A guide to Charging Orders & Orders for Sale

[sequenci]

Charging Orders

 

A Charging Order is an order which secures a money judgment against the judgment debtor’s property or interest in a property. Creditors usually apply for Charging Orders as they are a reasonably easy method of ensuring the likelihood of them receiving their money back at some point in the future. Some creditors have a policy of applying for Charging Orders as a matter of course, some will apply as the debtor’s debt is large or their total indebtedness is high. Some will try the Charging Order route if they are offered a nominal instalment amount by the debtor, or that it will take many years to clear the debt.

 

Charging Orders have many advantages for the creditor, for a start they can turn an unsecured debt into a secured one, this could put extra pressure on the debtor to treat the debt with a preference. Statutory interest will run on the order, unless it is below £5,000 or regulated by The Consumer Credit Act. Some creditors may argue that a Charging Order will secure contractual interest. There is no time limit to apply for an order and the process can start in the creditor’s chosen county court. The order would never be included within an Individual Voluntary Agreement, it is a debt which does not prove in a bankruptcy although the creditor could waive the Charging Order and apply to make the debtor bankrupt.

 

I must stress that on some occasions securing a charge against a property isn’t necessarily a bad thing at all, providing conditions are attached to it. If a debtor is unable to make any payments against a debt they may wish to consider offering the creditor a voluntary charge. The same might apply if the debtor is terminally ill or a single house owner with no heirs. The great thing with a voluntary charge is that it might be easy to ensure conditions are attached to the charge, these conditions could be that the creditor is not allowed to request an order for sale and also that all interest is frozen when the charge is applied.

The Charging Order Process

 

The process follows CPR 73.3: Application for a Charging Order.

 

1.The creditor successfully obtains a County Court Judgment (CCJ)

2.There is no instalment order granted / The debtor defaults on the instalment order

3.The creditor applies for the Interim Charging Order (no hearing) [n379]

4.Interim Charging Order made [n86]

5.Hearing for the Final Charging Order (Can be transferred to debtor’s local court)

6.Interim Order discharged or Final Charging Order Granted [n87]

 

The creditor could then start the process for an Order for Sale, this is very rare as usually the creditor is happy to sit on the Charging Order. If the creditor wishes to apply for an Order for Sale, there would be another hearing.

When can a creditor apply for a Charging Order?

 

First and foremost, a creditor would have had to have obtained a money judgment against the debtor. If the judgment is ‘forthwith’, the demand is for immediate payment of the debt. In theory, the debt would become due and payable at once – a creditor could apply for the Charging Order as soon as it was granted.

 

Section 1: The Charging Orders Act 1979:

 

Where, under a judgment or order of the High Court or a county court, a person (the “debtor”) is required to pay a sum of money to another person (the “creditor”) then, for the purpose of enforcing that judgment or order, the appropriate court may make an order in accordance with the provisions of this Act imposing on any such property of the debtor as may be specified in the order a charge for securing the payment of any money due or to become due under the judgment or order.

 

If there is an instalment order in place, a creditor would not be able to apply for a Charging Order.

 

Section 86(1) The County Courts Act 1984:

 

Where the court has made an order for payment of any sum of money by instalments, execution on the order shall not be issued until after default in payment of some instalment according to the order.

 

This was further considered in the case of Mercantile Credit V Ellis in The Court of Appeal 1987. It was found that the wording of the Charging Orders Act states quite clearly that no further action could be taken without a default in payment. It should be noted, however, that in the case of Ropaigealach V Allied Irish Bank CA Nov 2001 where an instalment order is made AFTER an interim charging order has been made, a court has the jurisdiction to make a Charging Order final.

 

There are various tactics which a creditor will use to try and obtain the Interim Order, they will try their best not to allow the court grant an instalment order on a CCJ. If a debtor wishes to admit the claim and request instalments, the creditor may argue the instalments are unacceptable and that a Charging Order is more appropriate. A creditor might also seek a re-determination if a court accepts a debtor’s offer of instalments. Some creditors have even been known to ask a district judge to consider a Time Order to change the judgment to forthwith.

How to try and stop the Interim Charging Order being applied for

 

Charging orders are notoriously difficult to stop, District Judges are usually reluctant to turn down the creditor’s application. Creditors do not usually opponse another creditor’s application either. The Charging Order process isn’t automatically transferred to the debtor’s local court, the would have to request this (possibly at a cost).

 

When a County Court claim form is received and a debtor wishes to make an admission it is imperitive that a reasonable offer of payment is made. If it is accepted then ensure that the payment is made on time each month. Never offer a nil payment. It is important to ensure that the N9A admission form is sent within time to the correct address on the claim form. It may be worth considering sending the form recorded delivery, send a copy to both the creditor and the court.

