Charging Order? The myth

Distracted

Hi,

Just a quick update from yesterday's hearing. As expected the CO went through, I queried with the legal rep and the District Judge who both called it a Charging Order, the DJ conversing that it would be against my wife's interests only.

I re-read the LR paperwork before I went in and it clearly states that the restriction will decease once the buyers solicitors contact the solicitors operating on behalf of the claimant (again no time limit was mentioned) and the house is exchanged.

I intend to cover ourselves with a TIC agreement with it being heavily in my favour.

I'm now undecided as to how to proceed, whether to sell the property in the next couple of years or to carry on living here for a while. I'm inclined to sell, taking out the next mortgage in my sole name. Knowing that there's the slightest chance they can take my money off me for my wife's ex partners past behaviour just doesn't sit right with me.

A big thank you to everyone on this board, especially Eggbox and LRR for helping me through a difficult period of my life, and giving me the information and knowledge to be able to deal with it.

I'll be back on when/if I sell to let everyone know how it went

eggbox

Hi Distracted

Sorry to hear the CO was granted but, as you will have expected, they are virtually impossible to stop. But good luck to you if you decide to sell now but remember the creditor is, largely, at a dead end now regarding any enforcement action it can take. So don't be rushed into a decision that may cost you money as you now have the time to plan your best option.

Garyich

I have a situation where a court costs debt in my name led to a restriction via CO being entered on our jointly owned property.
All attempts at resolution or negotiation have failed.The debt is currently £55,000 with 8% interest being charged.
The other side have said they will not go for an Order for Sale until my youngest child is 18 - in 5 years time.
We are unlikely to be able to pay the mortgage off by then so seem to be facing the agony of waiting for a forced sale as a huge debt piles up. I predict my equity in the property by that time will not even pay off the debt in full.
Any comments or advice gratefully received.

eggbox

Garyich

Can I ask what the debt is for?

harisumo

eggbox wrote: »

From the This is Money Website,

You'll have to contact your solicitor but it's quite a simple procedure. You can switch simply by writing to each other saying the property will be owned as tenants in common (where you specify the percentage split) and then to the Land Registry.
Alternatively, you can fill in form RX1, available from the Land Registry, but it's best to have legal help to do this. You will also have to specify in your will that you intend to leave your share to your specified beneficiary.
It can cost as little as £30 for legal documents to be drawn up but if you want more in-depth legal advice it can cost more.

Hi, I asked a while ago about how one would go about changing the ratio of ownership and decided to do this in favour of my husband who is debt free - I have a restriction in my name only. I think I must have missed the point re the text above thinking we could just write to each other and then the Land Registry as we do not have a solicitor. Land Regsitry replied as follows:

"The Land Registry is only concerned with the ownership of legal estates and therefore we are not concerned with how the relative percentages of the equitable title are held. If you wish to make it clear that you hold the property in undivided shares then I would advise you to cosider making an application for a Form A Restriction to be placed on the register. Our Public Guide 18 gives information on the difference on the two types of ownership and also mentions that you can apply on either form SEV or Form RX1 (including the type of restriction being form A)."

I'm really confused now!

eggbox

When two people originally purchase a house but want to hold it as Tenants in Common rather than Joint Tenants, a Form A Restriction is registered at the time. This, very often, doesn't happen when owners become Tenants in Common as a result of a Charging Order as most people have no idea the CO has severed their Joint agreement!

The LR are only really explaining that if you want to make it clear (to anyone searching your deeds) then registering the Form A Restriction through the RX1 form is the way to go.

Garyich

Hi eggbox

Courts cost from a lost employment tribunal case - unusual I know.

G

eggbox

Garyich wrote: »

Hi eggbox

Courts cost from a lost employment tribunal case - unusual I know.

G

It is unusual but I know court costs can be ludicrously expensive.

It's difficult to give you much advice on this particular thread as the main thrust is trying redress the unfairness of people having paid high rates of interest on "unsecured" loans only for those loans to be given a form of security when people have been unable to pay.

But a read through of this thread will at least make you aware of what power a Restriction holds and will at least give you an insight into the options you have if you decide to sell your house.

Garyich

Thanks eggbox. I have found some very helpful posts here - several from you. One thing I am still looking for is how often orders for sale go ahead and how you oppose them.

eggbox

The official stat from court records state that only 0.5% (or 5 in every 1000) of Charging Orders ever progress to the Order for Sale stage. So they are a rarity largely, I feel, because it is difficult for creditors to persuade judges to grant them.

However, there is nothing to stop a creditor chancing it's arm it it so desires. If that happens have a look at post #880 on this thread as it gives the caselaw the Ministry of justice feels protects homeowners from having a sale order granted against them in court.