Charging Order Loan

bobcarol

Hi,

We own our home, the mortgage is paid off. But a bank has a Charging Order on the house to cover a previous business loan.

The bank has occasionally written to me, roughly once every five years, but has refused my offers to meet to discuss this matter, when I write back.

During the last year we have received letters from the bank's acting solicitor, claiming court action if we do not pay in full. We write back requesting further information - they constantly delay - sending us only snippets of info. However, the state of play is that they have offered to reduce the debt from 170,000 to 120,000, otherwise court action will happen. Unfortunately, my entire life savings only amount to 20,000.

The interesting bit - my wife also signed and agreed to the Loan/Charging Order on the house. However, she had no part to play in the business, the business no longer exists by the way.

What is the likely-hood of the bank taking us to court, what can we expect to pay in settlement, and can you lend me a few quid? Also, if order to sell the house, would we be able to sell it or would the bank sell it on auction?

Thank you
Steve

Addicted2Chocolate

I am not expert on this, but i think a charging order is similar to a mortgage charge so the bank could take it to get, seek an order for possession, and if granted sell however they wish. I would say court action seems likely, as the solicitor would have done a land registry search and can see the property is not mortgaged. You should get legal advice.

Xbigman

Definately get legal advice now. They will certainly go to court and try to get a possession order. The court rate of interest is 8%. You say they write to you every 5 years, so what if they try to backdate the interest for ten years. Scary. As I said, get legal advice. In your position I would look at getting a mortgage on your property and see if they will take a lump sum off you. They are asking for 120k, knocking 50k off and no interest. That looks a pretty good deal. Jump back at them with an offer off 100k if you can raise that amount. If it goes to court and your property is taken it will end in tears.

If they take your house it will go to auction. They have to get reasonable value for it but that does not need to be anywhere near the open market value. On a debt of 170,000, with VAT and auction fees, you could have a house worth 300k (if sold through an estate agent) taken and you would get nothing.

I had a house valued at 42k repossessed in 1990. Mortgage was 29750. After the sale I still owed the mortgage company 12k, so the house lost 24k value somewhere. More than half its value.

You need to sort this out now.
Regards



X

jen_jen_2

is this a voluntary charge you agreed on the house? and are they threatening to take you to court for an order to make you sell the house?

if yes basically they will have to convince a judge that it is reasonable to make you sell off your house to clear the debt.
you must get advice lots of different things will effect the judges decision.
go to CAB with paperwork

bobcarol

Thank you all for your advise.

BTW, the Charge was agreed, by us, as a requirement for a business loan. The threat of court action is for the money, not to sell the house, as yet.

Surely the bank should have agreed to meet us years ago. It would seem the bank wrote ever 5 years to make sure they stayed within the 6 year limit, and to gain interest! The 120,000 includes the interest.

We stopped paying towards the loan years ago, when the bank did not answer our letters requesting we meet to discuss interest and payments.

I'm hoping my wife might have grounds for challenging the charge over her share of the equity, as she was given legal advice, by my solicitor, bad advice at that. I think she should have got independent advice, will that stand in court?

My wife had nothing to do with the business, and benefited in no way.

I think its possible to stop a sale by auction, I'm looking into this.

Thanks

Bob

Tootsie_Roll

bobcarol wrote:

Surely the bank should have agreed to meet us years ago. It would seem the bank wrote ever 5 years to make sure they stayed within the 6 year limit, and to gain interest! The 120,000 includes the interest.

I'm hoping my wife might have grounds for challenging the charge over her share of the equity, as she was given legal advice, by my solicitor, bad advice at that. I think she should have got independent advice, will that stand in court?

Point 1, 6 year rule does not apply in this case - they have a charge over your property - all they need.

Point 2, Unlikely but worth a shot if you are prepared to stand the legal costs.

I would take xbigmans advice and see if they will accpet a reduced amount in full & final, again unlikely as they have the charge but worth a shot.