Help please re. Charging order

[Toffee mints]

In short, my other half has rec'd a letter from one of LTSB's collection companies who have set a date to get a charging order on our property.

 

Just a couple of questions, as its her debt are they allowed to get an order on a joint property ?

 

Secondly, they are prepared to take a partial settlement. What sort of partial settlement could we offer on a debt of around £3000.

 

There have been no payments made for 18 months after job losses.

 

Thanks for any advice.

[UnitedFront]

OK firstly, what is the debt for (credit card/overdraft etc)?

Secondly, has the Original Creditor already obtained a CCJ against your partner?

 

In answer to your questions, I believe they can obtain a charging order against a jointly owned property, but I may be wrong... someone will come along and confirm this for you shortly.

 

With regards to a full and final settlement offer, I have always gone it at between 10 and 20% and see what they say. Others that have done this more often than myself will post as well, I'm sure.

 

More people will be along with advice shortly, but it might help people if you could scan in and post up the letter they've sent you (delete all personal details first)... that way people have more information on which to advise.

 

Hope this helps.

Cheers.

UF

[Toffee mints]

Cheers,

 

It is a credit card.

 

The letter says:

 

Further to our letter of equal date, enclosinga copy of the original interim charging order, entirely on a "without prejudice" basis our client is willing to accept a partial payment.

 

The letters include land registry details etc.

 

Thanks

[Deb T]

Just some different issues, a charging order if granted on a debt of your stated amount of 3k will not have interest applied to it which is a good thing and if the property is in joint names then at no point can your creditor apply to sell your house.

 

Which brings me to my main point, I do not see why LTSB would pursue a charging order under such circumstances, it is of no benfit to them...I rather think they're making the threat of going for a charging order in the hope that you will capitulate and give in to their bullying tactics.

 

Neither do you want a partial settlement, it does not clear the debt up and leaves the door open for them to come back again.

 

In my opinion I would offer a Full and Final Settlement at no more than 20% of the debt and at the same time as this I would also state that due to circumstances beyond your control and your current financial circusmtances you are not able (if you Full anf Final Settlement is not acceptable) to make much of a payment to them and ask them to accept a nominal fee of £1per month . As a double prong (depending on what the debt is) I would also request a CCA from them to keep them busy.

 

Also, if your debt is small which in comparison to some yours is and your home is worth a lot then it is possible to argue to the courts this point, there was a case

Robinson v Bailey (I'd have to look it up a little more) that had the same result.

 

In my opinion I do no think LTSB have any intention of going for the order but instead that the Collection agency is just playing scare tactics.

Who are they? as in the DCA

Edited January 18, 2010 by Deb T

[Toffee mints]

Its SCM Sols.

 

A provisional date for a hearing has been set for 22 Feb.

 

It does look as though they are willing to go thru with it.

 

So if I were to offer a full and final settlement of 15-20 % it may be accepted ?

 

Thanks for your reply.

[Deb T]

Provisional dates, and 'we may' yadda yadda yadda.....

 

This doesn't sound right to me.

 

I think you need to step back a little first. As stated I do not see of what benefit to the original creditor a 3k charge on a jointly owned property will have other than to secure the debt in total but ...

 

The usual process of obtaining a charging order is for the creditor to go to court re the debt, obtain a jusgement and then for you to fail in paying the judgement. As in the judge makes a 'forthwith' order giving you 28 days to pay...you can't pay which then leaves the door open for the creditor to apply for the charging order......

 

However, most judges give the debtor time to pay and will work with you to reach an amount to pay back to the creditor each month.....which is the more viable option and say for instance it was £10 a month...possibly with interest attached to it (the judgement amount) ...but if you maintain your £10 payments the creditor is not usually allowed to go on and obtain a charging order and the debt stays as a ccj. So you pay £10 on a 3k debt...you do the math in how long it will take for the debt to be paid back.?

 

If you don't maintain the agreed monthly amount the creditor can apply to the courts for a charging order. However, in your case you state that the house is jointly owned (presumably by way of a mortgage?) this (the jointly ownd bit) in essence disallows the creditor to ever apply for the house to be sold......and given that your debt is under the limit set of I think it's 5k where a charging order can gain interest then as stated previous there is zero benefit to the creditor gaining a charging order and in my opinion and if you look up the Robinson V Bailey case if your equity is worth substantially more than the 3k charging order and given it's a jointly owned property it is possible that no charging order can be placed on your property anyway...In which case it will be a pointless exercise by the creditor and a costly one at that....which is why I do not think it's going to happen (my opinion)

 

If the dca are playing silly buggers simply send them a CCA request to keep them busy and in the meantime speak to LTSB direct and see what you can arrange with them. It may be that their collections centre are prepared to take a reduced amount from you anyway. But only offer what you can afford.

 

For a full and final then I would pitch it at about 20% but not to the DCA but to the creditor direct....this 'partial settlement' is not worth the paper it's written on.

 

Any settlement needs to be a FFS full and final settlement.

 

Seriously, it does sound as if SCM Solicitors are trying to bully you by way of counting on your ignorance.