What if you have been served with an Interim Charging Order

 

The first thing to do is to check to see whether the correct process has been followed. Always check to ensure that the creditor is actually chasing the right person! At this point we will assume that any potential challenge to the legality of the Judgment has been carried out (CCA request, Challenging default notices etc). It is worth checking to ensure that the judgment has been entered correctly, did the N30 form outline the determination process correctly? If it didn’t you could consider a set aside. It is worth checking the day the Interim order was applied for to see if the CCJ was actually in default on that day. If an application to vary the terms of the CCJ has been sent to the court prior to the Interim Order request ensure that the court considers the variation before considering the Interim Order. The creditor must send a copy of the Interim Charging Order and Affidavit to all those with a legal and/or beneficial interest in the property, for example the mortgage lender. If this doesn’t occur the hearing will be adjourned.

 

Objections to The Final Charging Order

 

It might be worth seeing if any of your other creditors are willing to object to the Charging Order being made final especially if there are any who are owed significantly more than the original creditor. Alternatively you may well find that you have grounds to object to the charging order being made final. Any arguments that you wish to raise need to be filed with the court and the creditor at least 7 days prior to the Final Charging Order Hearing (CPR 73.8).

 

If there are divorce proceedings pending, the Charging Order hearing will be adjourned pending the outcome of the ancillary proceedings. If you would like to enter into an IVA, the Interim Charging Order would be dropped as an IVA Interim Order would be made.

 

Section 1(5) of The Charging Orders Act 1979 reads:

 

In deciding whether to make a charging order the court shall consider all the circumstances of the case and, in particular, any evidence before it as to—

 

(a) the personal circumstances of the debtor, and

(b) whether any other creditor of the debtor would be likely to be unduly prejudiced by the making of the order

 

Some possible arguments which could be used to oppose the Final Charging Order are:

 

- Could there be other methods of enforcement which could be used by the court to enforce the debt?

- If the total indebtedness of the judgment debtor is less than £5,000, could they have an administration order instead?

- Could the creditor have offered a secured loan instead of an unsecured one?

- A recent change in circumstances shows that reasonable repayments can now be made (evidence would be needed)

- All the missed payments have now been paid

- There is little or no equity in the property

- The CCJ is very small compared to the amount of equity

- If the CCJ is for a CCA regulated agreement can the court consider a Time Order instead?

- Granting a Charging Order would unfairly prejudice other creditors who have accepted pro-rata payments

- The debtor is about to go bankrupt or enter into an IVA, the creditor would have an unfair advantage if they were to have their debt secured.

 

If only one owner of the property is liable for the debt:

 

Providing there us no pending divorce proceedings, a husband/wife or any other beneficiary of the home is entitled to make representations as to all the circumstances of the case. They could try and minimise the percentage of the equity of the debtor by showing evidence of:

 

- Contributions towards mortgage payments

- Contributions towards the deposit

- A declaration of trust at the time the property was purchased

 

The Final Hearing

 

The court has the following options

 

- Make the Charging Order final

- Discharge the Interim Order and dismiss the application

- Decide any issues in dispute

- Direct a trial of any such issues

 

Prior to the hearing the Judge would have read any objections, each party will also have the chance to make oral representations at the hearing.

 

The vast majority of Charging Order applications result in the Order being made final. One thing to seriously consider is that if the Order is made final then conditions should be attached to it, these conditions would stop any further enforcement. A popular condition is that further action should not be possible providing an instalment is kept up with. Another popular condition is that no enforcement should be possible until all the children have left home. If no conditions were made at the time of the Final Charging Order hearing, it is possible to vary the terms of the Order via an application on the N245 form.

 

Set Asides & Variations

 

These are dealt with under CPR 73.9

 

You would need to apply to the court which made the original order.

 

Setting aside a Charging order is usually called “Discharging”, this is under s3(5) of the Charging Orders Act. The arguments for discharge must not have been made to the court previously. Sometimes a creditor may wish to discharge their own Charging Order, as an example they may wish to make a debtor bankrupt., they could still issue a statutory demand even though they have a charge in place (s269 Insolvency Act 1986). You can vary the terms of a charging order via form N245.

 

Satisfying the Charging Order

 

If the debt has been paid off, along with all costs, an application can be made to the court for a certificate of satisfaction, this can then be sent to the Land Registry.

 

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.

 

** New info for judgments obtained after 1st October 2008 **

 

I've written a blog on the subject here: http://www.consumeractiongroup.co.uk/forum/entry.php?191-Post-judgment-interest-on-CCA-regulated-debts

 

In a nut-shell post judgment interest can no longer be applied to CCA regulated charging orders at all.

