Charging Orders - discussion

[sequenci]

Which were originally described a " unsecured", and both should be a last resort and this should be be the law.

The law allows further enforcement of a judgment debt, it's important to consider that a creditor should be allowed to have the ability to take further action via the courts if an agreement defaults - so long as the action taken is reasonable and proportionate.

 

However I also think that there should be a greater duty on creditors to accept reasonable repayment arrangements where it is clear the debtor is in financial difficulties. I REALLY like the Scottish Debt Arrangement Scheme as it's binding on all creditors, prevents further enforcement AND freezes interest and charges. The creditors will get all their money back, it might just take a little longer.

 

Incidentally, charging orders do not exist in Scotland either. A creditor can, however, register an 'inhibition' which means that the debt has to be paid as and when the property is sold.

 

Perhaps the judicary/government should look in to increasing the maximium allowable for Administration Orders to £15,000?

[Cadbury1879]

The law allows further enforcement of a judgment debt, it's important to consider that a creditor should be allowed to have the ability to take further action via the courts if an agreement defaults - so long as the action taken is reasonable and proportionate. QUOTE

 

Further, enforcement, no!! The creditors manipulate the current legislation to obtain a C/O. In our case obtain a CCJ and refuse a offer payment, in our case on a Personnel loan. Then apply for a C/O . This route is to coerce debtors to pay. They are not interested in fairness or the particular circumstances. So IMO the system stinks.

Despite our circumstances at the time, loss of job etc and offering to pay around 60% of the original contractural payment,creditor took this route. Wrong wrong wrong!

Ok I have seen on another forum a case of a women who lost 40k with a builder or someone? She had taken court action & been offerd £2 per month. Consumer, in reverse and I have sympathy. However, the vast majority of cases are CCA debts . The policy, is not to enforce a judgement debt, but to carry out a policy to intimidate.

Cad

[Ganymede]

The law allows further enforcement of a judgment debt, it's important to consider that a creditor should be allowed to have the ability to take further action via the courts if an agreement defaults - so long as the action taken is reasonable and proportionate. QUOTE

 

Further, enforcement, no!! The creditors manipulate the current legislation to obtain a C/O. In our case obtain a CCJ and refuse a offer payment, in our case on a Personnel loan. Then apply for a C/O . This route is to coerce debtors to pay. They are not interested in fairness or the particular circumstances. So IMO the system stinks.

Despite our circumstances at the time, loss of job etc and offering to pay around 60% of the original contractural payment,creditor took this route. Wrong wrong wrong!

Ok I have seen on another forum a case of a women who lost 40k with a builder or someone? She had taken court action & been offerd £2 per month. Consumer, in reverse and I have sympathy. However, the vast majority of cases are CCA debts . The policy, is not to enforce a judgement debt, but to carry out a policy to intimidate.

Cad

 

 

Imagine if everyone defaulted on their loans if they knew nothing would happen and they'd never get taken to Court.

 

The Court process needs to remain the way it is otherwise no bank would ever lend!

[Cadbury1879]

Hi

I agree with a court process, and a route for creditors to obtain there money, including me.

What I don't agree with is the court system being used to bully creditors with so called " unsecured " CCA debts changed to c/o s. Also there is no clarity on the process,

No minimums, no case law seems to count and now a change again. I also have seen a OFS for 5k, it was thrown out but only if the creditor pays exactly as ordered.

The law needs to change, and have a specific criteria.

[AndyOrch]

 

The Court process needs to remain the way it is otherwise no bank would ever lend!

 

They dont anyway!!!!

 

Andy

[DuffNCustard]

It is entirely possible that the bullying and intimidation experienced by so many of us as creditors ruthlessly pursue a C/O is actually a 'side benfit' for the creditors. A secured debt is worth a whole lot more on the re-sale market than an unsecured one, the fact that we're trampled and battered in the process of their stampede to the courts, is to them an added, buy incidental bonus. They don't give a rats arse about us money money money is all that they're about.

[Cadbury1879]

Hi Duffncustard,

Fair point, I'm sure a so called secured debt, looks alot better on the accounts. Benefiting the creditors balance sheet, should not be part of what's reasonable and fair in collecting consumer debt though the courts though.

