Charging Order Court Advice please

[thescorpion]

I know this might be a late posting but I wonder if anyone out there can tell me if a charging order can be asked for if the original order does not specify that I have to pay the amount they say is due 'forthwith' or within a specified time, i.e. 14 or 21 or 28 days, or in instalments of a specified amount?

 

This order was made in 2007 and after appeals etc., only three weeks ago I received a printed form from the creditors asking me to complete my income and expenditure, and this is the first time I have heard of Mercantile Credit co ltd v Ellis.

 

Surely I should have been in default of an order before they were able to obtain a charging order.

I really now want to have this charging order removed on the grounds that I was never ordered to make any payments.

 

Can anyone advise please ?

[sequenci]

Hi there, if the judgment is forthwith they can go for the charge if you've not paid the full amount by the due date. A forthwith judgment = no instalments so there is no help from the mercantile credit case.

[thescorpion]

Thank you for your reply. The Order of 2007 does not say 'forthwith' nor does it ask that I make payments. It just says that judgement in the sum of £ , plus costs of £

 

Look forward to hearing from you.

[thescorpion]

SEQUENCI ...

 

You haven't replied to my last posting and wonder if it is an unusual situation and you don't have an answer to it. Look forward to hearing from you.

[Mrs E Blackadder]

Even if a charging order was granted, you will not be forced to sell the house.

What the charging order means is that when you decide to sell your home, that

the amount owing from the charging order must be paid after the mortgage and

any second charges have been paid. So if you never sell the house, the order will never be used.

 

 

 

 

This information is only partially correct.

 

If a charging order is placed on your property, you can be forced to sell it if the creditor sees fit to apply to the court to force the sale. HOWEVER, it is unlikely that with small children in the house, any judge would allow a forced sale. This can change though once your youngest child reaches the age of 18. Also, a forced sale is unlikely to be granted if you have little to no equity in your property as the creditor would be unlikely to receive their money.

 

I know all this because I am in a very similar situation to yourself, with charging orders on the property which actually belong to my ex. None of the creditors have gone for a forced sale as I have children, but once the youngest reaches 18 I suspect they will wait no more!

[thescorpion]

Thank you Mrs Blackadder, but I think it's my fault for not setting out my question very clearly. I will try to do it again.

 

1. I had a loan with a bank which, unbeknown to me, sold it to another company.

2. This new company issued a claim against me in the Northampton Bulk Centre to which I replied with a Defence.

3. It eventually went before a Deputy District Judge who gave them judgment against me, but the Order only says that Judgement is given in the sum of £.....

4. They then issued an Interim Charging Order following by an application for a Full Charging Order. The judge who granted the Full Charging Order was a different judge, and he did not ask that pay any money, either in a lump sum or in instalments (and neither did the original judge).

5. I have only lately come across the case of Mercantile Credit co ltd v Ellis.

6. My question is: As the original Order did not ask me to pay either a lump sum forthwith or by a certain date, nor did it ask me to pay in instalments, can I ask that the Charging Order be removed from my property as I was never in an instalment situation. I believe the Mercantile case does not allow a charging order if instalments have been met, but as I have never been asked by a Court to pay anything, either forthwith or in instalments, I believe they were wrongly given a Charging Order, although I did not know of this Mercantile case at the time otherwise I would have objected to it on the grounds that (a) the original Order did not specify that I pay forthwith or in instalments, and the Claimants never applied to the Court that I should do so.

 

Can you offer any suggestions as to how I can ask for this Charging Order to be remove

[Mrs E Blackadder]

As you are by no doubt now aware, charging orders are notoriously easy to have applied and nigh on impossible to get removed, which is why a lot of creditors go for them. It is their way of making an unsecured debt a secured one and being fairly certain they will get their money back. (Interestingly, and I don't know if this might apply to you, it is possible that my home will be repossessed. If it is, then there is likely to be a shortfall which means that the Charging Orders will not get repaid! Not sure where my ex stands on this one, but it does mean the orders will become unsecured once more.) As far as I remember, my ex was given the opportunity to pay the debts off somehow, either in a lump sum or in installments before an application for the charging orders were made, but he chose to ignore all correspondence. After the full application was made, no chance was given to pay anything other than the full amount to clear it. Does this make more sense to you? Hope I have explained it clearly.

 

I would recommend a free half an hour with a solicitor who specialises in this sort of thing as they will be able to tell you exactly where you stand and whether or not you have any grounds for removal. I suspect though that he only way you will be able to get it removed is by paying the full amount back.

 

My expericence with charging orders has been a mixed bag, but the one thing that has stood out is just how difficult they are to get removed.