- 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.

- Some 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.

 

Orders for sale

 

An Order for sale is the way to enforce a Charging Order, it would allows the claimant the right to take possession of the property and to sell it so that they can recover the monies within their charge. The process is applied via Part 73.10 CPR. For jointly owned property the court would also have to consider the Trust of Land and Appointment if Trustees Act 1996 (TLATA). S15 of TLATA outlines criteria which may give some protection against an Order for Sale. At the end of this piece I’ve outlined the relevant sections of law with additional relevant notes.

Defending an Order for Sale

 

Responding to a claim

 

Under CPR 8.30

 

The defendant must

(a) file an acknowledgment of service in the relevant practice form not more than 14 days after service of the claim form; and

(b) serve the acknowledgment of service on the claimant and any other party.

 

(2) The acknowledgment of service must state –

(a) whether the defendant contests the claim; and

(b) if the defendant seeks a different remedy from that set out in the claim form, what that remedy is.

 

Transferring to the debtor’s local court

 

There is not provision for a transfer. An application court be made under CPR Part 30 Rule 30.3(2)(b), which would give the District Judge discretion to agree to transfer the case on the grounds of fairness or convenience to the debtor.

 

It is vital that all preparation for the hearing has been carried out, check the Affidavit to ensure that the correct details of the Charging Order have been recorded together with outstanding balances, the value of the property and all the information required under PD73.4.3 has been provided. Anyone with a legal or equitable interest in the property has a right to be present, to be represented and to be heard. If there are divorce proceedings then ensure that the solicitor involved in the divorce has been referred to interventionist action can be taken.

 

The Hearing

 

At the hearing the court may do one of four things:

 

- Grant the order for sale

- Adjourn the case on terms

- Make a suspended order on terms

- Dismiss the application

 

If the house is jointly owned the court has the duty and the power to declare what the extent of the debtor(s) beneficial interest is under s14 of The Trusts of Land and Appointment of Trustees Act 1996 (TLATA). Under s15 TLATA the court should pay attention to:

 

- Whether there is sufficient debtor equity in the property for the Charge holder to justify the sale

- The intentions of the persons(s) who created the trust. The property is held in trust for all the beneficiaries by the named legal owner(s); and

The purposes for which the property is held. As an example this could be to provide a home for children as long as they chose to live there or for an elderly relative etc.

- The welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his/her home

- The interests of any secured creditor of any beneficiary

 

CPR 73.10 is outlined here:

 

73.10

 

(1) Subject to the provisions of any enactment, the court may, upon a claim by a person who has obtained a charging order over an interest in property, order the sale of the property to enforce the charging order.

(2) A claim for an order for sale under this rule should be made to the court which made the charging order, unless that court does not have jurisdiction to make an order for sale. (A claim under this rule is a proceeding for the enforcement of a charge, and section 23© of the County Courts Act 1984 provides the extent of the county court's jurisdiction to hear and determine such proceedings.)

(3) The claimant must use the Part 8 procedure.

(4) A copy of the charging order must be filed with the claim form.

(5) The claimant's written evidence must include the information required by the relevant practice direction.

 

Practice Direction 73 4.3

 

4.3 The written evidence in support of a claim under rule 73.10 must –

(1) identify the charging order and the property sought to be sold;

(2) state the amount in respect of which the charge was imposed and the amount due at the date of issue of the claim;

(3) verify, so far as known, the debtor's title to the property charged;

(4) state, so far as the claimant is able to identify–

(a) the names and addresses of any other creditors who have a prior charge or other security over the property; and

(b) the amount owed to each such creditor; and

 

(5) give an estimate of the price which would be obtained on sale of the property.

(6) if the claim relates to land, give details of every person who to the best of the claimant's knowledge is in possession of the property; and

(7) if the claim relates to residential property –

(a) state whether –

(i) a land charge of Class F; or

(ii) a notice under section 31(10) of the Family Law Act 1996, or under any provision of an Act which preceded that section,

 

has been registered; and

 

(b) if so, state –

(i) on whose behalf the land charge or notice has been registered; and

(ii) that the claimant will serve notice of the claim on that person.

 

Practice Direction 73 4.4

 

4.4 The claimant must take all reasonable steps to obtain the information required by paragraph 4.3(4) before issuing the claim.

 

The Trusts of Land and Appointment of Trustees Act 1996 (TLATA)

 

TLATA only applies to jointly owned property (Wells v Pickering HC, 17th May 2002). It was determined that the considerations of s14 & s15 TLATA to protect the welfare of children do not apply to solely owned property.

