Charging Order and Court Interest

[lionbait]

Hi All,

 

Sorry if you have already seen this...I have reposted this as I think I put it in the wrong place first time.

 

I took out a large unsecured loan with my former mortgage company to help us consolidate our debts about 7 years ago..(yes..first mistake [or misadvised] of many I now realise!)

 

When we realised that we had come into serious difficulty in paying our creditors about 3 years ago we went through the CAB to set up IVA's (on their advise) with all of our major creditors.

 

The company with whom we had the large loan (24K) and the mortgage applied for a CCJ and charging order against the property...which was duly granted by the court.

 

Our suggested payment of £59 pcm was accepted by the court and we paid it monthly ontime by standing order. We got monthly statements showing £0.00 interest and the payment of £59 taking the total gradually down.

 

When we sold the property and tried to pay off the debt they added "court interest" at 8% pa for the duration of the charging order (that's over £160 pm) therefore adding an unexpected £6000 to the amount we needed to pay.

 

Surely they can't do that??? and how can the courts allow this to happen?

 

Please can anyone help with advise on what to do next to get this money back as I feel it has been taken by deception.

 

Many thanks

[yaffsimone1]

This has come off the HM Gov website:-

 

Interest

If a creditor has taken the debt to the County Court, they cannot usually add extra interest once a charging order has been made. Interest cannot be added if:

• The debt is for an agreement regulated by the Consumer Credit Act. This includes most ordinary credit agreements, including bank overdrafts; or
  
• The debt is less than £5000 in total even if it is not covered by the Consumer Credit Act.

This is all i can find at the moment but i have only been looking for about 30 seconds, it does say 'they cannot usually' so there could be circumstances for them to add extra interest. I will look into it a bit more.

 

Im sure a someone will be along soon with a bit more knowledge.

 

Have they already taken the extra £6000?

[lionbait]

Thanks for your help...

 

They have already taken the money because we had to pay off the charging order when we sold the house a month or so ago.

 

We had to pay them before the solicitor would release the rest of the equity to us.

[lionbait]

They hcarging order says that they can add the interest as it's over £5000 debt...

My real gripe is that they sent us statements with zero interest shown so we had no idea that they were adding it on.

[ted22]

Hi

 

what you need to consult is The County Courts(Interest on Judgment Debts) Order 1991

[rippedoffagain]

They hcarging order says that they can add the interest as it's over £5000 debt...

My real gripe is that they sent us statements with zero interest shown so we had no idea that they were adding it on.

 

Can you clarify this comment please. The original CCJ should be the amount you pay, as far as I am aware. Did the CO specifically allow interest, or is this the creditor saying so?

[Steve40]

Hi i recently had 2 charging orders put on my property , i had heard about the interest prior to the hearing so i asked the judge if the creditor was allowed to apply interest to the charge . his answer was that it is the entitlement of the creditor to charge 8% interest per annum.

 

Thats it plane and simple, and it really sucks:mad::mad:

[paulwlton]

Hi i recently had 2 charging orders put on my property , i had heard about the interest prior to the hearing so i asked the judge if the creditor was allowed to apply interest to the charge . his answer was that it is the entitlement of the creditor to charge 8% interest per annum.

 

Thats it plane and simple, and it really sucks:mad::mad:

 

If the judgment was obtained on an agreement regulated by the CCA 1974 then they cannot apply statutoury interest post judgment. However, if there was a clause in the original agreement allowing the creditor to apply contractual interest post judgment this would be valid. I'm afraid judges need educating in this area.

[Steve40]

the way i understand it is the creditor has a right to charge interest on charging orders over £5000

[paulwlton]

the way i understand it is the creditor has a right to charge interest on charging orders over £5000

 

Not if the charging order is to enforce a judgment regulated by the CCA 1974.

[dulede]

If the judgment was obtained on an agreement regulated by the CCA 1974 then they cannot apply statutoury interest post judgment. However, if there was a clause in the original agreement allowing the creditor to apply contractual interest post judgment this would be valid. I'm afraid judges need educating in this area.

 

Hi All,

 

Regarding above quote

How can you tell if this is the case. I have been advised we will shortly have two charging orders against us for same debt. I don't fear any longer a move for an order for sale as I believe they are likely to apply statutory interest. We had this consolidation loan from natwest and as far as i know under cca 1974. How do I find out what they can do before the judge gives them complete carte blanche to hammer us with interest.

 

also if its one debt taken out by my wife and I and they have applied for ccj/charging orders individually will they be limited to applying one lot of 8% statutory interest or would they be able to get 2 times 8% effectively making this loan a 16% albatross around our necks. This country is ridiculous. It scares me how much the common man doesn't know 'that can hurt him' until its too late.

