging orders and orders for sale relating to the consumer credit sector.

 

The Shadow is also concerned about way that statutory demands are applied. Whilst creditors must have the ability to enforce debts through the courts, the Government urges all lenders to act sympathetically to consumers who are experiencing financial difficulties, and would hope that they would only use legal action to recover a debt as a last resort.

 

Debt collectors who issue statutory demands without giving debtors reasonable opportunities to agree a repayment schedule are likely to be in breach of the OFT's debt collection guidance. This guidance outlines the type of business preactice that the OFT consider unfair and therefore incompatible with fitness to hold a consumer credit licence.

 

In addition to this, the Government has recently strengthened the OFT regime to give them greater powers to investigate and take action against unscrupulous or incompetent firms. The OFT will be targeting its monitoring and scrutiny activities on debt collectors.

 

Anyone who wishes to comment on a company's non-compliance with the OFT's guidance can do so by going to the OFT website and downloading a complaints form. This form can be found at: http://www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/DebtCollectionComplaintForm.DOC

 

 

S.

[s4ddys]

I have an individual query that I wondered if someone would be able to answer.

 

I got a CCJ from Lloyds (Solicitors Sechiari, Clark and Mitchell) for £2100 back in January and was asked to pay £60.00 per month by the court. I meant to set up a standing order to start February, but forgot to do it, I made payment in February for £60.00 and then forgot all about it. I got a letter last week with an interim charging order on my house due to having £180.00 arrears as of June. I phoned S,C&M today to ask if I could pay off the arrears and stop the order. They said they would speak to Lloyds TSB who only offered a figure of £1700 in total to pay it off, but if I couldnt do this there was nothing they could do and they would continue with the order.

 

This is now totally preying on my mind and causing me stress. I am going to write to Lloyds and send a copy to the court but was wanting advice on the points below if someone would be so kind:

 

*The house is in joint names with a friend (not partner) and that is the only think we have us linking us together. Does that make any difference?

 

*The house is in serious negative equity. My mortgage is 7 months in arrears and I have had problems all the way through keeping up with payments, I bought the house in Jan 2007 for £89,000. Is is probably worth about £85,000 now due to the credit crunch, but with all charges and interest on my mortgage (was a 100% mortgage) I know owed nearer £95,000 on my last statement. I am trying to clear the arrears at £100 per month. Would this make a difference?

 

*S,C&M have sent absolutely no correspondence about my CCJ arrears so I was not aware

 

*I am willing to start paying the £60.00 per month as of next week, but would struggle to make my mortgage arrears payment this month if I paid off the whole lot.

 

Could someone please provide some advice ASAP as I am going out of my mind with worry, and my mate is giving me serious hassle about the court papers coming to our address etc.

 

thanks and kind regards

 

s4ddy

 

 

********Now moved to its own thread*********

Edited July 7, 2009 by s4ddys

[sequenci]

I have an individual query that I wondered if someone would be able to answer.

 

Hello there, I'll have a go. You may wish to start your own thread too though as you may get more assistance.

 

I got a CCJ from Lloyds (Solicitors Sechiari, Clark and Mitchell) for £2100 back in January and was asked to pay £60.00 per month by the court. I meant to set up a standing order to start February, but forgot to do it, I made payment in February for £60.00 and then forgot all about it. I got a letter last week with an interim charging order on my house due to having £180.00 arrears as of June. I phoned S,C&M today to ask if I could pay off the arrears and stop the order. They said they would speak to Lloyds TSB who only offered a figure of £1700 in total to pay it off, but if I couldnt do this there was nothing they could do and they would continue with the order.

 

I'm sorry to learn of this. The only thing that you can do is apply to vary the terms of the court order to see if the court will accept instalments again. You can do this by making an application on a form called n245; there is a £35 fee. The underlying problem here, however, is that it is unlikey to stop the charging order process as the creditor has the interim charge.

