Restriction K's

[sequenci]

What if, instalments have been paid in this fashion without the formality of a court order? Can the above argument be used in principle?

Any views appreciated.

 

Perhaps you could argue it still holds a persuasive authority? It might be worth trying to vary the judgment to get an instalment order sharpish.

[Gaston Grimsdyke]

As a result of the case 'Mercantile Credit Co Ltd v Ellis in 1987', a CO application will not be allowed if instalments have been paid, post judgement. This is as long as the instalments are a formal arrangent via court order. At least thats my understanding.

 

What if, instalments have been paid in this fashion without the formality of a court order? Can the above argument be used in principle?

Any views appreciated.

 

You can try but it is very likely the court will still grant the final CO. What the judge may well be receptive to if instalment payments have been voluntarily maintained is to put a rider on the order that no Order for Sale proceedings are to be issued whilst those payments are to be maintained. You should also ask that, whether the final CO is granted or not, the court immediately makes a variation order to make the judgment payable by instalments to prevent any other enforcement proceedings being issued.

[eggboxy1]

As a result of the case 'Mercantile Credit Co Ltd v Ellis in 1987', a CO application will not be allowed if instalments have been paid, post judgement. This is as long as the instalments are a formal arrangent via court order. At least thats my understanding.

 

What if, instalments have been paid in this fashion without the formality of a court order? Can the above argument be used in principle?

Any views appreciated.

 

You have to do what feels best for you on this one, Clynite, but if the fact you having been voluntarily making repayments hasn't dissuaded the creditor from pursuing a CO and, as is most likely, a Court also granting the CO then (certainly as far as I would be concerned) I'd be extremely reluctant to continue paying anything above a token repayment afterwards.

 

You can, though, realistically forget an OFS ever proceeding as in your position it just isn't going to happen.

[Clynite]

Thanks for the replies - greatly appreciated.

I have tried to get an instalment order (May) It was for slighlty less than the current vol payment tho. This was flatly rejected and hence the court made the judgement payable forthwith. This has allowed them to make the CO app. This appears so convenient for them! In the meantime, they still accept my vol payments. There has been no interuption with these payments since original judgement - hence my query as to the Mercantile case.

 

Thanks

[Gaston Grimsdyke]

Thanks for the replies - greatly appreciated.

I have tried to get an instalment order (May) It was for slighlty less than the current vol payment tho. This was flatly rejected and hence the court made the judgement payable forthwith. This has allowed them to make the CO app. This appears so convenient for them! In the meantime, they still accept my vol payments. There has been no interuption with these payments since original judgement - hence my query as to the Mercantile case.

 

Thanks

 

Clearly the court made the forthwith order to enable the creditor to get a CO. There has been more of a propensity for courts to do this in recent years, no doubt linked to the proposal to change the law to allow charging order applications to issue whether there is an instalment order or not. This makes it even more likely that a final CO will be granted notwithstanding that you have made payments voluntarily, but you will have no difficulty persuading the court to make an instalment order immediately after granting the final CO.

[eggboxy1]

There has been more of a propensity for courts to do this in recent years, no doubt linked to the proposal to change the law to allow charging order applications to issue whether there is an instalment order or not.

 

I actually agree with you on this but I still think the main goal for the creditor in pursuing CO's is priority over other creditors for the debts owed. Given the stats Sequenci posted on creditors pursuing OFS it cannot be to pursue debtors to the bone in getting repayment quickly.

 

I have no insight into Clynite's current personal current finances, however, what concerns me is suggesting an instalment arrangement on the basis of no OFS being pursued. If he defaults on that then a creditor, possibly, could smell blood and may well see a much easier time pursuing the OFS in those circumstances.

 

My feeling is if offering the instalments doesn't prevent the CO then he should forget about offering them one to prevent an OFS. This is for three reasons

 

1. He can ask the Judge for a no OFS, due to his circumstances, without

offering any instalment plan to be linked.

 

2. Given his circumstances he is stratospherically unlikely to be in the 0.3%

range who are pursued for an OFS, anyway. (Especially if we take your

second point on "reputation issues" when you explained why creditors

infinitesimally pursue OFS's ).

 

3. If Hell does happen to get chilly and he is pursued for an OFS; then

an instalment offer can be made then to ward off the OFS (in the event

the creditor loses his mind and forgets the retired and disabled element)

 

As I've stated before; pursuing a CO, in my opinion, weakens the creditors ability to demand or collect payments so don't offer what you don't have to.