Cad

[DuffNCustard]

True and what sticks in my craw is that what is reasonable and fair seems to be largely disregarded - they are guidelines. The ordinary folks get ****ed on all the time, many ex debtors like myself now actively seek to avoid using the services of banks and certainly avoid credit like it were poison - strictly cash only now. Who knows if this number grows to many thousands we'll really wallop their bottom line good and proper. I note that the BOE is advising that banks need to build up their capital reserves - and that is after all that QE they've trousered. My money ain't going anywhere near them shysters. Its a long game but I'm patient!!

[asokn]

Despite our circumstances at the time, loss of job etc and offering to pay around 60% of the original contractural payment,creditor took this route. Wrong wrong wrong!

 

But why is it wrong for a person to expect to have their legal rights upheld in court? There's no reason why a creditor should accept 40% less than they are owed (and they *are* owed it because a judgment says so) just because the debtor can't afford to pay it back.

 

I suspect that most people would be up in arms if their legal rights were infringed and a court refused to give them any redress. A judgment is only as good as the enforcement it brings and I'll repeat that a CO really isn't a bad way for a debtor to have a judgment against them enforced.

[AndyOrch]

Citizens Advice is deeply concerned about the changes to charging order legislation. CAB evidence already shows that some creditors may use court action and enforcement of court orders inappropriately, and that such use of enforcement can be exacerbated by unsuitable court practice. Increasing numbers of bureaux are reporting that more courts are now making ‘forthwith’ judgments which require immediate payment in full, instead of instalment orders, even where debtors have fully informed the court of their inability to pay large instalments.

 

A ‘forthwith’ judgment means that the debtor is immediately in default of the court order and the creditor is able to take enforcement action. Where the debtor has equity in their home, a charging order will ensure that the debt will be repaid when the property is sold, either by the debtor themselves or following an Order for Sale. This new practice of many county courts and creditors results in very extreme consequences for relatively small debts:

 

That is the opinion of CAB

 

Andy

[asokn]

Increasing numbers of bureaux are reporting that more courts are now making ‘forthwith’ judgments which require immediate payment in full, instead of instalment orders, even where debtors have fully informed the court of their inability to pay large instalments.

This new practice of many county courts and creditors results in very extreme consequences for relatively small debts:

 

The CAB would say that, they are entirely one sided in favour of debtors and, in addition, are desperately trying to justify their continued existence in the light of severe funding cuts.

 

As for forthwith judgments, far too many debtors are, frankly, taking the mickey out of the courts and their creditor by making derisory offers of £1 per month against debts of thousands of pounds in the mistaken belief, often perpetuated on this forum, that the court will only order payments at the rate they say they can afford. That leads to the conclusion that the debt cannot be paid within a reasonable period and actually leaves the judge with no choice but to make a forthwith order.

 

As an extra point, how often in the experience just of members of this forum have we seen people post for the first time when a charging order application or application for an order for sale is made? How often have we seen people fail to respond to court claims, letters from the creditor or any other attempt to deal with the debt and only once the CO route is used does the debtor finally pull their head from the sand and start engaging in the issue? It's a hugely common occurrence and leads creditors to believe that only by taking action against property will they finally extract some cooperation from the debtor.

[AndyOrch]

And how often have we seen debtors try correctly to plead their case as advised to do so by all the regulatory bodies to reach an agreement or payment proposal to be ignored? Litigation commencedJudgment attained, payments commenced , fully acceptable by the creditor and yet they still make application to secure the debt by way of a CO.

 

Because the DJs allow it because they allow a forthwith judgment when its not required (particularly on smaller debts).Even the reference of the Mercantile case holds no water lately. Forthwith,s are the order of the day and a CO on top to boot even if you are in a payment arrangement and even if you are not in arrears.I appreciate that OFS are as rare as chicken teeth (at the moment) but that's not the point!