 

14. Applications for order.

(1) Any person who is a trustee of land or has an interest in property subject to a trust of land may make an application to the court for an order under this section.

(2) On an application for an order under this section the court may make any such order:

(a) relating to the exercise by the trustees of any of their functions (including an order relieving them of any obligation to obtain the consent of, or to consult, any person in connection with the exercise of any of their functions), or

(b) declaring the nature or extent of a person’s interest in property subject to the trust, as the court thinks fit.

 

15. Matters relevant in determining applications.

(1) The matters to which the court is to have regard in determining an application for an order under section 14 include:

(a) the intentions of the person or persons (if any) who created the trust,

(b) the purposes for which the property subject to the trust is held,

© the welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home, and

(d) the interests of any secured creditor of any beneficiary.

(2) In the case of an application relating to the exercise in relation to any land of the powers conferred on the trustees by section 13, the matters to which the court is to have regard also include the circumstances and wishes of each of the beneficiaries who is (or apart from any previous exercise by the trustees of those powers would be) entitled to occupy the land under section 12.

(3) In the case of any other application, other than one relating to the exercise of the power mentioned in section 6(2), the matters to which the court is to have regard also include the circumstances and wishes of any beneficiaries of full age and entitled to an interest in possession in property subject to the trust or (in case of dispute) of the majority (according to the value of their combined interests).

 

County Courts have jurisdiction to determine an application under CPR 73.10 only if the amount owing under the charge does not exceed the County Court Limit, currently £30,000. If the amount is higher the application must be made to the Chancery Division of the High Court.

[sequenci]

Certainly, although it's a bit of a double edged sword. For sure it's now a priority debt and needs to be treated as such. However, if you let the other creditors know they could think about trying to go down the CCJ+Charging Order route themselves. Tread carefully I guess.

[sequenci]

Exellent work.

 

Thanks sir, that means a lot considering what you've been through

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if an Interim charging order is registered at LR but this was never made final by the court, can this be removed in any way? The Interim order was done in 2003 but nothing after that.

 

This is a great question. I'm just off home so may need to research tomorrow. Are there instalments granted by the court on the judgment?

If the creditor has forgotten about the order I wonder if doing anything with the interim would 'remind' them of the judgment and get them to 'awaken' the process.

 

I'm going to reseach this first thing for you. Have you checked with the court to ensure that no further action was taken?

[sequenci]

no action since the judgment and no installment plan.

 

the bank did not accept an offer of 50% in full and final and nothing more was done.

 

it would be statute barred if it wasn't for the CCJ, which is due to come off next month (6 years).

 

Sit back until the six years period is over. Although there is no Limitation argument the rules of the court are VERY clear that enforcement action should be brought within six years and that only exceptional circumstances would allow a creditor to enforce after that time. There is plenty of case law that goes in favour of within six years.

 

I'm back in the office today, will try and research today although we are MAD busy at the mo!

[sequenci]

I was under the impression (from what I've read I hasten to say...) that once an interim charging order has been placed the court after agreeing to the placement will issue a hearing date for the full and finalised order... I didnt think it was up to the claimant to push this through unlike other enforcements.

 

This is my understanding too. It may be worth contacting the court to find out if this ever happened.

[sequenci]

Here is the CPR section:

 

Interim charging order73.4(1) An application for a charging order will initially be dealt with by a judge without a hearing.

(2) The judge may make an order (an ‘interim charging order’) –

(a) imposing a charge over the judgment debtor's interest in the asset to which the application relates; and

(b) fixing a hearing to consider whether to make a final charging order as provided by rule 73.8(2)(a).

 

 

There really should have been a hearing.... Strange!!!

[sequenci]

So the CCJ comes off next month (it was issued in July 2003), but the Interim charge will still be registered at the Land Registry.

 

The LR say it will only be removed if the debt has been paid and to provide proof of this and that it can stay on indefinately, i.e. there is no need to make it final. The court also say to pay the debt and have it removed.

 

Check with the court to see what happened to the application, if it was dismissed I think you would have grounds to get the caution removed at the LR.

[sequenci]

So if a debt is not paid but the CCJ comes off after 6 years, the creditor is not entitled to any money? I thought the debt never disappears (or becomes statute barred) because it has already been enforced with the judgment.

 

Do you have any links to the relevant case law?

 

The CCJ will fall off your credit file after six years, but the judgment remains and it would do until it is paid. It cannot become statute barred as (legal) action has already been brought.

 

The court system seems to feel that 6 years is long enough for a creditor to try for enforcement and it would be only due to exceptional circumstances that they would allow leave for enforcement after this time. Most forms of enforcement would require an additional hearing where the time delay could be raised. The only exception to this is the use of bailiffs but CPR Schedule 2 CCR Order 26, Rule 5 states that a creditor would need the court's permission to go down this route.