[hatesdebt]

Is there any further news on the rumour that a CO will not be granted on any single debt that is less than £25,000??

[the_shadow]

Is there any further news on the rumour that a CO will not be granted on any single debt that is less than £25,000??

 

Hmm wasnt that an election promise... you know...... the type they write in disappearing ink?

[Clynite]

eggboxy1

 

We are about to find out. The case is up soon. I will keep everyone informed. Thanks to all who have contributed to my woes. Sorry for hijacking the thread but, hope it has and will help others.

[hatesdebt]

Hmm wasnt that an election promise... you know...... the type they write in disappearing ink?

 

Yeh, would not surprise me.

Like the rumour that we would be put in line with europe, inasmuch that ccj's / defaults etc would only be for 3 years...

[Gaston Grimsdyke]

Is there any further news on the rumour that a CO will not be granted on any single debt that is less than £25,000??

 

Yes - scrapped following consultation.

[the_shadow]

Yes - scrapped following consultation.

 

[sigh] oh well it did have its good and bad points as Sequenci pointed out if memory serves.

 

S.

[Gaston Grimsdyke]

I actually agree with you on this but I still think the main goal for the creditor in pursuing CO's is priority over other creditors for the debts owed. Given the stats Sequenci posted on creditors pursuing OFS it cannot be to pursue debtors to the bone in getting repayment quickly.

 

I have no insight into Clynite's current personal current finances, however, what concerns me is suggesting an instalment arrangement on the basis of no OFS being pursued. If he defaults on that then a creditor, possibly, could smell blood and may well see a much easier time pursuing the OFS in those circumstances.

 

My feeling is if offering the instalments doesn't prevent the CO then he should forget about offering them one to prevent an OFS. This is for three reasons

 

1. He can ask the Judge for a no OFS, due to his circumstances, without

offering any instalment plan to be linked.

 

2. Given his circumstances he is stratospherically unlikely to be in the 0.3%

range who are pursued for an OFS, anyway. (Especially if we take your

second point on "reputation issues" when you explained why creditors

infinitesimally pursue OFS's ).

 

3. If Hell does happen to get chilly and he is pursued for an OFS; then

an instalment offer can be made then to ward off the OFS (in the event

the creditor loses his mind and forgets the retired and disabled element)

 

As I've stated before; pursuing a CO, in my opinion, weakens the creditors ability to demand or collect payments so don't offer what you don't have to.

 

A judge won't order an absolute bar on an OFS being issued - people's circumstances change. It will be down to the discretion of whichever judge hears any OFS proceedings as to whether the then circumstances merit an OFS or not. I can't see that the breach of any instalment order would make a creditor more likely to pursue an OFS; but what it would do is prohibit the creditor from doing that if he is already considering it. An instalment order would also, of course, prohibit any other enforcement being issued. Obviously if there is next to no chance of any OFS being issued in this particular case then it's academic anyway.

 

Most creditors get COs not to force a sale of the property, but to turn their debt into a secured one as a long term goal and, of course, to hike the price on any debt sale. They can charge a higher premium to debt purchasers for a secured CCJ than an unsecured one. For those creditors who don't sell their debt however, many still then crack on and enforce by other means and don't see a CO as an alternative to instalment payments. The only remedy not available to them once they have got a CO is bankruptcy.

[hatesdebt]

So you are saying that if they have a CO bankruptcy is not an option?

[Gaston Grimsdyke]

Bankruptcy is only for unsecured debts - so while they would not be precluded from going that route having got a CO, they would then have to give up that security in order to issue bankruptcy proceedings. Which defeats the object.

[hatesdebt]

Interesting, thanks

[eggboxy1]

A judge won't order an absolute bar on an OFS being issued - people's circumstances change.

 

A further reason, then, not to offer an instalment plan.

 

 

Most creditors get COs not to force a sale of the property, but to turn their debt into a secured one as a long term goal and, of course, to hike the price on any debt sale.

 

I take your point on this; but isn't this where we have to remind ourselves it is only the Judgement that is secured not the actual debt itself? A CO confers no guarantee of repayment and a Restriction no guarantee or priority either. So, in my opinion and bearing in mind how a lot of these debts are made up of obscenely high and compounded interest rates and massively absurd legal fees, I think we need to do a bit of fighting back to redress the very wrong that is going on here.

 

For those creditors who don't sell their debt however, many still then crack on and enforce by other means and don't see a CO as an alternative to instalment payments. The only remedy not available to them once they have got a CO is bankruptcy.