[Ganymede]

It is entirely possible that the bullying and intimidation experienced by so many of us as creditors ruthlessly pursue a C/O is actually a 'side benfit' for the creditors. A secured debt is worth a whole lot more on the re-sale market than an unsecured one, the fact that we're trampled and battered in the process of their stampede to the courts, is to them an added, buy incidental bonus. They don't give a rats arse about us money money money is all that they're about.

 

 

 

I'm sure every creditor would rather just be paid as per the agreement rather than have to go through the time and expense of Court action.

[DuffNCustard]

True but that agreement was made between 2 parties. Lines of credit were easily extended during the the early 2000's, basically if you breathed and could manage to sign a form or complete a simple online application you were awarded the credit. Then that agreement was sold in credit derviatives and hell knows what other sort of 'futures' speculation - the debt was an asset that could be leveraged many times over.

 

Came to an abrupt end and incomes of the debtors crashed through unemployment or reduced working hours leaving us unable to service the debt - seems to me that the majority of debtors do want to pay their debts but no matter how much our creditors rant and rave and jump up and down it is physically impossible to extract blood from a stone. When DCA's purchase debt they do so in great wodges - caveat emptor? Sorry Ganymede the DCA industry on 'second hand debt' is murky and frankly has a strong whiff of sulphur about it, the courts are used as Debt Collectors and supine Judges, that I once thought would seek to find the best judgement, balancing the petitions of BOTH parties equally, oft times merely nod through C/O applications.

 

I should add that my husband has tow CCJ's secured on our house - best thing that ever happened as it stopped all interest charges on the debt and ensured that the monthly payment were the same as Payplan were already making on his behalf. The process took nearly 18 months and I slogged hard for hours keeping Restons and HFC Bank on the straight and narrow. It was like trying to nail jelly to a plate, what with the veiled threats insinuations and downright nastiness, not a process I would wish to ever experience again.

[Cadbury1879]

Good points from Andy & Duff I agree.

Obvious that some posters are in the view that the creditors are right to take this stance.

So looking at this from there perspective, I see lots of reasons it's not to there advantage and hinders there aim of collecting there debt. Often the original CCJ and then the C/O slows the process of repayment.

1/ The debtor usually has a installment order after, (or before) the C/O. Very little that the creditor can now do.

The debtor now sits on the repayment, even if they could now pay more. Gain by creditor NIL.(apart from accounts?)

Better solution except reduced payment with a review after a period of time and then a charge.

2/C/o puts debtor into negative equity, can't move to improve circumstance so as above.

Gain by creditor Nil. Negative may have been able to settle or pay more.

3/C/o negative equity, debtor moves and rents.

Pays ongoing payment or decides on bankruptcy

Gain by creditor Nil. Negative as debt written off.

 

4/Debtor, is bitter by the experience of the process and continues with installment order even though circumstances have changed, and could pay more, and sell property and not settle as it's a restriction.

Gain by creditor NIL. Negative, as creditor may have payed more and settled upon Sale.

I'm sure there are many other scenarios. In truth as Duff has stated it's a rush to obtain a CCJ & C/O even if it is in the long term detriment of the Creditor, other factors at play here.

[Cadbury1879]

I'm sure every creditor would rather just be paid as per the agreement rather than have to go through the time and expense of Court action.

 

Perhaps you could have a word, with Greece,Italy and Spain.oh and Ireland aswell there agreements are looking a bit dodgy

[asokn]

Good points from Andy & Duff I agree.

Obvious that some posters are in the view that the creditors are right to take this stance.

So looking at this from there perspective, I see lots of reasons it's not to there advantage and hinders there aim of collecting there debt. Often the original CCJ and then the C/O slows the process of repayment.

1/ The debtor usually has a installment order after, (or before) the C/O. Very little that the creditor can now do.

The debtor now sits on the repayment, even if they could now pay more. Gain by creditor NIL.(apart from accounts?)

Better solution except reduced payment with a review after a period of time and then a charge.

2/C/o puts debtor into negative equity, can't move to improve circumstance so as above.

Gain by creditor Nil. Negative may have been able to settle or pay more.

3/C/o negative equity, debtor moves and rents.

Pays ongoing payment or decides on bankruptcy

Gain by creditor Nil. Negative as debt written off.

