Charging Orders

[jetli]

Hi all need your help AGAIN.

 

Reluctanly have sold our home of 17 years and all progressing very quick.

 

 

We are looking at renting (if we can!)

Problem being is we have 3 charging orders on our home and not enough equity to clear them.

 

 

2 are in my Husbands name and 1 in both names.

 

 

Spoke to the Solicitor yesterday and I suggested I contacted the Companies to offer a final settlement which will not be anywhere the amount they have claimed.

We are not going to come out of the house with a whole chunk of change so need as much as possible.

 

 

Also I worry that the sale might not go through if we cant pay them off.

Then with the 2 suspended repos on the house we may lose it anyway.

 

 

Any help and advise even rough templte letter for these Companies would be helpful.

[Killerschick]

The one in joint names you will probably have to pay unless you have some grounds to challenge the judgment which led to the charging order. Even then it's a long process and may not be resolved in time for your sale to go through.

 

Assuming the house is in joint names and held as joint owners rather than tenants in common then you DO NOT have to pay those which are only in one name.

 

If they are registered as Cautions they will be over-reached by two owners selling as trustees (if your conveyancer doesn't know what I'm on about tell him to look into it).

 

Alternatively, if they are recent they are likely to be Restrictions the terms of which will be detailed on the land registry records. Usually the terms of the restriction require notice to be given to the restriction holder before any dealing with the property but that is ALL. Once notice has been given to the creditor the conveyancer just needs to confirm this to the land registry to get the restriction removed.

 

Most coveyancers acting for sellers are unaware of this and are so anxious to give good title to the purchaser that they want to settle anything registered against it.

 

The reason that the sole named charging orders do not require payment (assuming your property is not held as tenants in common) is that they only create an equitable interest in the property not a legal interest. The holder of an equitable interest has no interest in the property itself so cannot prevent its sale and will be wiped from the register when a new owner is registered.

 

It might help to show this to your conveyancer and they can look into it for themselves (the land registry should be happy to confirm any of this).

 

Obviously the debts will still be owed but once you have sold your home and are settled there are plenty of others on here who can give you great advice about challenging them.

 

Hope this helps

 

KC

[jetli]

Thanks for that and yes we are joint owners. The Solicitor just done my head in by saying we have to pay them off and if we dont then the new owners might back out etc etc. So I should not write to them and offer a settlement?? even though it would only be a small amount?? Obviously as said we wont get alot left out of the sale anyway. The joint charging order is minimum so can cope with that. Would it help if I post up the wording on the land registry ommiting my Husbands name etc???

Edited March 10, 2010 by jetli

[mercyblue]

Just to clarify killerschick post I assume that killerschick is to referring to a standard restriction K in regards to a beneficial interest charging order. The joint order is against the legal title.

 

"A charging order made against the interest of a sole proprietor who is the sole beneficial owner of the land, or expressly made againstjoint proprietors ‘as trustees’, is a charging order against the legal estate"

from Practice Guide 19 - Notices, restrictions and the protection of third party interests in the register Appendix A

 

If I am incorrect kilerschick please advise.

[Killerschick]

Hi again,

 

Spot on Mercy Blue. I did indeed mean a Form K restriction (although I had forgotten that term and had to look it up) which would be worded as follows:-

 

Form K (Charging order affecting beneficial interest – certificate required)

No disposition of the [registered estate or registered charge dated [date] is to be

registered without a certificate signed by the applicant for registration or his

conveyancer that written notice of the disposition was given to [name of person

with the benefit of the charging order] at [address for service], being the person

with the benefit of [an interim]or [a final] charging order on the beneficial interest

of [name of judgment debtor] made by the [name of court] on [date] [Court

reference…].

 

 

So all the conveyancer needs to do to satisfy the terms of the restriction is notify the creditor that they are going to be registering the transfer of the property then they can provide a certificate to the land registry to this effect to have the restriction removed.