[sequenci]

SEQUENCI ...

 

You haven't replied to my last posting and wonder if it is an unusual situation and you don't have an answer to it. Look forward to hearing from you.

 

Sorry for the delay, I'm not always able to get back to people quickly as I'm currently looking after my other half who is very sick.

 

Does the judgment ask you to pay by a certain date?

[thescorpion]

Link have tried this with me.

 

Have you received statements from them?

 

Hello Trumpetmaest

 

I am now going to get apply to have a charging order removed and was interested in your case with Link. May I know the date of the hearing of your case, the names of the parties, and was it in Cardiff County Court?

 

I have never had an order to pay either a lump sum by any date or instalments.

 

Would appreciate your urgent response. Thank you.

[thescorpion]

Sorry for the delay, I'm not always able to get back to people quickly as I'm currently looking after my other half who is very sick.

 

Does the judgment ask you to pay by a certain date?

 

Hello, I've just sent another message about this matter and have only just noticed your posting. The answer to your question is No. It just says judgement in the sum of £...., plus costs. I was not ordered to pay this sum by a particular date nor was I asked to pay in instalments. I have been told that I should report them to the Office of Fair Trading as they applied to have a charging order before they applied for an instalment order.

[sequenci]

Hello, I've just sent another message about this matter and have only just noticed your posting. The answer to your question is No. It just says judgement in the sum of £...., plus costs. I was not ordered to pay this sum by a particular date nor was I asked to pay in instalments. I have been told that I should report them to the Office of Fair Trading as they applied to have a charging order before they applied for an instalment order.

 

I doubt they have.

 

The original instalment order is something that a court can give you under their own discretion. It seems like the court have requested a forthwith judgment , which is something they are more than able to do.

[bradfordlad]

Don't know if it's common knowledge, but here's a link to a really useful and important thread over on MSE's forum.

 

I already knew this from another source, but good to see it written down.

 

Charging Order? The myth - MoneySavingExpert.com Forums

 

Hope it helps with a bit of peace of mind?

 

BL

[Knackered]

Yes it is Bradfordlad BUT, is it correct, I cannot seem to get this info confirmed.

 

This is an answer I got on another forum which is being further clarified by the author.

 

It is quite true that the INTERIM charging order places only a restriction on the property at the land registry in the name of the debtor. And if the property is sold before the order is made final - or the creditor doesn't carry on to make the order final - then that is what it remains - a restriction. Providing the creditor does not get his order made final before it is sold and the letter is sent - it can be sold.

 

However the interim order can and most probably will be made FINAL. The moment it is made final the joint tenancy on the property, if that is what it is, is irrevocably severed and the owners become tenants in common. The charge is then on the equitable interest of the debtor not on the beneficial interest. It is therefore a charge and secured on the property whatever the poster on the forum says. It is only if it is not made final that it is a restriction.

 

 

So, I am still in the dark and a bit...:confused:

 

 

I then found this on another forum...

 

 

http://www.bllaw.co.uk/pdf/financeandrecoveries_0806_charging%20orders%20on%20property.pdf

 

 

Sorry about the lack of copy and paste skill but here it is....

 

 

CCR

The growth in personal debt,

together with property prices, has

meant that charging orders have

become a popular debt recovery tool.

A creditor obtains a judgment against

a debtor and then a charging order on

the debtor’s property. A number of

creditors, particularly in the finance and

debt purchase sectors, having converted

an unsecured debt to one with some

security, sit back and wait for the debtor

to pay the debt off as and when the

debtor tries to sell the property.

Unfortunately, sitting back and waiting

for payment carries a number of risks:

A mortgagee with an earlier charge

on the property might repossess and

sell the property at a time when there

is insufficient equity in the property to

pay all or even part of the debt to the

creditor.

Property prices might go down,

wiping out any equity in the property.

If the original judgment does not

attract interest – as could be the case

for debts less than £5,000 or given in

proceedings relating to the Consumer

Credit Act 1974 – the value of the debt

will be eroded over time by inflation.

Some creditors will perhaps apply for

an order to sell the property rather than

wait and take the risks.

However there is another, more

fundamental, risk which creditors are

beginning to come across in respect of

charging orders obtained after April

2003. Where a debtor owns property

with another person, for example

husband and wife, the debtor and the

other person can, despite the charging

order, easily sell the property and pay

nothing to the creditor.

Before April 2003

Once a charging order was obtained

against a debtor over his interest in a

property, whether he owned it solely or

jointly, the charging order was registered

as a caution at the Land Registry. This

meant that the creditor or his solicitors

would get 14 days’ notice from the

Land Registry that the debtor and other

owner or owners were trying to get rid

of the caution, probably with the aim of

selling the property.

