A guide to Charging Orders & Orders for Sale

[sequenci]

Hi sequenci, when you say high how high do you mean, On a debt of about £3k ish would the court grant an installment order especially if they are on IS?

 

It's possible, and you should ALWAYS try to get one - the only think the consider is that if you can only offer a small instalment then a court may think it would be more reasonable for a forthwith order to be granted as the alternative would result in the debt taking a very long

[frettful38]

Thank you sequenci for your reply, but where would the court think that someone in this situation come up with all the sum owed at once, if they grant a forthwith order? That is not fair at all, and would the POC not have to state that the creditor is applying for a forthwith order? Or do they just ask for this at the hearing?

 

I also think that before granting any kind of judgment that the court would like to hear both sides of the case and see who has been reasonable aand who has not, then on these facts should make a decision accordingly. Each case would be judged on its own merit?

[sequenci]

Thank you sequenci for your reply, but where would the court think that someone in this situation come up with all the sum owed at once, if they grant a forthwith order? That is not fair at all, and would the POC not have to state that the creditor is applying for a forthwith order? Or do they just ask for this at the hearing?

 

It would be the court's decision to ensure the order is fair for all parties involved. Is it fair to the creditor that someone with a property with lots of equity can pay £1 per month? I can understand that a forthwith + charging order is likely to be the 'fairest' way of dealing with the situation - as harsh as it may feel to the debtor.

I also think that before granting any kind of judgment that the court would like to hear both sides of the case and see who has been reasonable aand who has not, then on these facts should make a decision accordingly. Each case would be judged on its own merit?

 

Well, that is why the pre-action protocol is in place so it would be down to the debtor to show the court what the creditor has been like. The OFT are actively involved in clamping down on certain creditors - take a look:

 

http://www.oft.gov.uk/news-and-updates/press/2010/119-10

[MARTIN3030]

OFT acts on concerns about charging orders

 

119/10 22 November 2010

The OFT has imposed requirements on Alliance and Leicester Personal Finance Limited, American Express Services Europe Limited, HFC Bank Limited (part of the HSBC Group) and Welcome Financial Services Limited (part of Cattles plc) to address concerns about the way some consumer debts are enforced.

A charging order is a court order that places a 'charge' on a debtor's property, turning unpaid, unsecured judgment debts into secured debts. This means that once any prior ranking charges on the property have been settled, the debt must be paid back out of the available proceeds of sale when the debtor sells the property. A creditor who has obtained a charging order can also apply to the court for an order requiring the property to be sold sooner but this only happens in a minority of cases.

Charging orders are a legitimate way to secure and ultimately recoup unpaid debts, however, a recent investigation by the OFT found problems with the way some lenders use them.

Problems uncovered by the OFT's investigation were specific to each business, as set out in the individual requirements, but across the sector they include a failure to consider the customer's circumstances or proportionality before asking the court to put a charging order in place; not building adequate checks into the lender's decision-making process; and also applying substantial charges for referring cases to a debt collection agency. In a minority of cases, lenders sent oppressive and/or misleading correspondence.

The four companies subject to today's announcement have co-operated fully with the OFT during the investigation and have each made changes to address the specific problems identified within their business, as set out in the requirements. The OFT is working to ensure that the whole banking industry uses charging orders and other debt enforcement tools responsibly.

Ray Watson, the OFT's Director of Consumer Credit, said:

'Our investigation uncovered instances of charging orders being used to secure debts of less than £600. Lenders are entitled to use charging orders but must do so proportionately. Where we consider the use of charging orders to be unfair or oppressive we will take action to protect consumers.'

[frettful38]

Thanks guys excellent news and this info will come in very handy indeed

[cymruambyth]

Hi I don't know whether to post her or on the spin off thread, so I'll start here.

CCJ awarded and DJ said that if an arrangement to pay can be reached within 21 days he believed that judgement would not be recorded????

An installment plan has been reached, but in their letter of acceptance the solicitor states that while accepting the repayment plan, the DCA are going to go for a CO because it wil take 20 years to clear. I am still within the 30 days so the CCJ isn't recorded yet. Any suggestions on what I can do other than rob a bank or win the lottery?

Thank you

[the_shadow]

Hi I don't know whether to post her or on the spin off thread, so I'll start here.

CCJ awarded and DJ said that if an arrangement to pay can be reached within 21 days he believed that judgement would not be recorded????

