Charging Orders - procedure and process

[Dahlia M]

Hello all

 

I have a lot of practical experience of the Charging Order process from the creditor's perspective, and I'd be more than happy to provide advice and guidance to anyone who is faced with the prospect of having an application issued against their property. If you need any info on the process itself, the documentation, Court hearings etc. then please ask away and I'll do my best to help

[citizenB]

I think a lot of people would be very interested in knowing how an unsecured debt can so easily become a secured debt.

 

I think you have already started to provide some information, perhaps you could start the ball rolling and people can jump in with questions

[citizenB]

One question I would like answered please, is..

 

Where a property is jointly owned - can the person not subject to the claim object to the charging order and on what grounds.

[Ganymede]

One question I would like answered please, is..

 

Where a property is jointly owned - can the person not subject to the claim object to the charging order and on what grounds.

 

 

 

Sorry for butting in and hope the OP doesn't mind but yes they can, that is why they are served with a copy of the application and notice from the Land Registry.

 

Grounds for opposing are things like it would prejudice them etc.

 

However, I have dealt with literally hundreds of CO applications and have never seen a joint owner succeed.

Edited September 13, 2013 by Ganymede

[MaximusMeridius]

Hi

If the Charging Order is granted how easy would it be for the creditor to force the sale of my house if I miss a payment. Is it automatic or is it back to court for another hearing?

[Dahlia M]

Ganymede put it in a nutshell about the ability to object. Anyone who has a registered interest in the property can object if they want to, and they ALL have to be served with copies of the application and Land Registry documents in order to make them aware of the application, therefore they all have the opportunity to object. I have processed numerous CO applications, for sole and joint owners, with a roughly equal success rate (success from the creditor's point of view).

[Dahlia M]

Maximus - it's back to the Court for another hearing. No Order for Sale would be automatically granted by the Court. You would have the opportunity to lodge arguments against the application and they would have to be considered by the Judge. Of course there is also the question of proportionality - i.e. would the Court see fit to grant an Order for Sale when the debt is relatively small? There are a lot of circumstances to take into account in each individual case.

 

However, I would stress that the first step is to try to avoid a CO being made in the first place - and the way to go about this would depend on whether or not the process has already begun...

[Dahlia M]

I think a lot of people would be very interested in knowing how an unsecured debt can so easily become a secured debt.

 

If you have debts and you have assets - be very careful. In my experience of carrying out litigation on behalf of creditors, if the debtor defaults on a payment plan, and they have an interest in property/land, the creditor is highly likely to take further steps to secure the debt - even if this means they cannot get their hands on the money for quite some time!

 

Once a creditor has obtained a County Court Judgment they have a number of enforcement options available to them - and if they know that you have an interest in property they are highly likely to go for that as security.

[citizenB]

Maximus - it's back to the Court for another hearing. No Order for Sale would be automatically granted by the Court. You would have the opportunity to lodge arguments against the application and they would have to be considered by the Judge. Of course there is also the question of proportionality - i.e. would the Court see fit to grant an Order for Sale when the debt is relatively small? There are a lot of circumstances to take into account in each individual case.

 

However, I would stress that the first step is to try to avoid a CO being made in the first place - and the way to go about this would depend on whether or not the process has already begun...

 

I would appear that MM has only just received a letter from the claimant to say that they are going to apply for a Charging order now that they have won their original claim.

 

So what should he now expect to happen.

 

From what I read above posted by you and Gannymede, all parties involved, presumably that means the 1st mortgage provider, and both MM and his wife should receive notice that a CO is being applied for, yes ? What happens next

[Dahlia M]

Yes, the debtor must be served with a copy of the application and other relevant documentation to advise them that the application has been lodged with the Court. The creditor must also provide copies of the same documentation to ALL other interested parties (mortgage co, other secured lenders, anyone else with a financial interest in the property). Once this has been done the creditor has to send documents to the Court called Certificates of Service, as evidence that they sent copies of the application to all interested parties. If they fail to provide you with copies of the application documents then the Judge can strike out their application (i.e. bin it!) as they did not follow correct procedure.

 

It is always worth contacting the creditor and/or their solicitors first, though, just to see if there is any way of holding off the application and working out a settlement of some sort.

[Dahlia M]

There are TWO parts to the CO process: Interim and Final. Interim Charging Orders are granted automatically by the Court. All the relevant parties are notified of this and sent a copy of the Interim Charging Order, which the creditor will then register at the Land REgistry. However, this is only the first stage. Once an ICO has been granted, the Court will set a date for a hearing to determine whether a Final Charging Order should be granted. You will have at least 21 days notice of the hearing, which is enough time to prepare your case against the granting of an Order. This is where you will need advice tailored to your particular circumstances. You must attend the hearing. The Judge will consider your arguments and make a decision. It may be that a further Order is granted but on certain conditions rather than a simple yes or no.

[MaximusMeridius]

Forgive me for saying but that still doesn`t explain the point that I think citizenB is making about an unsecured loan with its higher Apr suddenly becoming a secured loan?

[Dahlia M]

I'm afraid all I know is that once a CCJ has been obtained a creditor is entitled to begin the charging order process. Sorry if that doesn't help

[Dahlia M]

I can't give debt advice, only info regarding County Court processes and enforcement issues.

[MaximusMeridius]

Sorry I wasn`t having a dig. I was just wondering if I could use this argument at my hearing.

