Charging Order? The myth

joan1920

Hi eggbox the debt owed to me was in the form of retained equity of the property held by the purchaser which was never paid due to the property being repocessed hence a bankcruptcy petition was imposed and upheld by the judge and many others are in same position as myself so if the bankcrupt has properties with suffiicent equity once sold to pay both the mortgage lender and the retained equityto the charge holder then it is in my opinion if this applies that the charge holder could then enforce the property to be sold in order for them to realise their debt, this again is only my opinion but you could get clarity from llr this might not have anything to do with your personal situation I am just explaining what happened to me is yours a consumer debt or a mortgage debt or a registered charge on your property?

joan1920

Thankyou LRR for clarifying this that is exactly what happened I did not get legal advice from the land registry was just told of what would happen in my situation I was told by my own solicitor at the time that presidence relating to the property goes to the mortgage lender and that even if I refused to sign declaration to release the charge the sale would go ahead regardless I don't know if this is what eggbox is asking or whether this actually applies to him I don't know his personal situation only the fact he asked a question which I thought was relevant to my case hope this hasn't caused any confusion

joan1920

I have a hperthetical queston regarding to charge orders on properties can any one help
If a property is placed into the hands of a TRUSTEE in respect of bankcruptcy petition and is jointly owned with former spouse who no longer resides at the property and the former spouse has remarried and remains in the matrimonial home with new wife be held accountable for payments to the mortgage lender? secondly if there is a registered charge on the property by a third party is the former spouse responsible for half payment of the charge owed to the chargee if the house is sold by the lender to whom the mortgage relates if there is only sufficent money raised from sale to cover mortgage debt and insufficent to cover charge debt any help on this would be very much appreciated maybe one for th LRR

Land_Registry

joan1920 wrote: »

Thankyou LRR for clarifying this that is exactly what happened I did not get legal advice from the land registry was just told of what would happen in my situation I was told by my own solicitor at the time that presidence relating to the property goes to the mortgage lender and that even if I refused to sign declaration to release the charge the sale would go ahead regardless I don't know if this is what eggbox is asking or whether this actually applies to him I don't know his personal situation only the fact he asked a question which I thought was relevant to my case hope this hasn't caused any confusion

Thanks joan1920 for clarifying - whilst I can leave it to eggbox to explain their position I believe that they may have had similar issues a while back and this thread is aimed at helping others deal with the myriad of issues around charging orders and their impact.

Their question was indeed an open one by the look of things to see what 'experiences' are out there but the issues around COs can be quite separate from registered charges so it will be interesting to read what anyone else posts.

As far as your later post is concerned I am afraid I cannot offer any advice and the complicated nature of the scenario would merely make me encourage you to seek legal advice.

neiljules

Hi Guys,

What an interesting an informative thread this has turned out to be. Wish I had read it years ago.

I have a quick question which is hopefully simple to answer.

I have a restriction (haha charging order) against our shared mortgage property but have had no contact in 5 years from the company that lodged it asking for money or repayment agreements. My question is, what avenues can they follow to regain their money or instigate some kind of payment plan? Or have they effectively hamstrung themselves by taking out the perceived security of a charging order?

I have spoken to them recently to try to open a dialogue about removing the charging order and agreeing a repayment plan but the response was incredibly rude and to the point. We have been under a DMP for all of our other debts for 2 years now and have made all payments on time and I was wondering if it was worth trying to get them brought into the DMP on the proviso that the CO is lifted. The only worry is that this will trigger them to chase the money in another way. (attachment of earnings etc).

Ok, so maybe not a simple question after all, but any advice, knowledge or help greatly appreciated.

eggbox

joan1920 wrote: »

I have a hperthetical queston regarding to charge orders on properties can any one help
If a property is placed into the hands of a TRUSTEE in respect of bankcruptcy petition and is jointly owned with former spouse who no longer resides at the property and the former spouse has remarried and remains in the matrimonial home with new wife be held accountable for payments to the mortgage lender?

Only if the former spouse is named on the mortgage can they be held responsible for its repayment.

joan1920 wrote: »

secondly if there is a registered charge on the property by a third party is the former spouse responsible for half payment of the charge owed to the chargee if the house is sold by the lender to whom the mortgage relates if there is only sufficent money raised from sale to cover mortgage debt and insufficent to cover charge debt any help on this would be very much appreciated maybe one for th LRR

For a Charging Order to be attached to the property (land) it would mean the debt behind the CO would have to be owed by all joint owners or just the sole owner of the property.


So in the instance you give above, the former spouse would, either, be definitely responsible as she would have to be on the mortgage and be a joint owner for the Charge to be attached to the property; or definitely not responsible as she was not on the mortgage or title deeds and her partner was the sole owner.


Just to clarify, its not possible to register a Charging Order against the legal estate if there are joint owners but only one person owes the debt. In that instance the CO can only be registered against the debtors financial interest in the property and does not affect the other non debtors share.

eggbox

neiljules wrote: »

My question is, what avenues can they follow to regain their money or instigate some kind of payment plan? Or have they effectively hamstrung themselves by taking out the perceived security of a charging order?

As you will see from Sparklyfairy's post above, they have to resort to threats about making you sell your house if no payments are forthcoming. But as you will see from the responses, its only if you fall for their huff and puff that it has any effect. Have a read of post #884 to understand why.

neiljules wrote: »

I have spoken to them recently to try to open a dialogue about removing the charging order and agreeing a repayment plan but the response was incredibly rude and to the point.

They are not going to do that as the CO gives them priority over other debts if your house "had" to be sold or if you were made bankrupt.

neiljules wrote: »

We have been under a DMP for all of our other debts for 2 years now and have made all payments on time and I was wondering if it was worth trying to get them brought into the DMP on the proviso that the CO is lifted.

Ditto above reply

neiljules wrote: »

The only worry is that this will trigger them to chase the money in another way. (attachment of earnings etc).

Attachment of Earnings are a possibility but according to debt collection information they are extremely rare.


If the CO isn't attracting interest then its best to leave alone as the value of your house will increase and the size of the debt, comparibly, will decrease. But if you need to sell this thread makes it clear there is no obligation to pay a CO only notified by a Restriction.

Lazy_B

I'm so glad this thread is still going, started reading a few weeks ago, got to 2011 and fast forwarded to present!
Currently going through sale, hoping to complete by end of feb. I have CO in my name (restriction as it turns out!) and joint mortgage. We were in panic until I found this thread. Hope it's all going to go smoothly, solicitors contacted creditors for outstanding balance, so they've prob sussed that we are selling . But I spoke to solicitor today to tell him we were not obliged to pay and he agreed and has sent me a letter to sign to confirm it, and also advised that the creditors will still chase me for debt but I'm more ready for them now than I was 4 years ago!
Will keep you posted, fingers crossed, and thanks for a brilliant thread!

eggbox

Lazy B


Firstly, whatever happens please update the board as what you have already stated is useful and future info is useful to everyone else in the same position!


The fact that your Solicitor has already contacted your creditor is of no concern as they rely on your Solicitor being compliant to repay off the CO behind the Restriction. You must expain ALL the info on here stating YOU have no obligation to settle the CO from the proceeds of the sale and you are also instructing them not to.


However, it's most likely the BUYERS Solicitor will request the removal of the Restriction and whether your sale proceeds (without settling the debt) will depend on how good YOUR Solicitor is at explaining the Restricitons requirements for removal upon the sale.


That requirement (by the buyer) is only notify the LR they have sent notification to the creditor that the property is being sold. That's it!

Lazy_B

Thanks, from what I've read on here that's what I'm hoping for.
Will deffo keep you posted!