 

 

When completing the RX3 http://www1.landregistry.gov.uk/assets/library/documents/RX3.pdf to have the restriction remove at section 9 they would say that they have given notice to the creditor as required by the restriction and in support could show a copy of the letter sent.

 

 

In all likelihood the creditor will not be very happy and will object but I have never known of a creditor being successful in preventing the removal of their restriction (even in cases where the conveyancer has screwed up, not noticed the restriction and then lied about having given notice to the creditor!).

[jetli]

Thank you that is exactly the way it is put on the deeds, how then do I get my Solicitor to understand about handing over what little will be left from my Husbands part of the money? Will print out the land registry bit you have posted up and copy and paste to word document what you guys have wrote but will this be enough as running out of time.:-? Oh and as the land registry document sooooo long which part do I need to print?

[hobon]

Hi

 

I am in the same position and my lawyer will not act -how did you go?

[confusedbunny]

The one in joint names you will probably have to pay unless you have some grounds to challenge the judgment which led to the charging order. Even then it's a long process and may not be resolved in time for your sale to go through.

 

Assuming the house is in joint names and held as joint owners rather than tenants in common then you DO NOT have to pay those which are only in one name.

 

If they are registered as Cautions they will be over-reached by two owners selling as trustees (if your conveyancer doesn't know what I'm on about tell him to look into it).

 

Alternatively, if they are recent they are likely to be Restrictions the terms of which will be detailed on the land registry records. Usually the terms of the restriction require notice to be given to the restriction holder before any dealing with the property but that is ALL. Once notice has been given to the creditor the conveyancer just needs to confirm this to the land registry to get the restriction removed.

 

Most coveyancers acting for sellers are unaware of this and are so anxious to give good title to the purchaser that they want to settle anything registered against it.

 

The reason that the sole named charging orders do not require payment (assuming your property is not held as tenants in common) is that they only create an equitable interest in the property not a legal interest. The holder of an equitable interest has no interest in the property itself so cannot prevent its sale and will be wiped from the register when a new owner is registered.

 

It might help to show this to your conveyancer and they can look into it for themselves (the land registry should be happy to confirm any of this).

 

Obviously the debts will still be owed but once you have sold your home and are settled there are plenty of others on here who can give you great advice about challenging them.

 

Hope this helps

 

KC

 

With regards to sole debt and joint ownership. Is there a difference regarding not paying or having to pay off a debt with a "restriction" if you are "tenants in common" or "joint owners"? i.e. if its sole debt,joint owners and you are tenants in common then you would have to pay debt off out of sale proceeds then?

[confusedbunny]

bump bump

[gprit]

Not sure if this helps but I came across this relating to death - so I would think that yes - if you are tenants in common you would have to pay debt off out of proceeds. Having said that it is unusual for this to be the case.

 

 

Tenants in Common

 

 

• In this case, if there are debts, then the deceased person's share of the house would be used to pay off the debts. After the debts are paid, the person's share of the house goes to whoever they left it to in a will. If there is no will, then there are set rules for who will be treated as next of kin and inherit the estate.
  

How to checkTo find out whether you are Joint Tenants or Tenants in Common,

you would need to contact the Land Registry to see if any restrictions on inheritance or "succession" were registered.

 

 

You can also check with your original conveyancing solicitor to find out.

The joint owner of the property could come to an arrangement to pay off the deceased's debts to stop the house being sold.

They may have to take over the mortgage, or take out a new mortgage to keep the house.

This would be particularly important if they are living in the house, or are going to inherit the person's share of the house.

[gprit]

A question of my own: Property in Joint names - debt in sole name (mine). Had a Final Charging Order against me late July, although in effect it is only a 'Restriction' and of no practical use to the Claimant. However, I have now received a letter from Claimants (NatWest) Solicitors asking for my proposals to repay the amount owing. My suspicion is that they may seek to enforce the 'Charging Order' and sell the property to meet their debt. They do not seem to realise that it is NOT a charging Notice but a RESTRICTION.

My concern is that neither did the Judge at the hearing. If they apply for repossession on the grounds I cannot pay the debt, how do I convince a court that the they do not in fact have a charging order?

