charging orders

Xbigman

This was posted on the motleyfool dealing with debt board and will be of interest to some of you.

The person involved does not appear to have gone in with anything backing them up IE no records of harrassing phone calls, no unreasonable letters, no failed offers from CCCS, etc. They just turned up and said it was unreasonable and asked for it to be turned down.

I hope I've not broken any rules by copying from another board or commenting on an incomplete thread there, but this worried me as a sign of things to come.

Regards


X


Finally had our day in court this week and unfortunately, despite following all the advice given on this board and on various debt counselling websites, the magistrate felt that there was no reason the interim charge order should not be made final.

In my best Perry Mason guise, I informed the judge we were making regular monthly repayments, had a lot of equity in the house compared to the size of the loan and that the company were quite happy to give us an unsecured loan in the first place so we felt it was a little unfair that they now want to secure it after we have been with them several years without a blip until recently. We also informed him that we had come to an arrangement with our one other creditor (whom we actually owed more to) and they were quite happy, without going down the charging order route. His comment was 'Well, that's up to them'.

Prior to attending the hearing, we had sent in our written defence which the judge was reading as we walked into chambers. After an interminable silence, he said there was nothing in it which warranted not issuing the order but that we shouldn't worry as most lenders don't go the whole hog and go for an order of sale. No panic there, then. I'll only go to DEFCON 2.

Prior to going into chambers, the solicitor representing the lender called us in to a side room to explain the situation and basically said (though not in so many words) that we were wasting our time as most cases these days are a foregone conclusion in favour of the lender. He also said that it was as rare as hen's teeth for the defendant to turn up and he was very surprised we had bothered.

The whole thing took less than 10 minutes once we were in chambers and seemed rather rushed. Now just have to wait and see if they do go for an order of sale. Only time will tell.

We are now undecided if fighting the case was the best course of action. The outcome, in hindsight, seems inevitible plus we have a CCJ against us and the added costs of a few hundred quid. It may have been easier just to sign the voluntary charge in the first place.

Nevertheless, just wanted to relate our experience for the benefit of others going through the same process. If so, we sincerely hope you are more successful. Finally, thanks to everyone for their help and advice. As we said to each other, you can't win 'em all!

Bossyboots

To be honest, their defence to it being granted was very weak. Even before I got to the Judge's comment, I had said the same thing to myself. As you know, a charging order can only be applied for after default following a CCJ so this was not just one little blip, it has to have been at least two.

I think in reality it is hard to defend a charging order. Pere Ubu who posts here believed a third party was making payments and it seems that they should have been. The defence in that case would be stronger although it could be argued that they should have been more proactive in ensuring the payments were being made.

An order for sale would only be made if there is further default or evidence that the property was being allowed to fall into disrepair to avoid the creditor being able to realise sufficient to cover the debt. (This second example is based on a real event when the order for sale was made).

Pere_Ubu

We are yet to have our day in court. I have telephoned Asset Link a few times about the charging order and have followed up each call with a precis in writing of our conversation. Asset Link have told us that after the charging order they will come to some repayment arrangement. Our fear is that they will get the charging order and then the repayment arrangement will be unrealistic i.e £lots each month. This will then reult in a default. Is it possible to ask the judge to set an amount each month based on our income/expenditure? We were told by Asset Link that what we pay now through Payplan will be the amount they will accept after the charging order. I have confirmed this in writing. With regards equity in our property is it the more equity you have the least likely they are to get a forced sale? We have about 40k equity our debt to Asset link is about 12k.

jason.lawrie

I had a problem with Northern Rock - their debt was the highest but as was over longest period of time they got gven lowest payment which they werent happy about - CCCS said to ignore them as not much they could do - they went to court - I sent in my defence and got an interim charging order and that the offer of payment had been rejected and full balance was payable. But this I was told by the court was not final as the case had yet to be heard and the charging order finalised. I queried with the Court Officer why they could put charging order on without even a CCJ being broken - I was told it was standard practice. I wrote to the MD of Northern Rock explaining it was unfair and he wrote back confirming that they would accept the CCCS offer with a CCJ and he instructed NR's solicitors to accept. Me personally I think charging orders are a forgone conclusion - its hard to fight them.

Bossyboots

Can I suggest Jason that you point your local court officer in the direction of the Court Service's own website and this document http://www.hmcourts-service.gov.uk/courtfinder/forms/ex325_0405.pdf


This is what it says in relation to charging orders:-

"When can I apply for a charging order?

You can apply at any time after you have obtained judgment. However, the judge who considers your application will not make an order unless the judgment debtor:• has failed to pay the amount of the judgment when it was due; or• has failed to pay one or more of the instalments due under the terms of the judgment."

jason.lawrie

judgement was set as full balance - £13000. so in theory it was bound to fail - what annoys me is that you send in your cccs budget planner showing that £x is all you can afford. the court writes back and say no and set at full balance - why??? obviously you cant pay it and it gives more scope for the charging order to be put in which is beneficial for the company concerned - you start to think whose side is the court on.

wisbech_lad

jason.lawrie wrote:

judgement was set as full balance - £13000. so in theory it was bound to fail - what annoys me is that you send in your cccs budget planner showing that £x is all you can afford. the court writes back and say no and set at full balance - why??? obviously you cant pay it and it gives more scope for the charging order to be put in which is beneficial for the company concerned - you start to think whose side is the court on.

In general, the court is on the side of the plaintiffs to try and get as much money as possible that is owed to them paid back.

earthboundboy

There are also new orders being awarded known as 'hybrid' orders. We had a CCJ applied by Egg, the repayment was set at the same amount we were paying through the CCCS, but they are allowed to apply for a charging order on the property at any time. We needn't default on the agreement, insult their mothers or otherwise step out of line for them to apply for it.

In fact they are applying for it, and the reason why is that apparently Egg as a company are not doing so well. Their balance sheet is probably looking a bit grim and thus they are hitting their bad debts hard. We too have other creditors we owe more to, who have accepted that we can't give them what we don't have.

My personal view is that the system will always be weighted in favour of the industry over the individual - we will defend our charging order if we get the chance to, but I don't hold out much hope of success!

Xbigman

Pere_Ubu wrote:

We are yet to have our day in court. I have telephoned Asset Link a few times about the charging order and have followed up each call with a precis in writing of our conversation. Asset Link have told us that after the charging order they will come to some repayment arrangement. Our fear is that they will get the charging order and then the repayment arrangement will be unrealistic i.e £lots each month. This will then reult in a default. Is it possible to ask the judge to set an amount each month based on our income/expenditure? We were told by Asset Link that what we pay now through Payplan will be the amount they will accept after the charging order. I have confirmed this in writing. With regards equity in our property is it the more equity you have the least likely they are to get a forced sale? We have about 40k equity our debt to Asset link is about 12k.

You already have a CCJ and if you keep paying it every month they should not go for a forced sale. If you have it in writing that they will not that is brilliant. Lenders attitudes are hardening and they are pushing the courts all they can so keep all records (bank statements, receipts, etc) that you have paid in case you need to prove it.
That said, you should still fight the charging order even if only on principal.


Regards



X