Charging Order? The myth

eggbox

Don't be too confused as the Land Registry cannot give advice. They are just, correctly, stating that if no certificate is provided that the creditor has been notified of the sale (they mean evidence and a Solicitors letter notifying them will suffice) then they cannot remove the restriction. But once that is done they are free to do so.

You do, also, have it in their Practice Guide 76, however, that a Restriction will automatically be removed without application when a property is sold to a third party for value as the Restriction becomes "overreached". Which means the buyers interests override the creditor with the Restriction's interests.

eggbox

kookykathryn

It's important to understand what the wording on the Restriction actually says. On your wording it states;

"No disposition of the registered estate is to
be completed by registration without a certificate signed on behalf of
British Credit Trust Limited or its solicitors that written notice of
the disposition was given to the said British Credit Trust Limited"

This simply means your creditor has to be notified that a sale of the property is happening. That's it. Nowhere does it state on the wording that the Charging Order, notified by the Restriction, has to be paid off to allow a sale to proceed.

kookykathryn

Still not getting anywhere, this is what my solicitors response was:



"I have also spoken to our Team Leader at the Gloucester Land Registry and they are telling me that, so far as the first Restriction is concerned, that can be removed when the Buyer’s Solicitors submit their application for registration because we have given the appropriate 14 day notice to Blake Lapthorn and the Buyers Solicitors can confirm this when they submit their application, particularly as this relates to an Interim Charging Order.

However, the second Restriction is that which is causing us a problem in that, as it relates to a Final Charging Order in favour of British Credit Trust, this Restriction can only be removed upon production of the appropriate ‘Certificate’ signed by BCT or their Solicitors. As you know, thus far Blake Lapthorn have told us that they will only produce the ‘Certificate’ on behalf of BCT when the outstanding debt is paid, despite our telling them that you are not in a position to fully settle this.

Land Registry are telling me that they would NOT remove the Restriction without that ‘Certificate’!

You have of course offered to enter into a payment plan, which BCT have thus far refused, but we are waiting for a further response from them, having asked them to reconsider the position. "


I am really confused as there is no charging order on the deeds simply that restriction that I have posted.

eggbox

Kookykathryn

You, unfortunately, are coming up against your solicitors lack of knowledge on this particular subject and the Land Registry's need to be seen to not be giving advice.

The Charging Order you have is against your "beneficial interest" (equity) in the property concerned. This is because you are a joint owner of the property and, as such, Charging Orders (even Final one's) are not allowed to attach to the legal estate as they would do if the property was solely owned. That is why, on jointly owned property, ANY Charging Order can only be notified by a Restriction on your Land Registry details.

The signed Certificate mentioned in the restriction is only a piece of paper to say that BCT has been NOTIFIED the sale is going ahead. That is all that is required to satisfy the terms of the restriction. It has no other powers and a signed for recorded delivery sent to BCT notifying of the sale would suffice for Land Registry purposes.

Solicitors are notoriously confused in this area but do persist as all the info you require is available. You just need your solicitor to read it!

harisumo

I am in a bit of a panic this morning as I've just had a letter from Northern Rock, the owners of my restriction, advising that my 'unsecured loan was being sold to Marlin Capital with effect from 28/10/13 and that any charging orders on it would administered by them'. Can they do this? Dealing with these debt purchasing companies is always so much more scary they tend to want their pound of flesh more. I wondered where all this leaves me legally as I feel so much more vulnerable now, the letter was quite a shock.

eggbox

harisumo

Firstly, don't panic as this is happening quite a lot lately and it changes very little. The Judgement does have to be transferred by an order of the court, though, so unless you are notified of this by the court you are entitled to ignore them.

You will get pressure from the new owners of the debt but stay calm as they have no more powers than the previous owners. In the cases I've dealt with the first port of call is to try for an attachment of earnings. So be ready to deal with that and prove what you have been paying, if anything, is all you can afford (if you are unemployed or self employed, though, just let know as an AOE order is not accessible on those statuses)

If they can't get an AOE, they will usually send you a letter saying that if you don't make an offer then they will have no choice but to consider going to court to obtain an Order for Sale. If this happens, simply write to them explaining why you cannot offer further payment and explain that the house is your family home and was purchased for that purpose. Further explain that any attempt to obtain an Order for Sale is also liable to fail due to the Case Law outlined in post #880 of this thread.

In the cases I've seen this either ends further attempts of extracting payment or you receive a letter saying they accept your (fictitious) offer of payment. At this point they can be ignored.

Quite why creditors are selling off Charging Orders for a fraction of their worth (which is what debt purchasing company's will be paying)would be interesting to know. They may just want the debt off the books or, hopefully, some are seeing them as not a great way to extract money from the debtor?

But it raises the question, again, just why so many people who took out "unsecure" loans have had to suffer the stress and worry of court action by a debtor being allowed to pursue "security" for the "unsecured" debt, only to then find out that the creditor will discard the debt for peanuts? It really is scandalous given the amount of money high street banks (most of whom these debts are owed to) have had ploughed into them by the taxpayer to keep afloat.

harisumo

Hi Eggbox, thanks for taking the time to reply in such a helpful way. I dread the postman coming these days you never know what will pop out of the woodwork next. I can't understand why Northern Rock went through the whole court process racking up thousands extra on the loan in legal fees then just to do this, it dosen't make sense. I am actually unemployed and receive a small occupational pension only. I suppose now then it is just a case to wait and see what happens next but I don't feel quite as bad today. Thanks again, your advice really is much appreciated.

eggbox

Harisumo

No problem, but given your circumstances you really have nothing to worry about regarding any further enforcement by a creditor. I do understand what you say about the postman, however, but fear is largely created by the unknown.

Having advance warning of what is likely coming your way in those letters should, hopefully, eliminate the fear effect the creditor is hoping their threats will have on you. Just remember that trying to induce payment through fear is all they have left once they have obtained a CO, as they aren't going to get an Order for Sale.

harisumo

Thanks Eggbox
I have already received another letter this morning from Marlin advising that they would, from 28/10, be entitled to all the rights of this loan account and the benefit of any actions taken by Northern Rock prior to the assignment. They have given me five days from the date of the letter to phone their solicitors to discuss my circumstances and how the account can be repaid in full by me making payments I can reasonably afford. Obviously I won't telephone them as I only ever deal with these people in writing anyway, I've learnt that from past experiences. My poor husband is worrying also, the loan was nothing to do with him, he is convinced that in the end they might send balliffs and goodness knows what else! I really appreciate your help, all this was so unexpected and caught me a bit off guard.

eggbox

harisumo

Do remember you have to have it verified by the court that they have had the CCJ reassigned to them. Without that it's not valid as they can't just buy the debt and assume rights.

Explain to your Husband that the use of bailiffs is extremely rare for this type of debt recovery. Simply because it rarely returns anything of great value and ownership of assets can be difficult to prove for the creditor (ie, if your husband says he owns everything the onus is on the creditor to prove otherwise.)

But also explain he shouldn't be doing the creditors work for them. What I mean by that is he shouldn't be worrying unnecessarily; if you look at the information available on here (and also other posters experiences) you will see the limited options creditors have once a CO has been obtained. They can threaten anything they want to, but its what they actually do that's important to understand.