 

many thanks,

dulede

[paulwlton]

Hi All,

 

Regarding above quote

How can you tell if this is the case. I have been advised we will shortly have two charging orders against us for same debt. I don't fear any longer a move for an order for sale as I believe they are likely to apply statutory interest. We had this consolidation loan from natwest and as far as i know under cca 1974. How do I find out what they can do before the judge gives them complete carte blanche to hammer us with interest.

 

also if its one debt taken out by my wife and I and they have applied for ccj/charging orders individually will they be limited to applying one lot of 8% statutory interest or would they be able to get 2 times 8% effectively making this loan a 16% albatross around our necks. This country is ridiculous. It scares me how much the common man doesn't know 'that can hurt him' until its too late.

 

many thanks,

dulede

 

Could you expand on your situation?....seems someone's out to shaft you.

Edited December 4, 2009 by paulwlton

[dulede]

Hi Paul,

 

Situation is that over past 3 years I've been on sick for mental issues. Prior to this, as far as we can remember, we had gone through the all too common obtaining loans via natwest. Next thing trouble maintaining payments so spoke to them about the £100 or more in charges each month. Option was to take a consolidation loan - this is how we remember it - but can't be 100% on what the consolidation loan encompassed. I also believe the joint consolidation loan was in effect a personal loan. Can't remember exact figure borrowed and can't remember if front loaded interest or not. I assume it wasnt' and that interest just added cumulatively to outstanding balance.

 

Situation had changed and they put a CCJ on me and accepted the £25 per month offered. Due to lack of focus, my mental illness, missed a payment earlier this year and all of a sudden Shoosmiths came on the scene. They are the solicitor arm of Natwest and report directly back to Triton who are the DCA for Natwest. But the main people dealing with this have been shoosmiths.

 

Shoosmiths immediately put interim charging order on myself and they'll change this to a final charging order in January - this is guaranteed. My charge is for our joint loan approx £14K plus an overdraft on my current account. These accounts are dead to me other than for repayment purposes.

 

As soon as the interim charge was put on me, my wife was informed that they were taking a ccj out on her, this time just for £14K joint loan. They had this awarded with instalments of £25 per month. As I had missed a payment on mine which caused all this, I have ensured they are a couple of payments in front on my Wife's ccj. However, this week Natwest had the judgement varied to make it forthwith, and as no way to pay it off, will have a charge applied to this as soon as they can get it done. This will have no problem going to final charge, judge was sympathetic to us but as far as he said had to award the forthwith and subsequent hearing will have no option to put charge through.

 

So they'll have both charges, total security on our home, but what I didn't know was that the judge was next to inform us that Natwest will then be able to add interest to loan as they are being denied their money - court arranged interest is 8%. Now I know it shouldn't happen but as they have one actual loan against us but will now have 2 charges am worried sick they can charge 8% interest on both charges. In effect getting 16% on their loan.

 

Seems ...king ridiculous (sorry but truly annoyed) to me and shows that regardless of what the debt charities tell you there is little the courts won't do for the banks. I had been worried they could push for order for sale but no need it they're getting interest added cumulatively on the debt. With low payments such as what we have been paying at £50 per month between us, we wont even cover interest and debt would become £31K in little over 15 years - which is the time left on mortgage. This is if they only get one lot of 8%. We're in a right mess if they get both as they'd could literally own our home when we pay for home fully and all from 'unsecured loans'. Maddening.

 

Our circumstance could very well improve and inflation would mean £31K won't be so much or could come into some unexpected money, believe me would be unexpected though. But barring such things we are in a bit of a mess - nothing at all seems to be stacked in our favour but all for the banks. Would never have taken a consolidation loan if there'd been mortgage style 'your home could be at risk' which I believe europe is pushing for in future. That will wipe out this situation in a huge number of cases as people will choose to fight their corner before taken out such a risky loan and making things worse.

 

Well thats the story and things just keep on becoming worse. We are in effect having to find the same amount to pay them each month as we would have had we been able to continue paying loan all along. Or face a huge increase in our debt each year. This shows increase over 15 years with us paying £50 each month. Obviously will do all we can to pay as much as possible but thats the problem - what will be 'possible'.

 

15266

15839.28

16458.42

17127.1

17849.26

18629.2

19471.54

20381.26

21363.77

22424.87

23570.86

24808.53

26145.21

27588.82

29147.93

30831.76

 

Am going to get in contact with this company - discreetdebtsolutions dot co dot uk - and wonder if anyone knows anything about them.

 

Many thanks Paul and others for taking time to read this.

Dulede

Edited December 5, 2009 by dulede

[paulwlton]

Have you made a full SAR and CCA request to Natwest?

[dulede]

will do next week, i believe £10 for SAR and £1 for cca.