The fact that such notice had to be

given meant that a debtor knew he

could not sell the property before the

creditor knew about it and took steps to

prevent the sale. So the debtor would

usually pay the creditor before selling

the property.

Cautions which were registered prior

to April 2003 still remain effective and

the creditor will get 14 days’ notice of

any attempt to get rid of the caution.

April 2003 and afterwards

The Land Registration Act 2002 (LRA)

and Land Registration Rules 2003

(LRR) introduced significant changes to

land registration procedures. Cautions

were no longer to be used. Instead

when a creditor obtained a charging

order against a debtor:

If the property was solely owned by

the debtor, or all owners of the property

were debtors, for example husband and

wife owning the property jointly and

being joint debtors, then an ‘agreed

notice’ was to be filed at the Land

Registry by the creditor.

Effectively this was almost as good as

having a mortgage. The debtor could

not realistically sell the property without

repaying the debt to the creditor.

However, if the property was jointly

owned by the debtor with other non-

debtors, for example husband and wife

owning the property and only one of

them being the actual debtor, the creditor

was not entitled to enter an agreed notice.

Instead the creditor could only file a

‘restriction’ at the Land Registry in the

following terms: “No disposition of the

registered estate 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 [creditor...]

being the person with the benefit of

an interim/final charging order on the

beneficial interest of [name of... debtor].”

This restriction was, and remains,

practically useless.

The effect of the restriction

The debtor and his joint owner’s freedom

to sell the property is not affected by

such a restriction. They could sell the

property as if there was no charging

order against the debtor. All that was

required was that the new buyers or

their solicitor write to the creditor

informing them that they now owned

the property and then confirm to the

Land Registry that they had given that

notice. Then the buyers could register

the property with no further complications.

The creditor, who is sitting back,

waiting to get paid, instead just receives

a letter confirming that a sale has already

taken place, typically a week or two after

the sale so there is little they can do to

get the debt paid.

In theory the creditor could apply for

a freezing order against the debtor to

try and obtain the cash from the sale

proceeds. However, most creditors will

never make such an application:

The cost of applying for such a

freezing order would run into thousands

of pounds.

The debtor might have spent the

cash from the sale of the property

before the freezing order was obtained

so there is little, if anything, for the

freezing order to bite on.

An effective restriction

A restriction worded as follows would

provide a creditor with sufficient

COLLECTIONS

Are your charging orders

worth waiting on?

What to ask your DCA

Look-a-like collection letters

Effective debt collection

US debt purchase warning

In association with

CCR

 

 

 

 

COLLECTIONS

CCR

protection: “No disposition of the

registered estate is to be completed

by registration without a certificate

signed by [name the creditor with the

benefit of the charging order and their

address], being the person with the

benefit of an interim/final charging

order on the beneficial interest of

[name of judgment debtor], or his

solicitor that he was given written

notice of the disposition at least 14

days prior to the disposition or without

an order of the court which granted

the interim/final charging order.”

If the wording suggested above were

to be allowed, a creditor would have the

right to be notified before a sale. The

fact that such notice has to be given

would mean that a debtor will know he

cannot sell the property before the

creditor finds out about the potential

sale – and of course takes steps to

prevent the sale until the debt is paid.

So the debtor will pay the creditor

before selling the property.

Perhaps at some stage, the LRA will

be amended to allow such an effectively

worded restriction. In the meantime, a

that the Land Registry must allow that

wording.

Application to the Land Registry

The Land Registry may approve an

application to allow a restriction in

non-standard wording if it appears:

That the terms of the proposed

restriction are reasonable, and

That applying the proposed restriction

would be straightforward, and not place

an unreasonable burden on him.

In our view, the Land Registry should

allow a restriction which actually gives

some protection to creditors. However,

we have yet to make such an application

and suspect that the Land Registry will

not readily allow such non-standard

wording.

Applications to the court

If the Land Registry refuses to allow a

non-standard word restriction, then a

creditor may wish to consider making

an application to the court.

Inevitably there are risks with this:

Creditors should bear in mind that

WHEN IS A CHARGE

NOT A CHARGE?

Charging orders on property made since April 2003

may well be useless, following on from changes to

Land Registry procedures allowing debtors to sell their

houses without paying anything to their creditors

By Sadak Miah and James Britton

CCR

 

What is the final verdict on these bloody charging orders??

 

 

Fecking Banks :-x

 

 

 

 

Edited March 3, 2010 by Knackered

[hatesdebt]

Interesting - worth a bump...

[Knackered]

Bum p:)