 

4/Debtor, is bitter by the experience of the process and continues with installment order even though circumstances have changed, and could pay more, and sell property and not settle as it's a restriction.

Gain by creditor NIL. Negative, as creditor may have payed more and settled upon Sale.

I'm sure there are many other scenarios. In truth as Duff has stated it's a rush to obtain a CCJ & C/O even if it is in the long term detriment of the Creditor, other factors at play here.

 

It's self evident that securing debts by way of charging orders is to the benefit of creditors. Otherwise they wouldn't do it to anything like the extent that they currently do! To argue that a CO gives little benefit to a creditor is manifestly absurd.

[Guest]

There were also other 'initiatives' out for consultation among which was the ability for a 'recognised' DMP provider like Payplan or CCCS to be able to IMPOSE DMP's upon creditors and also having the power to freeze interest. The banks involved in the consultation, as you can imagine, kicked-off big time about this. It went hand in hand with making it easy for a creditor to secure a debt - the sibject of this thread. Anyone out there got any more info on this?

 

not sure if this is most recent info, but select committee end of Nov '11 said:

'There is a need for the government to reconsider introducing the statutory debt management plan provisions in the Tribunal, Courts and Enforcement Act 2007, or consider introducing measures with a similar purpose. People in debt who engage constructively with their creditors, seek advice and pay what they can objectively afford should be protected against further collection or enforcement action and spiralling debts.' re Part 5, chapter 4 TCE?

Edited March 27, 2012 by Ford

[Cadbury1879]

It's self evident that securing debts by way of charging orders is to the benefit of creditors. Otherwise they wouldn't do it to anything like the extent that they currently do! To argue that a CO gives little benefit to a creditor is manifestly absurd.

You obviously cannot comprehend the complexity of the the discussion and are in a dillusion in believing that your point of view is the only one that has merit. Your inability to even look at the bigger picture rather sad.

[asokn]

Excuse me?

 

You have the audacity to criticise my intellectual ability but can't spell "delusion" or use it properly in a sentence?

Edited March 27, 2012 by asokn

[sequenci]

1/ The debtor usually has a installment order after, (or before) the C/O.

I disagree, most creditors are well versed in going for - and getting - forthwiths.

The debtor now sits on the repayment, even if they could now pay more. Gain by creditor NIL.(apart from accounts?)

some creditors request variations, some even consider further enforcement by other routes.

2/C/o puts debtor into negative equity, can't move to improve circumstance so as above.

Gain by creditor Nil. Negative may have been able to settle or pay more.

3/C/o negative equity, debtor moves and rents.

Pays ongoing payment or decides on bankruptcy

A creditor is guaranteed at least some of their money - at some point in the future.

4/Debtor, is bitter by the experience of the process and continues with installment order even though circumstances have changed, and could pay more, and sell property and not settle as it's a restriction.

Selling the property could encounter significant hurdles if there is a restriction - the housebuyers solicitors are unlikely to complete unless there are clear measures to address the restriction.

 

By the way, I'm not pro-CO's or anti them. I just like a decent balanced argument!

[asokn]

Unfortunately sequenci, your stance (reasonable and valid though it is) will almost certaintly mean that you have "failed to comprehend the complexity of the discussion". Much better to say "me hate charging orders. Charging orders bad" as this shows a well balanced and carefully considered intellectual position.

[loulabelle06]

my ex partner is on my house and the csa had stuck a maintence charge for 9,180.for his kids from old relationships.can someone please help as i want him off my house and full closure in my life.

[bugsy123]

Can anyone advise me please. If you are separated from your partner (unmarried)but it is a joint mortgage and they get a charging order on the property. When the property is sold can the company be entitled to take from the other partners share of proceeds. bugsy123

[citizenB]

Can anyone advise me please. If you are separated from your partner (unmarried)but it is a joint mortgage and they get a charging order on the property. When the property is sold can the company be entitled to take from the other partners share of proceeds. bugsy123

 

I dont think they can. It is my understanding if the mortgage is in joint names then only a restriction can be placed. Your partner is not responsible for your debts nor you theirs.