Charging Order? The myth

Land_Registry · 19 January 2015 at 9:24AM

wembley14 wrote: »

As for getting the right advice / info from local Land Registry regarding the restrictions this is just as bad. It all depends on who you have contact with.

My solicitor and I was told conflicting info on several occasions. All this info given to me I have kept, including info from Land Registry lawers and will use if necessary when notifying the legal ombudsman in due course.

wembley14 - like eggbox I am sorry to hear that your situation remains unresolved.

It will be of no solace to you I am sure but it is probably helpful to others to highlight that the circumstances you are dealing with are different to the majority of previous posters simply because your registered title has two restrictions on it and not the solitary form K which is usually referred to.

We tried to cover that situation in a number of posts to explain how in your circumstance the creditor had gone further than most it seems with their court actions so from a land registration perspective the requirements are far greater than the overreaching of the form K restriction most have referred to.

That does not excuse any conflicting info given though, be that our [Land Registry] own or that of other involved parties and I genuinely hope you do find a resolution to the issues you continue to face.

Coinmachine · 19 January 2015 at 10:38AM

Grateful for some advice. I have been on a DMP since last March, due to end in Jan 2024 on current payment rates. One of my creditors has written to me to state that they intend to issue proceedings and that if they get a court judgement they may apply for a charging order. The letter goes on to state that so long as I continue to make my reduced payment each month they do not intend to take any further recovery action.

Having read the information here, and spoken to StepChange, I understand that this is just that lender protecting their position, also as the property is in joint ownership, it would be a restriction and only on my half of the proceeds (we have no intention of moving house).

This creditor is not my main creditor, in fact there are three others I owe mor emoney to, are they likely to follow suit if they find out that this lender is taking this course of action. Would there be any worth in me writing back to the lender, asking them to reconsider thie course of action, on the grounds that I have been making payments back every month, I would hope to increase these over time if my overall financial situation improves, I owe more money to other creditors who so far have not taken this course of action, and that the property is jointly owned? Or, shoul dI save all this for when/if they take the action?

eggbox · 21 January 2015 at 4:46PM

Coinmachine

You are a long way off worrying about a Charging Order if the creditor hasn't got a CCJ yet. And just because you are paying the debt doesn't mean the creditor will automatically get Judgement against you.

But to help can you let us know who the creditor is and when the the loan/credit card was taken out (before April 2007 would be good!)

Coinmachine · 21 January 2015 at 5:08PM

Hi, it was Nationwide, credit card, but not before 2007, I took it out in 2013. I have written back to them asking them to reconsider along the lines set out above. Maybe it is just a standard letter but I am not so sure because of how it was worded. Stepchange said some lenders do this if it takes more than 5 years to pay them back, its 9 years currently on my DMP.

eggbox · 21 January 2015 at 5:17PM

Coinchange

Okay, but what are you asking them to reconsider (as your first post said they wouldn't do anything as long as you continue paying?)

Coinmachine · 21 January 2015 at 5:49PM

I read it as they are intending to issue proceedings to get a charging order but wont take any more action than that as long as I keep paying, so I have asked them to reconsider the intention to issue proceedings.

Like I said maybe it is a standard letter but the way it is worded makes me think not:

'Thank you for your recent offer of payment for £xx due by xx Feb 2015' - There was no recent offer its the sum I have been paying since last March.

'Please continue to make the proposed payment to this account as it will reduce your balance and will indicate your intent to repay this debt'

'Interest is not currently being charged to your account, but due to the balance outstanding it will take considerable time to clear it'

'In view of this, it is our intention to start legel proceedings. If we get a court judgement we may then apply for a charging order on any property you may own. If granted, this will mean that this debt is secured against your property'

'However, whilst you continue to make these payments, subject to regular review of your financial means, we dont intend to take any further recovery action other than that described above'

eggbox · 21 January 2015 at 6:07PM

Coinmachine

It may well be that they are looking for a CO to, supposedly, secure their debt; but it may also be a general tactic letter trying to scare you into upping your repayment? Especially, as they mention an offer being made when you have been repaying since March?

So I would see what they reply to your letter in the first instance before deciding what to do next.

Nuttymut · 22 January 2015 at 9:36PM

An update from the Nuttymut trenches.

The buyers have verbally informed us they haven't pulled out. Oh. That's not what our solicitor says. Our solicitor says you have pulled out. Ah ha. I've asked our solicitors for a copy the correspondence they received confirming the buyers had left the contract. Oh (again). Our solicitors don't have any correspondence confirming this. But they are asking for it to be sent now.

Deep deep joy joy.

I have spoken to my solicitor today. I've grasped the risk thing. There's a risk that the restrictions will not be removed. As such the buyers bank will not put up a mortgage.

That the mortgage represents about 15% of the value of the house it really does beggar belief. But I see the point is the bank doesn't want to take the risk. It's not even their money after all and they have to be sure they can recover the money in a default situation.

But ... my solicitor is informing me that they still need me to write to the two restriction holders and ask them if they will remove the restrictions on sale if I pay my share of the equity. Which amounts to 25% of the total debt. So my solicitor says that he doubts they will accept and will therefore block the sale.

Does anyone have any advice the feel would be constructive?

Nuttymut

eggbox · 23 January 2015 at 10:10AM

Hi Nuttymut

Glad you are making life uncomfortable for the Solicitors concerned! Can I ask what amount the 15% mortgage equates to and also what 25% of the debt equates, to?

Only asking as it may be better to sell the house for cash to the buyer (which eliminates the mortgage company) with the 85% cash they have as a down payment and come to an arrangement to pay the 15% to you monthly instead of the mortgage company?

Doing it this way, you can also tell the buyers Solicitor to withhold your share of the equity (as a safeguard) until the buyers details are registered at the LR (which is what Brightonian did a few posts back)

The Restriction holders, as LRR will confirm, can't block the sale as long as the Restriction terms are met. The only route available to them would be to apply for a Freezing Order which, if you read up on them, are so ridiculously expensive and also carries financial risk to the creditor; they wouldn't ever go down that route.

I'm also unsure why your Solicitor is doubting that the creditors will accept what you are offering by way of your share of the equity? Legally, they are only entitled to proceeds from your share of the equity, anyway, as that is what the CO was attached to?

Just to throw this in to the mix, too. If a house is repossessed (either voluntarily or forced); the Mortgage company (as the first Charge holder) gets all the other Charges and Restrictions on the property removed to enable them to sell the property.

Whilst the mortgage company are allowed to recover the costs of repossession from the sale of the property, the balance of the sale goes to...................................the person who had their house repossessed as the creditors no longer have any legal claim on the proceeds.

asparagus18 · 27 January 2015 at 1:28PM

when the CO was granted you became "tenants in common" as opposed to "joint owners". This means you both now own half the house separately and are able to sell your share independently of the other person

we're in such a situation - CO (Restriction type K) placed on my half of the house.

Does that mean I could sell my half to my partner, he would need to get a mortgage in his name only, and the CO would fall away after completion of the sale? Provided we find a solicitor who knows the law ...

Can't be that easy surely but here's hoping ...

Thanks!

Charging Order? The myth

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