Charging Order? The myth

kookykathryn

Hi,

I posted last week regarding some issues with Blake Lapthorn and a restriction, I have now received this email from them!:

Please note that we are no longer dealing with this matter as it has now been assigned by our client, British Credit Trust Limited, to Cabot Financial (Europe) Limited.

Please therefore direct further queries to British Credit Trust Limited, who can be contacted on the following details:

any advice as to why that is?

thanks in advance

eggbox

The debt can be transferred to another company, but to do this they have to go back to court to get the original CCJ transferred to them legally. You should have been notified by the court of this if it has happened. Cabot have no right to administer the debt if this has not happened?

Therefore, you need to check if this was done as, if not, it's still legally BCT who have the Restriction in place and who should then be notified to meet the terms of the Restriction when you sell.

droglet

Hi Eggbox your contribution has been a massive help so far, I just wanted to clarify something as its a similar situation to what I am in currently. I am nearly at the point of selling and I have joint ownership with my wife, there is a restriction on the property, typically an unsecured loan turned into a secured one. Anyway my solicitor has now requested to contact the creditor and let them know that the sale is going ahead but what I need clarifying is that I am sure you mentioned earlier that they then have no further powers of enforcement from there on in because it would be over reached? Is this correct how I am interpreting this? Also I have asked them to provide me with a date for a simultaneous exchange and completion so I can ask my solicitor to contact them only a couple of days before that date. Does that make sense? I think I have interpreted what you have said correctly I just wanted you to clarify so I am going in with my eyes wide open. Any advice would be much appreciated. Thanks

eggbox

droglet

Firstly, the terms of the Restriction state that it has to be the buyer or their conveyancer (Solicitor) who contacts the creditor, not your Solicitor. It's they who then need to forward proof of such to the Land Registry to enable a change of registration to proceed. Your Solicitor would only need to contact them if he was arranging to pay them off which I assume isn't the case?

If you sell the property then there can be no further "enforcement" regarding the property that's just been sold as the new owner's interest take priority over the Restriction (which is the "overreaching" part.) But the creditor will still have powers of enforcement available through the CCJ they originally obtained such as attachment of earnings (asking your employer to deduct money from your wages to pay the debt), third party debt orders (seizing money in a bank account where it is in your name only) and applying to send in Court Bailiffs to seize assets to pay of the debt.

Whether or not they would revert back to these methods is debatable given they have "secured" a debt with a Charging Order and ended up with nothing. My view is they would probably sell off and reassign the debt to another debt company lower down the scale who may decide to use these methods. So you need to understand that and "plan" carefully what you do with any proceeds of sale obtained.

droglet

Hi Eggbox thanks for the reply, can I assume I am able to a/ ask my solicitor why they need to contact the creditors? and b/ I am within my rights to explicitly give them instructions that no funds are to be transferred anywhere apart from our savings account allowing us to move into rental at the time of completion?

eggbox

droglet

A) Yes you are. If he says he "has to" ask him to explain why as there is no legal obligation to do so

YOU are paying for his/her services and they should, therefore, not only follow your instructions (unless they are deemed illegal), but they also have a duty to protect your interests. Given there is no legal obligation placed on a seller to pay off a creditor from the proceeds of a sale (where the CO is only notified by a Restriction) you need to make sure the Solicitor in question is left in no doubt as to your intentions.

The problem you will most likely face, however, is the buyers Solicitor asking for the Restrictions to be removed prior to the sale. This is where your Solicitor should earn their fee by protecting your interests and explaining why the Restrictions will be removed once the Restrictions Terms are met

kookykathryn

Hi,

thank you eggbox for all your advice so far, we are still fighting a bit of a loosing battle.

our buyers solicitor wants an undertaking that the restrictions will be removed, also the debt has now been sold to cabot financial. I haven't heard anything from cabot, how can the restrictions still be in place with BCT if they don't even own the debt anymore?

any advice?? thanks in advance

eggbox

kookykathryn

Your're at the stage where you need to carefully, but firmly, remind your Solicitor that he/she is being paid to protect YOUR best interests during the sale process. Remind them that as the Land Registry confirm, in their Practice Guide 76, that the Form K Restriction will be overreached and, therefore, removed as the sale is for value; it will enable them to give an honest undertaking to the buyers Solicitor that the Restrictions will be removed upon the sale being completed.

The easiest thing to do is to assure your buyer that the sale proceeds can be withheld until the new registration is completed.

kookykathryn

thanks for your help, received a letter today from land registry confirming all the info is true and a form k will be overreached and therefore removed! Fingers crossed its enough to satisfy the buyers solicitor.

eggbox

kookykathryn

That's great you have the info to hand but make sure you impress on your Solicitor it's his/her job now to give the assurance the Restriction will be removed (because of the information confirmed by the LR) to the buyers Solicitor.

Good luck!