[eggboxy1]

gprit

 

You do still have a Charging Order. But a CO against a sole debtor on jointly owned property can only be registered as a Restriction as it is registered against your "Beneficial Interest" in the property not on the property itself. .

 

And the Creditor having a CO doesn't stop them from pursuing repayment by other means, either. However, the problem for the Creditor having obtained a CO is that it's virtually impossible for them to obtain an OFS for consumer debt as courts have much wider discretion and, if the property is your main residence, then it's a no goer.

 

I've argued on other threads that a creditor going to these lengths is primarily trying to prioritise THEIR debt over other creditors as a CO is even settled before Bankruptcy debts. But once they do this they, IMHO, back themselves into a corner as they, realistically, have nowhere else to go?

 

My Ex hasn't spoken to her creditor since the day she received her CO over a year ago (despite the initial "further enforcement" threats). Nothing has happened because they won't waste money on something they aren't going to win.

[gprit]

Many thanks for that information.

[jetli]

Hi

 

I am in the same position and my lawyer will not act -how did you go?

 

Sorry for delay this all happened over a year ago! Joint one had to be paid - Single one fell down to a CCJ as before. You have to get all info and shove it under Solicitors nose it has to basically give the creditor no time to respond so the later the better. He has to act in your best interest. Mine took abit of convincing but was amazed at what she learnt from it all and thanked me so she could do the same for others! Good Luck just stick to your guns.

[eggboxy1]

Sorry for delay this all happened over a year ago! Joint one had to be paid - Single one fell down to a CCJ as before. You have to get all info and shove it under Solicitors nose it has to basically give the creditor no time to respond so the later the better. He has to act in your best interest. Mine took abit of convincing but was amazed at what she learnt from it all and thanked me so she could do the same for others! Good Luck just stick to your guns.

 

Can I ask how the creditor on the single debt reacted (if at all) when you sold up?

[jetli]

Can I ask how the creditor on the single debt reacted (if at all) when you sold up?

They didnt say anything as they were still covered by CCJ - this is what happens it falls back down to a CCJ so they still get the money all be it over a very long term!! But atlease they dont take the equity out your house and you keep that to try and move on

[eggboxy1]

They didnt say anything as they were still covered by CCJ - this is what happens it falls back down to a CCJ so they still get the money all be it over a very long term!! But atlease they dont take the equity out your house and you keep that to try and move on

 

I understand that's what happens I was just wondering if they made any kind of objection? I, also, wouldn't be so quick to assume they are saying nothing because they have a CCJ (unless you are still making repayments to them?)

 

Whilst a CCJ technically doesn't expire, it does drop off your credit file after six years and if you haven't been paying anything to the creditor they don't waste further effort or money chasing you again.

[jetli]

I understand that's what happens I was just wondering if they made any kind of objection? I, also, wouldn't be so quick to assume they are saying nothing because they have a CCJ (unless you are still making repayments to them?)

 

Whilst a CCJ technically doesn't expire, it does drop off your credit file after six years and if you haven't been paying anything to the creditor they don't waste further effort or money chasing you again.

 

They had no time to object but still paying CCJ as dont want anymore hassle! If someone can say that they wont chase on a CCJ considering we have moved and dont know our new address then I might stop paying them as they were rouges!

[eggboxy1]

They had no time to object but still paying CCJ as dont want anymore hassle! If someone can say that they wont chase on a CCJ considering we have moved and dont know our new address then I might stop paying them as they were rouges!

 

If you sold up and gave them no time to object, but are still paying the CCJ, then they aren't really going to be too concerned as you are paying them anyway?

 

I understand the "no more hassle" concern but if they were rogues why would you want to pay them now you have moved?

[cups]

I know this is a long time ago since this thread was updated, but just wondering about tenants in common, one party has 90% interest, the other 10%, how does the one with 10 % stand with a full CO??? The CCJ went to full CO which is registered as a restriction on that parties interest? Is it better to be tenants in common in these circumstances??