An installment plan has been reached, but in their letter of acceptance the solicitor states that while accepting the repayment plan, the DCA are going to go for a CO because it wil take 20 years to clear. I am still within the 30 days so the CCJ isn't recorded yet. Any suggestions on what I can do other than rob a bank or win the lottery?

Thank you

 

 

Do you have other creditors with equal or owed more amounts? you could put it to them that a charging order may be applied for and would they help you object so they stay in similar position to how they are now, a charging order would give the creditor obtaining it more rights over your assets/income than other debts.

 

The national debt helpline website holds good info on charging orders but in the end it may be the best you can achieve is to negotiate an agreement that no order for sale can be requested and it remains just a charging order.

 

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=15_charging_orders_in_the_county_court

 

S.

[frettful38]

Hi cym, sorry to hear about your predicament and I am sure this must be worrying and stressful for you too,.

 

If I was you and was in a position to pay it off in one hit then that is what I would do..........but if you are unable to do that then maybe you will have no choice but to pay in installments.

 

How can the DCA apply for a charging order if an installments plan has been reached? I would have thought the only way they could do this is if you defaulted on the payments?

[sequenci]

Hi I don't know whether to post her or on the spin off thread, so I'll start here.

CCJ awarded and DJ said that if an arrangement to pay can be reached within 21 days he believed that judgement would not be recorded????

An installment plan has been reached, but in their letter of acceptance the solicitor states that while accepting the repayment plan, the DCA are going to go for a CO because it wil take 20 years to clear. I am still within the 30 days so the CCJ isn't recorded yet. Any suggestions on what I can do other than rob a bank or win the lottery?

Thank you

 

Take a read of my guide. If you're up-to-date with the instalment then you will be able to oppose the CO being made final. The only way a creditor can get around this is by making an application to redetermine or vary the judgment.

[sequenci]

How can the DCA apply for a charging order if an installments plan has been reached? I would have thought the only way they could do this is if you defaulted on the payments?

 

They can make the application, it'll be down to the debtor to argue that the charge should not be made final.

[frettful38]

Thanks for that info sequenci, learn something new each day LOL!

[cymruambyth]

Take a read of my guide. If you're up-to-date with the instalment then you will be able to oppose the CO being made final. The only way a creditor can get around this is by making an application to redetermine or vary the judgment.

 

Thanks for the reply, I had read your guide; this is only just taking place. I have not yet received judgement from the court, so only have the DJ's word from the day. An installment plan was agreed with solicitors but 1st installment is not until January. They have said in the same letter that the installments are acceptable, but because it will take 20 years to clear they will be going for a CO.

[the_shadow]

cym,

 

Did the judge make this a forthwith order? sounds like it from the comments made by the judge in regards registering the CCJ. Possibility of applying for a redetermination (I think thats the process) to have the repayment terms changed before they can put in for a CO.

 

S.

[sequenci]

As Shadow mentioned we need to know what order the judge made. If it is forthwith then we need to get a redetermination applied for pronto.

 

Do let us know ASAP as we will then be able to take the next step!

[Basil Fawlty]

Can anyone tell me if its possible to force a sale where all debts are in one persons name, but the ownership/mortgage is joint, as I'm led to believe that a charging order cant be applied, only a restriction.

 

BF

[cymruambyth]

As Shadow mentioned we need to know what order the judge made. If it is forthwith then we need to get a redetermination applied for pronto.

 

Do let us know ASAP as we will then be able to take the next step!

 

Thank you, this court is notoriously slow with it's paperwork, plus snow, plus Christmas ..... I'll phone on Monday and see if they will tell me anything!

[frettful38]

Good luck cym, I hope it all turns out well for you. Not a nice thing to go through, I know as I have been there myself.

[cymruambyth]

Hi I've heard from the court, the world debt was due to be paid by 4pm on xx December. I have sent acopy of the letter from solicitors to the DJ to show that I have come to an arrangement plus sent a copy of all letters to the court manager. Any further suggestions gratefully accepted.

[Ganymede]

Can anyone tell me if its possible to force a sale where all debts are in one persons name, but the ownership/mortgage is joint, as I'm led to believe that a charging order cant be applied, only a restriction.

 

BF

 

 

Hi,

 

You are correct that a restriction will be registered against the debtors beneficial interest in the property and not a charging order if the property is jointly owned.