 

As for what 'may be accepted' I have settled for less with a creditor, for me it's all about how you write to them and how you set out your stall and in some cases who you send the letter to. Simply sending it to the Brighton collections centre re LTSB will probably get you nowhere and will just hit a collection agents desk and a simple 'nope' and sent back. Personally speaking I would phone them, speak to a manager of the customer services or similar or get a name and then write to them direct.....

Edited January 18, 2010 by Deb T

[Toffee mints]

The letter says

 

"Our clients application is due to be heard before the district judge in chambers at 10.00 onn 22 Feb.

 

There is an official copy of register of title enclosed.

 

If it is heard on 22 Feb can I state why it shouldn't be charged to our property ?

 

Thanks a lot

[hammyhound]

Right, can we start again.

 

As Deb said did your OH receive a CCJ on this and has he/she defaulted on any instalment payments.

 

I think this application for a CO could be real. **** are very famous for issuing applications left, right and centre. Did the hearing date come from the court and if so can you scan it up minus your personal details. Could you possibly check with the court if this is case.

 

Come back we need to know some answers before replying.

 

HH

[underdog13]

Any updates on this?

[jimbo45]

Hi there

unless you are likely to burn your house down it is 99999.99% certain that no court will order a Forced Sale for a debt of certainly under 5,000 GBP. I've checked and there have only been THREE in the last few years and these were due to the owner of the property likely to damage it severely to avoid paying.

 

I'd just sit there --in some cases you could be better off with a Charging order --I know thois sounds "treasonous" on this board but a) there is no more interest, b) you DON'T have to PAY ANYTHING until the house is sold and even then first charges such as Mortgages are paid first.

 

These DCA's who go for charging orders are being too greedy by half as this is an INCREDIBLY LONG TERM waiting game before they get their money.

 

Offer them 15% and explain that way they get their money quickly -- otherwise it could be possibly up to 50 years before you sell the house.

 

Don't worry about Credit References --if it's got this far you probably won't even THINK of wanting credit again --once you get into that mindset then these companies have no leverage over you ever again.

 

In recent years the Charging Order route has been grossly overdone -- it's essentially a SCARE tactic and is an INCREDIBLY LONG TERM WAIT for the DCA / OC to get their money back if at all --especially if there is negative or very little equity in the house.

 

If you play this right you can get a decent F&F settlement --but whatever you do don't go for the Partial settlement.

 

The Courts rightly refuse to go for forced sale on smallish amounts of Credit card debts. Over 20- 25,000 GBP then that's a different issue.

 

Cheers

jimbo

[underdog13]

Don't some charging orders include payment instalment arrangements as well though? Miss a payment, they go for order of sale.

[jimbo45]

Hi there

I've never seen one of those -- The Charging Order simply turns an "Unsecured debt" like a Credit card into a "Secured one" so a Creditor can attempt to get some money back if and when you do sell an asset like a house.

 

As I said before NO COURT will order a forced sale for relatively small amounts of debt.

 

IMO also the Charging Order possibility should be stated on the original CCA --of course it's not and there are literally 100,000's of property owners out there who don't realise that for them there really is no such thing as "UNSECURED CREDIT" anymore.

 

I think your best bet is still to try and get a F&F settlement --but DON'T GET SCARED OF THESE BULLIES.

 

Cheers

jimbo

[underdog13]

I've tried a F&F - they won't budge; want the whole debt plus their costs so far

[underdog13]

if they get a full and final, and it's so high to have to pay in instalments, won't they get a charging order anyway?

[jimbo45]

Hi there

In this case you have TWO choices.

 

1) Fight the Charging Order -- I'm not sure how successful you'd be but you could turn up at court and offer to pay these people 1 or 2 GBP a month if thats all you can afford or

2) Let it run and wait for them to make the next move.

 

If your debt is under 5,000 GBP then they CAN'T ADD INTEREST on to the charging order.

 

If you also have anybody living at the property then the Forced sale option is totally a no no so just sit back and perhaps try again in a few years to offer another F&F.

 

Seems to me that in this case they really HAVE become too greedy by half.

 

Another tactic is before the CO is to re-mortgage the house so even if they threaten forced sale then they won't GET ANYTHING. If you don't need the money released by the re-mortgage then stick it into a Savings account of a totally separate BANK ACCOUNT (often called a parachute account).

 

Cheers

jimbo

[underdog13]

Great idea, jimbo, thanks.

 

I do think eventually someone will bring a case on the unfairness of householders not being warned that their home is at risk if payments are not kept up on unsecured debt. Roll on that day!

[hammyhound]

By the way, I have since found out that if the debt is solely in your name and the house is in joint names only a restriction can be put on the property and a solicitor only has to inform them of the sale and send no money.

 

A charging order is not paid by instalments, you already pay by instalments on your CCJ, the CO is only there to protect them payments should you default.

 

HH

[hammyhound]

The OP seems to have disappeared off the face of the earth!!!!

[harrassed senior]

Not really, this is an old thread and nothing from OP since January 2010!