 

*The house is in joint names with a friend (not partner) and that is the only think we have us linking us together. Does that make any difference?

the charging order would only register against your share of any potential equity. As the house in in joint names with a friend it may be possible for the creditor to apply for an order for sale, although in negative equity I doubt they will do this.

 

*The house is in serious negative equity. My mortgage is 7 months in arrears and I have had problems all the way through keeping up with payments, I bought the house in Jan 2007 for £89,000. Is is probably worth about £85,000 now due to the credit crunch, but with all charges and interest on my mortgage (was a 100% mortgage) I know owed nearer £95,000 on my last statement. I am trying to clear the arrears at £100 per month. Would this make a difference?

 

You need to object in writing to the charge being made final as the house is in negative equity, your friend should do this too. All objections need to be sent to both creditor and court at least 7 days prior to the hearing - you both should really attend the hearing too.

 

If the charging order is made final you can ask the court to pay the instalments still, you could make it a condition that the creditor cannot apply for an order for sale so long as you keep up with your instalment.

[s4ddys]

Thanks for your advice, will take this into consideration when writing my letter.

 

I have also just noticed a mistake on the application for a charging order. S,C&M have quoted the judgement was for £3580.77, however, I disputed the amount and they agreed to accept £2100. So on the form section 2 about the judgement debt is incorrect. Would it make a difference if I complained about this?

 

furthermore, having just looked through the paperwork I realise the iterim charging order was granted on the 4th June 2009 at Leeds County Court. Should I have had notification of this?

 

*********Now moved to its own thread***********

Edited July 7, 2009 by s4ddys

[knights templar]

Hi Sticky|||, Charging Order Threat

 

Read your thread on charging orders. Good stuff. Got a problem, Council intends to take a charging order on a property ; property been sold in a couple of months time. Submitted an N245 for variation of Court order. Council wrote to threathen Charging order on property. Should I wait til I hear response from Court on my N245 submission and what do I do next?

 

Knights Templar

[equinox747]

Hi this is for sequenci:

can you advise please my daughter has had a charging order placed on her house about 18 months ago,through incasso, unfortunately neither her or i were versed in the procedure to deal with it:we have CAG and S.A.R incasso both with NO reply, we are now going to take it back to her local court to force them to produce the required documents( i'm hoping they haven't got them, there is a 99% chance they haven't) when we get to court, she's is not denying that she owes the debt: it's just to Whom she owes it to? which was in question, At the time she was only 4 weeks off giving birth and was going through a tough time emotionally and psychologically as RBS were the original creditors and they passed it on to incasso, without letting my daughter know(deed of assignment) etc. can you offer any advise or help in trying to get this Charging order removed or set aside on any grounds that you know of?

thanks

[Zimmie]

Hi, hope you can offer a little advice Sequenci,

 

Credit Management Services got a CCJ against me back in 2005 regarding a personal loan with Tesco/RBS. I suffer with severe mental health problems and strokes, and my memory has become awful, so when I sent CMS my first payment I attached a letter requesting a standing order form. This never arrived and I did miss some payments, I was unaware I had until an application for an Interim Charging Order arrived.

 

I called CMS and said I would pay the amount oustanding and asked if the application could be halted. I was advised to send a cheque immediately, then to object to the Final Charging Order. I did as advised sent the cheque, then sent a letter of objection to the Final C.O, which stated my health issues, not receiving the S.O. form, and that I had paid the arrears. I had a letter from CMS in response to this stating that a S.O. form from them is not crucial to setting up a S.O. (I didn't know that as they never told me about methods of payment), they have no obligation to chase me for arrears, and that the arrears remain outstanding!

 

I checked my bank statement and the cheque for the arrears had been cashed 6 weeks earlier, so I wrote to CMS and told them. About 3 weeks later they replied saying they had now located the payment, this was 4 days before the final C.O. hearing.