 

I think its fair to say other Enforcement methods are seen as useless by the creditor who goes after a CO. Therefore, they put themselves in weaker position to reclaim repayments. But it's only weaker if people understand that fact and don't feel pressured by the situation.

[hatesdebt]

"A further reason, then, not to offer an instalment plan. "

 

This is all very interesting.

Can you elaborate on the above please?

[Gaston Grimsdyke]

I think its fair to say other Enforcement methods are seen as useless by the creditor who goes after a CO. Therefore, they put themselves in weaker position to reclaim repayments. But it's only weaker if people understand that fact and don't feel pressured by the situation.

 

I don't think so. You said it yourself, a cogent reason for getting a CO is to steal a march on the other unsecured creditors; if creditor A doesn't bother getting a CO but creditor B does, then when there is only so much money to go around who is the debtor going to give priority to? Those with security. Charging Orders are the first port of call, not the last. And there is definitely merit from the debtor's perspective in making an offer to the creditor with the CO because ignorance is rife and a large number of debtors confuse CO proceedings with possession proceedings. So formalising an offer to a creditor with a CO puts the debtor in control of their property from their point of view, even if it is in fact artificial, and given the stress that debt problems create just the notion of being in control is priceless.

[eggboxy1]

I don't think so. You said it yourself, a cogent reason for getting a CO is to steal a march on the other unsecured creditors

 

That is correct, but I'm trying to press home the reality that the creditor really has no where to go (certainly for consumer credit debt) after stealing this march over other creditors. Therefore, people who have had a CO placed against them shouldn't fall into the trap of thinking that an OFS will automatically follow if they don't play ball and offer a repayment. As the stats confirm, its virtually zero any are pursued which is not a coincidence. It's because the creditor knows he has so little chance of getting one.

 

And there is definitely merit from the debtor's perspective in making an offer to the creditor with the CO because ignorance is rife and a large number of debtors confuse CO proceedings with possession proceedings

 

Where is the "merit" if, as you previously stated, a Judge won't totally bar an OFS? But you are right that about the confusion on what a CO actually is. Once that confusion is dispelled, however, then the debtor can have a better perspective on what is best for them and not what is best for the creditor.

 

So formalising an offer to a creditor with a CO puts the debtor in control of their property from their point of view, even if it is in fact artificial

 

Or more evidence why it is not in the interests of a debtor to be duped into making payments

 

given the stress that debt problems create just the notion of being in control is priceless.

 

I totally agree, that's why debtors need to understand their options better and do what is best for them to relieve stress. That being coerced into making repayments to creditors, on the false premise they will lose their home if they don't, is probably the first thing they should read up on and understand the facts about. Now that really is priceless.

[eggboxy1]

"A further reason, then, not to offer an instalment plan. "

 

This is all very interesting.

Can you elaborate on the above please?

 

I'm just pointing out the reality that if you don't play ball with a creditor after receiving a CO then there is very little a creditor can do. This is given the debt is for consumer credit and not, say, because you haven't paid your Council Tax as that would be a very different matter.

 

My objection is based on the unfairness of creditors being allowed to have charged high "unsecured" rates of interest and then, when problems occur, they have recourse to any form of "security" on a person's property.

 

It's both immoral and unfair, in my opinion, as the creditor has already been provided for on the "risk" element of non repayment in those high rates interest rates it charges ALL people who they provide credit for.

 

The creditor is wanting it's cake and to eat it and the Government is weak to allow it to persist.

[Cadbury1879]

"The creditor is wanting it's cake and to eat it and the Government is weak to allow it to persist."

"Quote"

Absolutely correct, an unsecured debt, should remain so except in certain circumstances.

The creditors have used these C/O route far to frequently

to put the fear of a "forced sale" as a collection tool of intimidation.

Having the benifit

[shazzyball]

Hi sequenci,

 

thanks for the reply regarding the law centre, have you knowledge of them in this matter? I will contact them

[eggboxy1]

shazzyball

 

Was anything uncovered about the Equitable Charge that shouldn't have been on your LR details?

 

(and let me know about the Law Centre ok as only up the road)

[OnMyWayOut]

What annoys me is that the creditor is granted the CO on unsecured debt to make it 'equitable' and then sells the debt on. By selling the debt for less than the CCJ amount it should lose that equitable status as they are no longer securing the debt against default, having sold it. The buyer hasn't paid the creditor the full amount and so the situation is inequitable now, i.e. it is secured to allow the buyer to make a profit, not to cover their losses.