Charging Order? The myth

eggbox

unfortunately, when a CO is granted against one owner (the Restriction one's) a Joint Tenancy is severed and your Mom and Step Dad would have then owned the property as Tenants in Common owning a 50% share each.

How that affects your Mom is what you need to research.

JasmineStocks

This is what I find very confusing. Also what about this case Re Palmer (deceased) (a debtor) [1994] 3 WLR 420. "The beneficial interest of a joint tenant was not, on his death, to be treated as part of his insolvent estate by the making of an insolvency administration order; it accrued to the surviving joint tenant."

If my mum became a tenant in common when my step father died then after the charging orders have been paid the restrictions can only be paid out of half of what is left. So in effect my mum would be able to keep half of what was left after the charging orders were paid.

eggbox

It is complicated but that may be referring to where a Joint Tenancy hasn't been severed before insolvency occured?

JasmineStocks

Thanks Eggbox, I'm still researching....

JasmineStocks

Well I had a letter off my mum's solicitor today saying that there is a shortfall of thousands of pounds and she says this has to be paid before the sale is completed. So it looks as if the sale will not go ahead as my mum does not have the money. I will ring the restriction companies up and tell them that if they don't agree to lift the restrictions then the house won't be sold and we will be handing the keys back to the building society. I wonder how they will sell it then with the restrictions on it? If we can't sell it how are they going to? I am very worried about them selling the house cheaply at auction and then the charging order companies not getting their money and so coming after my mum again. I don't want her to have to keep worrying about it all. I know the restriction companies can't take her to court as they are not her debts but the charging order companies can if they don't get their full money. Has anyone experienced this complication?

eggbox

JasmineStocks


I'd contact the creditors with CO as they may be able to persuade the creditors with Restrictions to move. I'd doubt they would remove them if you requested?


Can I just ask if your step Dad's estate has been settled?

JasmineStocks

Hi Eggbox, what do you mean has my step dad's estate been settled? If you mean all his financial affairs, he owed debt everywhere, which we only found out about after his death. He had been seriously disabled for the last 10 years of his life, constantly in and out of hospital and obviously got himself in a financial mess, which is so hard to sort out.

eggbox

When a person dies whatever his financial affairs were have to be sorted. Have a look here as it may help.


http://www.adviceguide.org.uk/wales/relationships_w/relationships_death_and_wills_e/dealing_with_the_financial_affairs_of_someone_who_has_died.htm

eggbox

JasmineStocks wrote: »

I am very worried about them selling the house cheaply at auction and then the charging order companies not getting their money and so coming after my mum again. I don't want her to have to keep worrying about it all. I know the restriction companies can't take her to court as they are not her debts but the charging order companies can if they don't get their full money.

Just to put things in perspective so you don't worry; if you do have to hand back the keys to the mortgage lender (voluntary repossesion) they will be seeking to recover THEIR costs only. They have no obligation to the lower priority charge holders who (as you will see by joan1920's posts) are forced to remove their charges to allow the property to be sold.

This is why, when there is no legal obligation to settle Restrictions on a house sale, that it's the Solicitors refusal to proceed that is causing everyone problems. This is what you need to contact the registered CO creditors and explain the situation.

Your Mom should able to sell to the buyers legally by paying off the Registered CO's and all your BUYER has to do is to NOTIFY the Restriction Holders. There is no provision on the Restriction that says the Charge it relates to has to be settled to allow a sale. It only states that the Restriction holder must be notified of the sale for the sale to proceed. She could then be able to walk away with no problems.

But if your Mom does have to walk away, please understand that whilst your Mom's creditors can still "come after" her because of the CCJ originallly obtained if there is any shortfall of the debt owed from the repossesed house sale; they won't as she now has nothing to be chased for.

JasmineStocks

Thank you very much for your reply, I will put that in my letter to the charging order companies that we can't go ahead because of the solicitors. I bet THEY are able to sell it though! What I am worried about is that she will have to go through all the stress of a court order and then them assigning a ridiculous amount for her to pay back each month, which will leave her with a very small amount to live on.