Charging Order? The myth

Spongebob64

Back in December 2007 Northern Rock managed to obtain a charging order against my property. At the time I was having financial difficulties and I had made arrangements to make reduced payments. However, one payment was somehow missed, which I was unaware of until the day of the hearing and Northern Rock managed to get their Charging order.

Since then I have haven't heard anything at all from Northern Rock and no payments have been made against the debt and there were no orders from the court to make any payments either.

The mortgage is in my sole name, but there is also a legal agreement in place between myself and my wife to protect £40,000 which she provided to cover deposit and legal fees.

Since then my situation has changed somewhat and I now have one severely disabled child who receives the higher rate of DLA and the higher rate mobility allowance. The house has also been adapted to meet his needs. In addition, I also have 3 children who receive the middle rate of DLA.

I have today received a letter from Mortimer Clarke Solicitors asking me to contact them to discuss non-payment of the loan and to arrange a way of paying it back. They say if I don't phone they will take steps to recover the debt. I understand that the debt was sold by Northern Rock to Marlin Europe and Mortimer Clarke are acting on their behalf.

My question is how should I deal with this approach from Marlin and if Marlin has purchased the debt from Northern Rock what happens to the charging order? I'd assume it is still in Northern Rocks name, so would Marlin have paid it off when they purchased the debt? I had a look on Trustonline and there was no mention of the debt.

Thanks

eggbox

spongbob64


Marlin appear to have purchased a pile of debts secured by Charging Order and seem to be aggresively trying to collect payment from them.


Can I ask what the legal agreement with your wife is and if she is registered as a joint owner?

Spongebob64

The house is registered in my sole name and the mortgage is in my sole name as well. At the time my wife had financial problems and was unable to obtain a mortgage. She did however have a flat and the proceeds of the sale went towards the deposit and legal fees.

To protect her interest, the solicitor drew up an agreement between my wife and myself which states that if the house were to be sold and after the mortgage had been paid off, she would be entitled to the first £40,000 plus 50% of the remaining profit. I would be entitled to the other 50%.

She is not a registered as a joint owner, but there is a note with the Land Registry stating that she has an interest in the property.

eggbox

The threats from Mortimer Clarke are almost certainly a fishing expedition to see how you respond. My advice in the first instance is to write to them explaining your circumstances and see how they respond? Unfortunately, sole ownership doesn't offer quite the same protection as a joint ownership but if your wife's interest was registered prior to the charging order then that has to take priority over the Charging Order.

Spongebob64

My wifes interest was definitely registered before the charging order was made. If the house were to be sold there would hardly be anything left once the mortgage had been paid off and she had her money returned.

I'll write to them and see what they say and post the reply on here.

I'm still confused about the status of the charging order though. If Marlin have purchased the debt from Northern Rock, surely this would mean Northern Rock now have their money and therefore the charging order would no longer be applicable. There has already been a CCJ for this debt in the past and I didn't borrow any money from Marlin or instruct them to pay my debt and I didn't ask them to interfere in my private matters with Northern Rock. So I am wondering what rights they would actually have.

eggbox

Creditors can sell on the debts to a third party and the CCJ and CO then passes to them. But this has to be legally reassigned through a court which you should have been notified of?


If you haven't been, you are perfectly entitled to request details of this from the person alleging they now own the debt and to state you can't comply with any requests until such proof of the reassignment is supplied.

Spongebob64

I had a letter saying the debt had been sold to Marlin, but I haven't had anything to say that the debt has been legally re-assigned through a court. I'll include this when I write to them.

Thanks

harisumo

I have posted before as I am in similar situation with with Northern Rock and Marlin. I am being hounded by letters from Marlin but so far haven't replied but have found out that their 'solicitors Mortimer' are apparently 'just a desk in their offices', they just sent me a form to complete requesting very detailed information about my income and expenditure. At the end of the day if I did complete the form as far as I am prepared to they would never accept the offer of payment I can afford as it would be so low. At the moment I am ignoring them.

The amount of the original restriction is quite high as the original debt was stacked up with interest charges and high solicitors fees which ran into thousands. The DCA is acutally chasing me for the value of the original debt outstanding (which was still racked up with various penalty and late interest charges which theoreticalliy could be claimed back or so I was once advised) so can they legally transfer the original restriction over in these circumstances as a different amount of money is involved and being claimed.

I read somewhere that this 'high powered and litigation minded' DCA had done a deal with Northern Rock and purchased a massive amount of their 'non-performing' loans so I suppose they probably paid peanuts for them in the first place.

eggbox

Whatever the value of a debt owed that becomes secured by way of a Judgement can then be transferred to another company as long as it has been re-assigned legally by a court (of which you should have been notified.) But you are right to question what the "true" level of these debts are given they are purchased by company's like Marlin for around 10% and less of their actual value (meaning a £10,000 debt being purchased for a £1000 or less.)

I've also recently come into contact with other people now being aggresively pursued by Reston's (for debts sold by MBNA to Marlin) with threats of going for an Order For Sale if they don't make an offer. It's a worry again for people still struggling to repay bills and I have seen people, sadly, fearing for their homes again.

But it's important to remember the facts still remain the same in that an Order For Sale is hugely difficult for a creditor to obtain and there is relevant case law (which the Ministry of justice are of the opinion prevents an Order For Sale on Primary and family residencies) that can be used should a creditor go down this avenue. And from an article in the Law Gazette, by District Judge Neil Hickman, it would suggest Courts understand this type of debt purchase and wouldn't be swayed by a creditor trying to evict a family for a debt they have purchased at low value. He writes,

"Any creditor seeking an order for sale in respect of a debt of under £25,000 will be well advised to address the issue of proportionality specifically, convincingly and in detail.
A further issue is that many creditors seeking charging orders have acquired the debts which they seek to enforce by purchasing them for a fraction of their face value – I have personally seen sales at four pence in the pound and there is talk of debt changing hands for as little as two pence in the pound.

While of course the creditor is entitled to be paid the full face value of his debt, in assessing the proportionality of forcibly evicting the debtor from his home it must be relevant to know whether the creditor is £20,000 out of pocket or only £400.
Again, creditors will be well advised to address this issue in their evidence to the court."

Spongebob64

Well, I've sent the letter and await the reply from Marlin.

I also downloaded the title deed from the Land Registry. There is a note relating to my wifes interest in the property as follows.

(20.07.2004) RESTRICTION: No disposition or dealing of the registered
estate (other than a charge) by the proprietor of the registered estate is to be registered without a certificate signed by *** or her conveyancer that the provisions of a Trust Deed dated 28 June 2004 and made between **** and *** have been complied with.

and the following

(05.10.2007) Equitable charge created by an Interim Charging order of the **** County Court dated 20 September 2007 in favour of Northern Rock Plc.
NOTE:-Copy filed.

No mention of the final charging order though ???