Charging Order?

1313

Are charging orders a bad thing? I have seen all the arguments against charging orders from a debtors point of view. However still from a debtors point of view it could be a good thing.

Here is a scenario as to why I think it may be good.

I own a house but have an unsecured debt say of £8,000 with the high %apr

I fall behind on the payment due to the usual reasons.

If I then end up in the situation where the creditor makes a charge on the property for the amount outstanding, this is good, maybe, err, what do you think?

I think it could be good, if done correctly.

1. Interest on the loan is reduced
2. I do not need to find the money for the loan each month

3. I understand that a charging order comes in two halves, Interim and Final.

If I am correct, during the two processes the debtor can ask the court to have conditions placed on the charging order. For example the creditor can not force a sale on the property until the youngest child is 18.

So this whole scenario/process is then more to the debtors advantage, or not?

My glass is half full when I look at this scenario. Please feel free to rip this to shreds, and let me see it as if my glass is half empty.

Xbigman

1313 wrote:

1. Interest on the loan is reduced

Where did you get that from?

A charging order does not reduce interest. A judge might freeze interest and charges as part of a CCJ or on larger debts the court rate of 8% could be imposed (and that would be 8% on a debt pumped up with charges and interest already). This has nothing to do with charging orders.

A charge on a property is not a bad thing in itself, it simply gives the creditor more security. The problem is that creditors are leeches who play the system and they will play on that charge to harrass you over payments and they will jump on any excuse to try to force a sale. I firmly believe that this whole process (CCJ, charging order, forced sale/repossession) must be challenged in court at every step. Go to court, challenge every statement your creditors make, supply the court with details of all their phone calls and ignored letters, complain to the OFT every chance you get. NEVER avoid creditors or miss payments.
Regards




X

rizla01

Sounds a bit dirty, to me.

Do you mean to tell me that you think it correct to make someone that you have borrowed money from, wait till you sell your home before you will pay them back?

Is it really worth the risk for them to be able to force you to sell up?

I would doubt if you reqests to have the sale deferred would work and would be strongly opposed, I suspect.

Interest on the loan certainly wont go down unless the loan is at an already extortionate rate but if you accepted that rate then I'm not entirely sure where you would stand on that one.

Finally, I would always advise that if you are the sort that ends up with debts that you may not be able to manage, then always keep ONE option open as a last resort and I may suggest that a second charging order be just that. A Last Resort.

johannamse

The process from debt to not paying debt to charging order will be a long process and many many fees/fines/administration costs will be added.

Mmmmm....am thinking.

1313

Good to see this thread provoking a reaction. Good to see all the comments.

My personal view is that charging orders should not be allowed, as the creditor was quite happy to lend the money unsecured at a higher interest rate! The snag is that they are a fact of credit life.

But if push comes to shove is it better that the end result is a charge and I have a bit more disposable income each month, or would I be better off sat in some creditors arrangement for endless years, and skint?

1313

Anyone know what the conversion rate is, once a charge has landed the creditor forces a sale?

1313

Xbigman wrote:

The problem is that creditors are leeches who play the system and they will play on that charge to harrass you over payments and they will jump on any excuse to try to force a sale. I firmly believe that this whole process (CCJ, charging order, forced sale/repossession) must be challenged in court at every step. Go to court, challenge every statement your creditors make, supply the court with details of all their phone calls and ignored letters, complain to the OFT every chance you get. NEVER avoid creditors or miss
X

Totally agree there, sad thing is too few do that!!!

earthboundboy

Xbigman wrote:

Where did you get that from?

A charging order does not reduce interest. A judge might freeze interest and charges as part of a CCJ or on larger debts the court rate of 8% could be imposed (and that would be 8% on a debt pumped up with charges and interest already). This has nothing to do with charging orders.

A charge on a property is not a bad thing in itself, it simply gives the creditor more security. The problem is that creditors are leeches who play the system and they will play on that charge to harrass you over payments and they will jump on any excuse to try to force a sale. I firmly believe that this whole process (CCJ, charging order, forced sale/repossession) must be challenged in court at every step. Go to court, challenge every statement your creditors make, supply the court with details of all their phone calls and ignored letters, complain to the OFT every chance you get. NEVER avoid creditors or miss payments.
Regards




X

Can I ask a question on this?

We have just had our interim charging order through courtesy of those vile little people at Egg. It says - "The Charging Order Absolute hearing is NOT an application by our clients to sell your home. The Charging Order reflects monies which you owe to our client and which they wish to secure by registering a mortgage against any interest you may have in the property specified in the Order. Our clients may make application for your property to be sold at some future date but this would be an entirely separate application and would be considered on its merits when issued"

So what are they saying here? 'By the way, at any point in the future we may or may not force you to sell your house'?

We owe them 15k and they will not tell us whether they are charging interest or not. We are paying them £82 a month as per the CCJ arrangements and haven't missed a payment.

The hearing is on the 15th of December but my wife (it's in her name) doesn't want to attend and whilst I would be prepared to go on her behalf, I am not the most confident of people and fear that I'd mess it up. Also, I didn't keep dated copies of all our correspondence with egg, nor did I send any of it recorded delivery.

I just feel that they are bullying us. The fact that we were in breach of our original contract with them seems to mean that we have absolutely no rights to anything now. We are paying them a monthly payment and I have no idea whether the interest they might be charging cancels it out or not. They could just happily sit there and watch our debt to them grow, knowing full well that we are unable to pay any more than we are, and wait until it gets to a ridiculous amount and force the sale of our house.

Can I provide a written defence to the court, so it doesn't look like we have just not turned up, but we won't have to go through the ordeal of sitting in court being bullied by Egg's solicitors?

Bossyboots

I am a bit puzzled by this as the Court Service's own leaflet in relation to charging orders states that it will only be granted if payments have been missed. (http://www.hmcourts-service.gov.uk/courtfinder/forms/ex325_0405.pdf)(page 6)

To answer one of the questions, yes they are basically saying they might go for a sale of your house in the future.

Xbigman

With 15k owing the CCJ probably puts you on 8% interest. But the CCJ should say that. Did you go to the CCJ hearing? If you had gone you would know. You would also have been able to ask for interest and charges to be frozen (unlikely on that debt) or asked for the 8% interest rate if you were paying more. Also, whatever you put in writing does not allow you to respond to anything their solicitor says. They can claim you were abusive on the phone, and things like saying there service is crap can count. Get stressed and raise your voice, they claim you were aggresive and threatening. If you go you can challenge these things, although the funny thing is, if you go they don't claim half as much of this stuff. You really should go even although you are unlikely to be able to stop it now. You will get a chance to have your say and speak to the court officials about it afterwards.

Do they want to force a sale - yes.
Can they force a sale - not if you pay the CCJ.

What if the bank/courts mess up? What if you are sick? You must realize that this is now a mortgage and like a mortgage must be paid. More than that, you have no room to maneuver with any missed payments like a normal mortgage would let you get away with. You need to be so, so carefull now.

Sorry this is a bit doom and gloom but it is a serious situation and I don't want to under play it.
Regards




X

1313

earthboundboy wrote:

The hearing is on the 15th of December but my wife (it's in her name) doesn't want to attend and whilst I would be prepared to go on her behalf, I am not the most confident of people and fear that I'd mess it up. Also, I didn't keep dated copies of all our correspondence with egg, nor did I send any of it recorded delivery.

The best thing you can do is go to court, be honest and just tell it like it is. You will find that the Judge will listen to you, and also he will not judge you, he will just ensure that it is fair.

The real way that you could possibly mess it up is not attend!