Views appreciated, sorry for hijacking thread!!

[smokejumper]

Can anyone answer this question.

 

I have an interest only mortgage on my property and is the same value as the property ie; no neg or pos equity. £230000.

 

My partner wants to move in and pay off £100000 of the mortgage.

 

Do I get property put in joint names and will she be liable for my debts and if house is repossed at anytime will she be liable for mortgage.

 

I guess mortgage is a loan given to me but house is security. so therefore the original loan will be reduced to £130000,

 

I know this is a long time ago since this thread was updated, but just wondering about tenants in common, one party has 90% interest, the other 10%, how does the one with 10 % stand with a full CO??? The CCJ went to full CO which is registered as a restriction on that parties interest? Is it better to be tenants in common in these circumstances??

Views appreciated, sorry for hijacking thread!!

[Terence123]

Hi I wonder if anyone can give me some advice I have had a debt with Black Horse that set off at £10,000 and now is £12 I have been paying £ 5.00 a month for around 4 years I have never missed payment they have now sold the debt to DLC my circumstances haven't changed and now they have said they want to take a charging order.

 

' It is our intention to get a County Court Judgement then applying for a charging order...... We feel this is entirely valid and the Charging Order is for security only and there is no intention to make an order for sale or to use it as a leaver to make you make payments you cannot realistically afford.'

 

My wife who suffers with COPD in the form of Bronchiectasis and Alpha 1 was admitting to hospital unable to breath as soon as the shock hit her.

 

The debt is in my name and the mortgage is in my name we owe about what the house is worth on a good day and the DSS pay Interest only on the mortgage.The house is in poor condition as maintenance has been a struggle since on JSA.

 

MY youngest daughter has offered to sell her car to make a payment to try and get them to stop so her Mam isn't made any worse.

 

Could anyone advise the implications of the Charging order and is what they are saying true.

 

Secondly is it worth trying to negotiate with them on the phone as the last time I spoke I got a terrible one who wouldn't listen at all.

 

My daughter thinks she might be able to raise £5000 on her car and credit card.

 

Is there any minimum amount they could go for an order for.

 

I am worried I write something that makes it worse.

 

Any help would be really appreciated.

[Terence123]

Just to add we would like to hang onto the house

[eggboxy1]

Terence123

 

Firstly, you aren't going to lose your house if a Charging Order is granted as it is your main residence and there is now case law that prevents an enforced sale under these conditions. So don't worry on that matter.

 

The implications regarding Charging Orders also depend on a couple of factors; the first being if your house is registered in your sole name or if it is jointly owned with your wife. If it is registered in your sole name then the Charging Order is "charged" against your Land (or property) and is required to be paid off when you sell the house, out of the proceeds of the sale, or the Land Registry will block the sale by not allowing a new owners registration.

 

If the house is jointly owned, however, then a Charging Order is quite different in that the Charging Order is made against the debtors "Beneficial Interest" (or their share of any equity in the property). Under these circumstances there is no legal requirement to pay off the debt from any proceeds from a house sale if you sell your property and the Land Registry is not prevented from changing the details of ownership. Therefore, this type of Charging Order is very weak security for the creditor who has taken steps to secure a Charging Order (but only if the debtor is armed with this information and have a look here for some more info MSE)

 

A couple of words of caution, however; if you are taken to Court regarding a CO then you need advice to ensure that Interest is not added to the debt by the Judge (its not allowed on Consumer Credit debt but many don't know the law on this!) You won't (or are extremely unlikely to) prevent a Charging Order but seek advice from Sequenci on here if it gets to that stage.

[Terence123]

Hello again I have done as recommended but they phoned me on Monday and are trying to get us to reach a full and final settlement my son in law has said he would settle for us they have said the best they will do is 25% and have sent a letter to that effect. I obviously do not want to have the son in law pay more than necessary but I have read on here lots of people get a lot more discount should we just go for this to get rid of them or if I push them will they just withdraw the offer. I would be grateful for any help.

Thank you