 

In the cases of Duer V Frazer [2001] 1 All ER 249 and Patel V Singh [2002] EWCA Civ 1938 both requests to enforcment after 6 years were refused.

 

If a creditor has previously attempted enforcement and then tries again after the six years it may get allowed - this was confirmed in the case of The Society of Lloyd's v Longtin [2005] EWHC 2492 (Comm)

 

Hope this clarifies that point

[sequenci]

Nope, not yet.

 

It is still not clear what can be done if a creditor hasn't chased a debt since judgment and it then falls off after 6 years

 

Since it never seems to become statute barred, they could potentially chase it after this time, maybe after 10 years or 20 years (the debtor is much older and won't fight back)? Where is the limit?

 

Well anyone can chase any debt forever. Just because a debt is statute barred it doesn't stop it being able to be chased. Of course it would be an unfair practice for a creditor to do this but it's not illegal.

 

If a creditor wishes to try and enforce a judgment after six years they will need to have a damn good reason why!

[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?

[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).

[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.

[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.

[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!

[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

[sequenci]

Here is a link to another useful thread on Charging orders I have kept to hand, maybe you may find this useful for info too.

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/160126-watch-out-charging-order.html

 

For the record, the rules didn't change.

[sequenci]

Sorry to but in with another question, but looking at my paperwork, the interim charging order was updated to a final charging order at the land registry five days before the final charging order hearing. How is that possible?

 

It shouldn't be

[sequenci]

Sorry to jump in but is it possible to have a charging order removed if it transpires that an alleged debt is unenforceable anyway? I am not sure this has truly been answered here...How can this be done? Please help!!!

 

You can make an application to set the judgment aside which, if sucessful, could then discharge the charging order.

[sequenci]

The process is outlined within the first post. You're quite right, MBNA would need to have obtained a CCJ before they can apply for a Charging Order. You may wish to double check to ensure that there is no judgment.

[sequenci]

How is it possible that someone can have a CCJ and know nothing about it?

Is this legal? Dont they have to inform you that they are taking you to court to give you an opportunity to defend?

 

BF

 

You should receive notification of any claim in the post. Unless you have moved or the mail doesn't get delivered it would be unlikely you wouldn't know.

[sequenci]

It's likely that some creditors will send notification to your previous address, or linked addresses, rather than your current one. You are right in not putting anything past them.

 

Yeah, that can be a little naughty. If this happens, and you can demonstrate that you have informed the creditor of the correct address previously, you would have a right to apply to set the judgment aside. If you didn't inform the creditor of an address change they are well within their rights to serve notice at your old address as this would be the one that you were last 'known' at.

[sequenci]

Well, I've learned how they managed to finalize a charging order before the final charging order hearing. It seems that to finalize a charging order as an agreed notice, only the original CCJ is needed to convince the land registrar that the claim is valid! An agreed notice also seems better protected than a charging order, so why bother with the hearing at all?

Easy peasy, just go to the Northampton Bulk Court, get a CCJ then use it for an agreed notice, then an order of sale. No wonder more and more of the utility companies are getting into dealing properties!

 

I'm not sure that is right.

 

The land registry would be informed of the interim charge which places the restriction on the property. The whole reason for the final hearing is for the court to decide whether or not to make it final. If this is not how it's happened then maladministration has occured and you should investigate a formal complaint.

[sequenci]

Can interest be added to a CCA (card) debt once a charging order has been finalised, even though the judge stated that no interest was allowed (as it is a CCA debt)? I have one where the debt buyer is stating the balance is increasing by 8% interest as they are allowed to by the CO regulations, overriding the CCA regs. Are they right or trying to take me for a ride?

 

There are no regulations which specifically mention interest on charging orders. If the 8% they are claiming is statutory interest they cannot claim is as this is banned on CCA regulated judgment debts in accordance with the county courts (interest on judgment debts) order 1991

[sequenci]

That section reads:

 

(4) Subject to the provisions of this Act, a charge imposed by a charging order shall have the like effect and shall be enforceable in the same courts and in the same manner as an equitable charge created by the debtor by writing under his hand.

 

Not sure where interest comes into it...

 

Are we talking a credit debt here? was it a loan / credit card etc? If so then you should quote s2(3)(a) The Couty Courts (Interest on Judgment Debts) Order 1991 which reads:

 

3) Interest shall not be payable under this Order where the relevant judgment—

(a)is given in proceedings to recover money due under an agreement regulated by the Consumer Credit Act 1974