 

The arrears, although having been paid over 2 months previously remained on the Final Charging Order forms and went before the Judge as still being outstanding. CMS' representative confirmed to the Judge they were still outstanding. When I tried to explain they were not, she would not let me talk, or even show the letter from CMS saying they had located the payment, or my bank statement showing when the cheque was cashed. All she said was I'm sure 'they' know the financial details better than you!

 

As I only received CMS' confirmation of the arrears being paid 4 days before the final hearing I presumed the Judge would look at the paperwork and agree that the amount CMS was quoting was wrong. Silly me!

 

So the Final C.O. was granted for an incorrect amount.

 

Incidentally I recently looked at a Statement of Account up to June 07 sent by CMS (6 months after the final C.O.) and the cheque for those arrears still doesn't appear.

 

I'm currently doing Subject Access Requests to find out more details regarding this and missold PPI, but would appreciate hearing any thoughts you have on this.

 

Regards, Zimmie.

[mac2lrk]

Hi

Sorry to but in with another question.

I thought that a charging order would ONLY be considered by the court if a debtor had missed payments on a CCJ. The CCJ was on 6th July.

The CCJ was to pay by monthly installments, and I haven't missed a payment. I have been informed by Incasso on behalf of TPF that they were proceeding with a charging order less than 2 weeks after the judgement was awarded. I have received a letter from Northampton court to say the case has been forwarded to my local court for re-determination.

I am trying to fin out as much info on this as I can before the next stage, so any help or advice will be much appreciated.

[the_shadow]

Hi

Sorry to but in with another question.

I thought that a charging order would ONLY be considered by the court if a debtor had missed payments on a CCJ. The CCJ was on 6th July.

The CCJ was to pay by monthly installments, and I haven't missed a payment. I have been informed by Incasso on behalf of TPF that they were proceeding with a charging order less than 2 weeks after the judgement was awarded. I have received a letter from Northampton court to say the case has been forwarded to my local court for re-determination.

I am trying to fin out as much info on this as I can before the next stage, so any help or advice will be much appreciated.

 

Hi Mac2lrk,

 

Unfortunately just as you can apply for a redetermination if the amount the court says to pay is too much, the claimant can also apply if they think its not enough.

 

No doubt they will ask for a forthwith order instead of the installments you are already paying on the grounds that the claimant will never receive his money otherwise and they wish it to be secured against your property, if the judge agrees then an interim charging order will follow I believe.

 

S.

[mac2lrk]

Hi

Can anyone give me some help in writing a letter to the court regarding determination / charging order.

[Mrs E Blackadder]

Hi, was just wondering if anyone can give me some advice about Charging Orders.

 

There are 3 attached to my property - all of them are my ex's. If my property is repossessed and there is nothing left to pay anyone back (we might just clear the mortgage if we're lucky but even that looks doubtful), what happens to repaying the orders? Anyone have any ideas?

[ea1610]

Hi there,

 

I'm new to this forum.

 

Can any one give me some advice on the following

 

After 6 years of being in debt I'm thinking of applying for a DRO. I have a phone app with the CCCS set up for September 3rd.

 

I am about to start University in September and the debt hanging over me is some thing I could do with out.

 

At present I am on benifits so a low income and am paying token payments (that I have not missed any of)to my creditors but one of the creditors that started as an 800 pound over draft with Natwest is now over 5k! This point has lead me to want to wipe the slate clean as I'll never be able to pay it off. The interest was frozen 3 yrs ago but Unidebt who the debt is now with state that manually the insterest is frozen but their PC system is still piling on interest.

 

The other creditor I have is Westcot who have frozen the interest and my debt with them is now 6k

 

The last creditor I have is with MBNA and is is 440.00

 

I have no assests, no savings and live in private rented accomadation.

 

I am at a minus after all my priority out goings.

 

Questions.

 

I have one credit card that is being paid off by my sister

I have an exsiting bank account that is in the black with no problems

 

Will either the bank acc or the credit card be effected by the DRO once it is in place?