 

However, a restriction can be enforced in the same way as a charging order and it is possible to apply for an order for sale.

[cymruambyth]

Hi I've heard from the court, the world debt was due to be paid by 4pm on xx December. I have sent acopy of the letter from solicitors to the DJ to show that I have come to an arrangement plus sent a copy of all letters to the court manager. Any further suggestions gratefully accepted.

 

As I'm living in a post free zone does anyone think I should be taking any further action please?

[mkb]

Not sure that there is anything you CAN be doing - you have notified the court of the agreed payments (with proof of delivery I imagine) so I would set-up a standing order to pay then wait for any developments from the court.

 

If and when you hear anything further, you will have a record of the agreement plus a payment record so you ave stuck to your side of the deal and any judge has to acknowledge that.

[sequenci]

Hi I've heard from the court, the world debt was due to be paid by 4pm on xx December. I have sent acopy of the letter from solicitors to the DJ to show that I have come to an arrangement plus sent a copy of all letters to the court manager. Any further suggestions gratefully accepted.

 

If the entrie debt is due as a lump-sum you need to get a variation application in pronto to get instalments put in place.

[meursault22]

Hi, having been through repeated order of sale application by the water company, they have four charging orders secured on the property for their legal costs from the order for sale applications. Having tried everything, I've handed the keys back to my mortgage company and as the house is in negative equity, there won't be enough for the mortage, and associated fees. The mortage company say that the remainder will become an unsecured loan, but what will happen with the charging orders from the water company? Two of them have been paid, although they have refused to remove them until they are all paid, and one of the others has a warrant of execution for the same money, with an up to date payment plan. the total of the c.o.'s is around ten grand.

[Undercover-Elsa]

Hi Meursault22,

Dear me, what a horrendous situation for you!! I really feel for your plight.

It beggars belief that the water co (who are, however, notoriously VERY aggressive in going straight to court for debt collection) should even consider forcing a sale in negative equity.

Their actions have obviously put you out of your home and pointlessly run up (how much?) legal costs when they have no prospect of realising any money for the sale.

A totally pointless excercise which has only served to make the situation worse.

 

Sequenci is the expert and will hopefully be along to advise, but I would have thought that the CO's will be cancelled if there's no surplus following the mortgage co's sale.

The debt will obviously still exist and, as you know, their only other recourse then is through Warrant of Execution.

I'd be making pretty sure that as few (non essential) possessions as possible are in your name, and try and negotiate a sustainable repayment programme with them.

 

It depends on your actual income, but once you've lost your main asset, there may be other avenues of help, eg debt relief orders or even Bankruptcy for damage limitation of your financial crisis.

 

I detest the water companies, they are the only organisation I can think of who can actually sue you for something you've not used yet - I received a summons for almost a full year ahead after a DD mix up when I changed accounts, so instead of the £150 ish arrears I actually owed they took me for around £500. Preposterous. I paid it to avoid a CCJ, but had to get into arrears with my loan payments to do it.

 

All the very best to you, I hope Sequenci can offer some more positive advice,

 

kind regards,

 

Elsa xx

[meursault22]

Hi Elsa,

Part of the problem is that these companies will use any dirty tricks they can get away with. If county court judges didn't go along with it, it wouldn't happen either, but for some reason only known to themselves, they're happy to hammer the individual and grossly favour the water company. The water company deals in property and has a subsidary for this and also owns a large firm of builders and redevelopers. It is easy for them to get several valuations which are made without even visiting the property, and which state there is enough equity to cover the charging orders. I have learned from unfortunates who have had an order for sale granted against them, that there is no limit on the administration costs the water company can charge for selling a repossessed property, so if an order for sale is granted to them, they can charge the whole amount achieved by selling the property to cover their fees. This is how they make their money. They'll still carry on chasing the amount of the charging orders, and the mortgage company and other creditors will want their money too. I made the decision to hand the keys back to the mortgage company to stop the water company taking control of the sale and making even more money in this way. At least the mortgage wil be almost taken care of and the water company won't be able to make any more charges. The shame is that it's not even as though you can change water suppliers if you don't agree with their practices! In my case, they have been granted all this by the judge, when there wasn't even water connected to the house. The water industry needs a serious shake up, but it's not going to happen when their making so much money by fair means or foul.

Edited December 23, 2010 by meursault22