[AndyOrch]

I think you need to look at it from another angle Maximus...its an unsecured loan secured against your property...you are not making any payments against that debt as such via the CO... that is through your judgment.

 

Regards

 

Andy

[Dahlia M]

Exactly. It is still unsecured at the moment. It will only become secured if and when a charging order is granted by the court following the judgment that has been obtained.

[AndyOrch]

Its only the execution of the judgment that is secured.

[Ganymede]

Forgive me for saying but that still doesn`t explain the point that I think citizenB is making about an unsecured loan with its higher Apr suddenly becoming a secured loan?

 

 

 

You need to try and get your head around the concept that it is not the original loan that is being secured against the property, but the CCJ which replaces the loan agreement.

[MaximusMeridius]

I understand what your saying ( I think) but I have not defaulted on the original ccj. I can see why they would go for a CO if I was not paying the CCJ but the only reason I can see for them going down this route at the moment is so that they can use it as a stick to beat me with.

 

They were not happy about the amount I had to pay back each month, will they be able to use this stick to try and get more I wonder?

[AndyOrch]

I understand what your saying ( I think) but I have not defaulted on the original ccj. I can see why they would go for a CO if I was not paying the CCJ but the only reason I can see for them going down this route at the moment is so that they can use it as a stick to beat me with.

 

They were not happy about the amount I had to pay back each month, will they be able to use this stick to try and get more I wonder?

 

No

[Ganymede]

The law changed last October and there is no need for the debtor to default on the CCJ instalments to apply for a Charging Order any more.

[Guest]

and, since then, if there is an Instalment Order in place (along side a CO) there can be no enforcement (ie sale) re the charging order if there is no default in the instalment order; 'The charge may not be enforced unless there has been default in payment of an instalment under the instalments order.' s93 Tribunals, Courts and Enforcement Act amending the CO act.

Edited September 15, 2013 by Ford

[AndyOrch]

and, if there is an instalment order in place (along side a CO) there can be no enforcement (ie sale) re the charging order if there is no default in the instalment order. 'The charge may not be enforced unless there has been default in payment of an instalment under the instalments order.' s93 TCE act amending the CO act.

 

[the tinkerman]

http://www.consumeractiongroup.co.uk/forum/showthread.php?402807-Nationwide-got-CCJ-tried-before-to-get-CO-judge-blocked-it-they-now-say-they-can-as-law-changed-help!r

 

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?403107-Charging-Order(1-Viewing)-nbsp

 

 

Hi All

 

Been following the above threads with interest.

 

Just going to tell you of my experience regarding a CCJ unsecured debt being turned into a C/O.

 

Had a CCJ granted in 2000 for 10k court ordered payment £5 per month

 

CCJ then sold twice last time sold 2002 and was to carry on making my payments to same solicitor which I did.

 

2011 DCA decided I was not paying enough and asked first to be substituted as the new claimant (even though they obtained the CCJ back in 2002) as the CCJ was STILL in the original creditors name, and even though I argued the toss over the length of time it had taken the DCA to do this the Judge granted the substitution no problem at all.

 

The DCA then took no time at all in applying for a variation order and a C/O and after several hearings, and carefully constructing my defence and what was deemed to be the law relating from assignments to when a C/O can be granted and about the APR on the original unsecured loan being 50% and who it their right mind would get a secured loan with a APR that high and is that fair to then turn it into a secured loan, but unfortunately ALL my defence fell on deaf ears.

 

The only thing I did get in my favour was the fact that the variation order was not granted, but the C/O was even though my payments were bang up to date (never missed one payment) AND my C/O was granted the year before the new law regarding C/O came out in Oct 2012 and yes I did bring up that I had never missed a payment an case laws (Mercantile Credit vs Ellis) again all fell on deaf ear AND FOR DEFENDING IT I GOT HAMMERED FOR COSTS AS WELL

 

So there you have it folks that is my experience and believe you me experience counts for allot when you’re in court with these people.

 

What I did learn from all of this was their seems to be NO consistency whatsoever between Judges and what one Judges perception or interpretation of the law seems to be is completely different to another’s as in the case of greenk04 and his Nationwide thread Where the Judge denied the claimant a C/O and even doubt if they will get it a second time even though the law has now changed as going off what then Judge said when he denied them a C/O in the first place who says that he or another judge will now change there mind just because the law has now changed, that said who knows as dx once quoted to me JUDGES LOTTERY!

 

I thinks more Clarity is what we need, I know CitizenB brought up the point about the law changing in Oct 2012 regarding C/O being applied for automatically and thinking that this will only apply if a claim has been issued after that date in relation to greenk04Nationwide thread and in the thread relating to Maximusmeridius thread Charging order he further stated that:

Before 1 October 2012

 

If the creditor applied for or was given a CCJ before 1 October 2012, they can only apply for a charging order if the CCJ says you must pay:

the whole debt immediately or by a certain date, called a forthwith judgment, and you haven't done this; or

 

by instalments and you’ve missed one or more payments.

 

If the creditor applies for a charging order when you haven't broken the terms of the CCJ, go to the hearing where the charging order is made and show evidence to the judge that you have kept to the terms of the original court order.

 

Well my question being is there anyone out there that has challenged this issue yet in court and won or is just another case of a judge’s lottery and down to what their interpretation or perception of the law is.

 

 

Tinks