 

Will my exsiting bank be contacted regarding a DRO if I do go the debt relief order route?

 

I've been to CAB and they explained as i have been a client of CCCS to talk to them first if I get no joy CAB can be the qualified body that can instruct me further.

 

Can creditors refuse or do any thing else about a DRO?

 

Thanks

E

[sequenci]

Hi, was just wondering if anyone can give me some advice about Charging Orders.

 

There are 3 attached to my property - all of them are my ex's. If my property is repossessed and there is nothing left to pay anyone back (we might just clear the mortgage if we're lucky but even that looks doubtful), what happens to repaying the orders? Anyone have any ideas?

 

Hey there.

 

Have you started your own thread? Any shortfalls on the charging orders would become unsecured again. Hope this helps!

[slick244]

I also have a charging order that is my ex's. Mortgage is Joint names with U/S loan running alongside it. Ex wants me to take on the charging order too. I am not keen to do so but feel trapped because i am unable to sign the house over to my name with the order on the property. If I sell which debt takes priority the U/S loan or the charging order? Thanks

[sequenci]

I also have a charging order that is my ex's. Mortgage is Joint names with U/S loan running alongside it. Ex wants me to take on the charging order too. I am not keen to do so but feel trapped because i am unable to sign the house over to my name with the order on the property. If I sell which debt takes priority the U/S loan or the charging order? Thanks

 

Hi there, the charging order would. Have you started your own thread? We can ghive you further help regarding this

[slick244]

I have started a thread. Thank you

[andyathers]

Hello,

. I am 40 years old. Myself and my wife have been on a debt management plan for a year now with payplan.We have 15 creditors and and all are ok so far. The only exception is Tesco loan.

They have chased us mercilessly via Incasso solicitors. They took me to court for a CCJ in may, this was granted and the payment figure was £26.60 the same amount as My plan with payplan.

 

They took me back to court in July to ask for permission to apply for a charging order, the judge did give them permission but would not be enforceable as long as payments were kept up. In that hearing incasso said I never made correct payments, but at the the time I didn’t take that in. The fact is they have always had the correct payments. So incasso are again taking me to court in September for an interim charging order.

 

The only problem I can see with payments is the CCJ was for £26.60 that was against me, but the loan is a joint loan with my wife, Payplan split the payment and sent £13.30 to Incasso( solicitors) and £13.30 direct to Tesco. Payplan said that in the future incasso could then take my wife to court and get a further £26.60 from her. So doubling the payments. Payplan have now changed there payments and sent the full amount to incasso( Tesco solicitors)

 

The house is in negative equity, we have young children, my wife has a disability, all other creditors are fine Is there any other defence I could make.

 

DO I SEND A DEFENCE TO INCASSO AND THE COURT, BEFORE THIS HEARING.ALSO THE HEARING DOESNT INVITE ME TO IT.

 

 

Thankyou Andrew

My thread can be found here - http://www.consumeractiongroup.co.uk/forum/legal-issues/215178-help-needed-re-court.html

Edited August 23, 2009 by supasnooper
added link

[andyathers]

CAN ANYONE HELP WITH THIS, DO I HAVE TO TURN UP.HOW DO I DRAFT A LETTER TO DEFEND IT.AND WHO DO I SEND IT TO

 

 

 

 

Edited August 22, 2009 by andyathers

[AnotherUserSeekingAdvice]

What happens to interim charging orders applied via CCJ and noted on the land registry in the event that the interim charge was applied whilst the property was in the going through the early stages of a sale to new owners? Im guessing the banks would contact all creditors listed and go through the pecking order and only clear what creditors can be cleared ? The courts who have put an interim charge on the property at this moment in time, are not aware of no equity in the property for them to pursue finalising the charge at a court hearing. Would it be advisable to contact such creditors so the interim charge can be removed and therefore not delay the sale of the property to the new owners ?