Help!!! Mum Imposed Charging Order!

[Gracie99]

Hello All,

 

I am new to this site & I hope someone or a few of you on here may be able to assist me.

 

Approximately 12yrs ago, I bought my current home with my mum (ex council property, right to buy). She was unable to obtain a mortgage on her own and I offered to buy the property with her, as I lived with my mum & my younger brother. A couple of years later, my mum moved out to be with her now husband and I 'bought' her out.

 

My mum wanted half of the equity that was available at the time, £7,500. I was not in a position to pay it there and then, so my mum imposed a charging order against the property, which I agreed... thinking that I would have to pay it when I re-mortgaged or sold the property, which ever came first.

 

Unfortunately, my partner at the time (later married & divorced!) left me with a multitude of financial difficulties, which had a negative impact upon my credit rating. I then borrowed £2,500 from my mum to assist with some debts that my ex-husband left me with, which was then added to the charging order, bringing the total to £10,000.

 

Five years ago, I met someone else and he came onto the mortgage with me (I was unable to take on the mortgage in my sole name due to the bad debts). Since being with my new partner, we have tried to sell the property (to no avail) and have attempted to re-mortgage on several occasions, all in a bid to try to pay my mum off. My mum raises the issue every few months and she frequently monitors our lifestyle (we rarely go out, we don't drink or smoke, but as soon as we do anything, it is held against us!).

 

In 2010, my mum enforced interest repayments of £500 per annum against me (5% of the total debt), which are due on the 31st December every year. I felt that it is not assisting me in reducing the debt so I recently suggested paying her a monthly instalment plan in order to clear the debt (£90pcm), with a view to clearing £1000 a year, with a very small amount of interest, followed by a lump sum payment of £5000 in 5 years time when my financial situation will be vastly improved. Bearing in mind, my creditors for other outstanding loans receive less than that per month and no longer charge me interest! My mum refused; she basically wants a lump sum. She is going to pay £2500 of it to my brother as his inheritance; apparently, the house (that I have paid towards every month for the last 12yrs) is my inheritance!!!

 

Sorry to waffle on, but I thought I would give you as much background as possible without going into too much detail!

 

So, my questions are as follows:

 

Do I have to pay interest (even though I stupidly agreed to it for a quiet life)? Or would the interest only apply to the £2500 loan and not the £7500 original charge?

 

Can she enforce the charging order, even though my other creditors have not imposed a charging order and are happy with the payment plans I have with them? Where do I stand if she does try to enforce payment in a lump sum?

 

Am I within my rights to offer monthly instalments/payment plan as per my other creditors? Do I have to pay anything at all? Where do I stand in the eyes of the law having offered monthly payments to reduce the debt?

 

Where do I stand legally, given that I have tried to sell my property, I have tried to re-mortgage (even with my partner as a joint re-mortgage) and I have even tried to get a loan to pay her off?

 

My mum sees this as business transaction and somehow manages to separate it from our personal relationship. However, I see it as personal, seeing as the monies owed are to my mum and she makes it personal by commenting on my life and by actually being very spiteful at times!

 

Any advice/help/suggestions would be greatly appreciated.

 

Huge thanks

Gracie99

[Bandit127]

Despite her odd relationship with money, she is still your Mum and you are still her daughter. I think you need to have it out with her and get this sorted...

[Gracie99]

Thanks for your reply, but I have tried that. She just becomes incredibly personal and uses anything I may have spent my money on over the last few years as 'ammo'!

 

I haven't spoken to her for over a week now and she has said that if I don't reply to her last email, she will have no choice but to persue other options... i.e. legal action!

 

I am not refusing to pay her the £10,000 that I owe; I just feel the £500 per year interest is excessive, particularly as none of that comes of the balance! By the end of this year, she will have already had £1000 from me without a penny of it coming off the balance.

 

Additionally, she has already had £15000 from me when I re-mortgaged several years ago with my ex-husband (she was entitled to £22,500).

 

What is it they say about not being able to choose your family...!!!

[DuffNCustard]

You have to treat this as business just as your mum does - have you considered a formal solution such as an IVA? You owe her a lot of money and you need to figure a way of paying it back in a 'business-like' way.

[Gracie99]

It is very hard to treat it as a business transaction when it is with your mother, particularly as she makes it all very personal and has actually been very spiteful.

 

I do not wish to go to the route of an IVA, as I have not needed to with the other debts and do not want it held against me. I arranged payment plans with my other creditors, which they are all satisfied with and I have been paying them without issues for the last 5-6yrs. A couple of them have come to end, which has allowed to me to increase payments on the other outstanding debts and to also offer my mum a monthly repayment plan, which she has refused.

 

My mum seems to want either a lump sum payment (which I am unlikely to be in a position to do, unless I can sell the house) or just interest only payments. Following my suggestion to her of £90pcm in order to clear £1000 off the outstanding balance each year, she said I could pay £1000 per year but £500 would be interest and £500 would come off the debt! That's a 50% interest rate!!!

 

I think my mum is being very unreasonable and is not treating it like a business transaction at all.

[Mike_hawk]

Family issues aside, and assuming this relates to a voluntary charge....... how is your mother enforcing an interest bearing term?

[Gracie99]

That is correct Mike, it is a voluntary charge. My mum was due £22,500 after she moved out; at the time I was only able to raise £15,000 via re-mortgaging and the remainder (plus the £2,500) was placed as a voluntary charge. My mum felt she required a guarantee that she would receive the money.

 

in 2009, she insisted on having the interest of 5% per annum included in the charge. I agreed at the time, but more so in order to keep the peace. I wish I hadn't now...

 

I am now legally bound to pay her £500 per annum; or 5% of the total balance (if it reduces). I do not pay interest to my other creditors, as it is frozen. My mum says she cannot 'afford' to do that. I pointed out to her that she wouldn't be losing anything, she just wouldn't be gaining as much out of me. She would still receive the £10,000 owed to her.

[Gracie99]

I also had to pay half of the solicitors fees in order for my mum to have this additional condition of the charge... I am fairly certain she should have incurred all of the legal fees, as she was insistent upon the charge & it's criteria.

[Mike_hawk]

Oops........ I think you may be stuck with it

 

I suppose you could remind her that without your original investment there would have been no equity in her favour to argue over. Failing that I'm not sure there's much you can do without upsetting the applecart altogether.

[Gracie99]

That's what I thought... I was trying to appeal to my mum's softer side, being her daughter and all!

 

I just want to make an indent into the balance, rather than just this interest only payment scheme she seems to want!

[Surfer01]

Don't you need a credit licence to be able to charge interest etc?

[Mike_hawk]

Without sight of the agreement I would imagine it's drafted to perform as exempt.

 

Just hope mum is reporting the income on her self assessment