Charging orders

Krasnoludek

Hi there

Just after some advice really. We are currently on a DMP with CCCS which is going ok, no one has got particularly nasty and we are up to date with everything and finding the payments ok.

Our biggest debt is 6.5k on a MBNA card, if MBNA were to apply for a charging order on the house how would it work ? I know its not really likely given the amount and the fact that we have always paid and intend to keep up to date but seeing as only about 30% of the debt is in both our names would it be worth getting a charging order on a property that is jointly mortgaged (with little equity) ??

Cany anyone advise. I dont think any of our creditors will take this action hopefully but just been reading another thread and started thinking surely they can only apply it to 50% of the property anyway ??

K xx

dancingfairy

I think there is probably a factsheet on NationalDebtline about charging Orders -you could look there.

shinyhead

Hi Kras,
Firstly you have to have a CCJ against you for this and usually a charging order is applied if you fall into arrears. This process is quite long winded so if that's what they're threatening you with there's a long way to go yet. A CO secures the debt against your interest in the property. There has to be a further application to force the sale of the property after the CO has been granted. Historically a force of sale has been very rare but if the threads here are anything to go by it is becoming less so. If you need more info don't hesitate to ask again here but also the National Debtline website has good info.

Krasnoludek

Hi

I had a look at the National Debtline info so thanks for the advice. It seems like its not a likely avenue of action, we havent really had any seriously bad letters and some of the creditors have stopped interest, so its not looking likely that they will take further action at the moment and as you say it would be a CCJ first.

As I understand it you dont have to have a force of sale if you have a Charging order it can just sit on your property until you sell and its a way of showing assets on the banks accounts basically. We owe 19k, the biggest debt being 6.5k to MBNA, they have stopped charging us so they arent being unreasonable at the moment but who knows! I was also told Order of sales are never granted if there are children in the house (we have 2 - one toddler and one age 6yrs) Does this sound right ? I wish we could just pay this off and not have to worry : (

My husband is doing a course at the moment that ends in 2010 and our circumstances will be so much better after that, I just hope they play ball with us

K xxx

shinyhead

I've also heard that orders for sale aren't granted in those circumstances that you've described. At the moment I think you're worrying over something that may not happen at all so just relax.

dancingfairy

Generally it sits on the house and that's it. It's like a safety net to the lenders so they know they will get the money when the house is sold if you don't play nicely and make repayments. It gives them more power though. It was considered extremely rare for anyone to have a house sale forced although I have recently heard of a couple of people of DFW who have been in this unfortunate position so it seem that this is becoming more likely although still extremely, extremely rare.
Obviously if you can it's best to avoid one, but just because you get one it is not the end of the world. and as the OP said it's a long process they can't just wake up and give you a charging order. There is an interim charging order then the full order and you can obviously represent yourself or get representation and argue it as it needs to go through court.

If you are with CCCS you should be in safe hands as they come highly recommended on here. If you have any problems CCCS should be able to help or know someone who can so don't be afraid to ask them.

dancingfairy

I don't know with relation to the children but what judge is going to make you homeless if you can clearly demonstrate you are doing your best in a difficult situation? It would cause a public outcry which I doubt the lenders or the judge or anyonelse would like to see happen so I think it is unlikely.

Queen

Hi try not to worry I know its easier said than done have same problem 2 month behind but have sent token payment with RBS due to illness they are not interested in an arrangement, want to go to court for a CO no equity however I'm worried that court will set a higher figure than we can afford husband been in Incap for 12 nonths gone back to work yesterday but has illness which he will suffer with for life so income not reliable and we take every day as it comes, over the last year he hasn't even managed a full week, CCCS say they will take an average and if we explain the situation they will set a low figure, we'll see how it goes

Deep_In_Debt

Hi Queen
I should imagine the court will only take what you can afford and the judges are human so I'm sure if you explain the situation as CCCS said, I'm sure you'll be ok.

Queen

Hi thanks, worried that judge will set a higher judgement that we can afford this will be ok when his back at work permanantly but if he is then off we are up the creek without a paddle also mortgage is going up by £180 in September, just a call from debt company who advised me that I am not doing myself any favours paying the minimum as I will not clear the debt and we should consider a DMP or IVA even though we do not have the moneym to pay into this very shirty with me when I tried to explain this

Deep_In_Debt

Do not go for an IVA unless you have looked properly into it. They are only suitable for a small percentage of people and there is a lot of money to be had for companies selling them. If you have assets to protect such as property then they may be suitable. However, you have the bare minimum to live on every month and if you cannot afford it then many of them end in bankruptcy. I nearly went for one but then I discovered the likes of CCCS and CAB thanks to a couple of my creditors!

Do contact CCCS or CAB or National Debtline to discuss your options further if you decide on the DMP or IVA route - they are not out to make money out of you and offer free advice and free DMP's. i suspect the company that called you are sharks.

If you go to the court with your I&E and explain the situation, I'm sure the judge will look favourably.