Charging Order? The myth

cookiemandy

i pay£5 a month on a ccj for a debt of £3000 to rbs and a charging order is on my house which i now realise is a restriction order as in joint names...th solicitors involced on behalf of arrow global have sent me an expenditure form saying i must fill it in..as my case is being reviewed every 12 months as to how much i must now pay...even though it went to court 4 years ago and i have never defaulted...do i neeed to fill in the form or should i ignore them...thanks

eggbox

Don't fill in the I&E but just write and say that the £5 a month was the agreed figure to repay and you are not in default of that. They send these out routinely trying to extract a higher repayment. Just be polite and say that is all you can still afford to repay.

cookiemandy

thankyou

i just didnt know wether to ignore it...as after reading the threads they cant do any thing about the charging order as it is a joint owned property and thought they may be trying to get me to pay more...as that is the only way they can get payment..it is 3 years and they havent asked me to fill in one of these forms before..

eggbox

Unfortunately for them, a CO on jointly owned property isn't that strong. They know a Court isn't going to sanction an OFS (certainly not for anything under £25000) as its a disproportionate action. So they can only try to apply pressure through threats of what they might do if you don't cough up more money. Once you realise the threats don't carry any weight; then the fear they try to instill goes away.

hullcity2305

Hi all,
Wonder if anyone has advice on what to put in a letter to court regarding CO hearing in December. I have my Stepchange plan and income expenditure details. Debt is in my sole name, property is in joint. I know I need to request statutory interest be stopped, there not be a request for sale and keep the same payment arrangement. Was wondering if anything else is taken into account or is it just purely financial?

eggbox

Hi hullcity 2035


The below is written by Sequenci (who practices Law) and is on the CAG forum on the "Charging Orders a Guide" thread; I'm sure he won't mind me relaying the information here.


Sequenci states;
In a nut-shell post judgment interest can no longer be applied to CCA regulated charging orders at all.
- Charging orders and their effect are determined by the Charging Order Act 1979
Section 1 COA says that a Charging Order is made ‘for the purposes of enforcing that judgment or order’ and that the charge is for ‘securing the payment of any money due or to become due under a judgment or order’. Although enforcement of a Charging Order is not execution of a judgment, s1 means that the order and the judgment must be coextensive. Therefore no money can be recovered in excess of what is due or to become due under the judgment.
- Section 3(4) opens with the words ‘Subject to the provisions of this ACT…’ and so unless the interest is due under the judgment or order under the Interest on County Court Judgements Order, it cannot be included in the Charging Order
- The amount of interest depends on the amount of interest due on the judgment.
- Some CCA regulated agreement judgements do not have an interest post-judgment clause.
- Even if there is an interest post-judgement clause on a CCA regulated agreement the lender still cannot enforce these rights by levying contractual interest – unless that rate forms part of the judgment, the lender would have to bring seperated action for the interest. (Supreme Court Practice 1999 Ed. Para 42/1/24 and Re European Central Railway 1877 4 Ch.D.33
- The claimant may try to use s3(4) COA to claim that an equitable charge attracts interest on the principle sum. However, the rate of interest payable under an equitable charge depends on its terms. In the case of a CO, the judgment debt would be in essence the principle sum. The rate payable on this sum is prescribed by statute or set out in the judgment. S3(4) wouldn’t justify applying a different rate.

hullcity2305

Thanks Eggbox. Would you be able to advise also. Would this charge be a restriction? Or could they force a sale? Wifey is rather worried!

eggbox

hi hullcity2305


First of all tell your wife not to worry as you won't be forced to sell your house. Just to clarify, though, you do have a CO but, as your property is jointly owned and only you owe the debt; the creditor can't attach the CO to the property itself. What the CO is attached to is your "Beneficial Interest" in the property (which means any money you may receive when you sell the house.) So the creditor can only register this CO against the property as a Restriction which is only a notification of the CO. As you will read on the thread, you can still sell your house without being obligated to pay off the creditor when you sell.


Technically, the creditor can try to force a sale having the CO. However, as you will see if you read through this thread; there are protections in place for family and primary residencies that make it, virtually, impossible for the creditor to force a sale. Certainly no chance where there are children or if the debt is under £25,000.


On the whole of this thread, you will also only find one instance of a creditor trying to force a sale of a property. That was also where the debtor was a sole owner of the property (which don't have the same protections as joint owners.) As the poster relates, the Judge was not going to sanction the sale under any circumstances.


Can I ask who the creditor is and which, if any, solicitor you are dealing with?

hullcity2305

Thanks again Eggbox. The debt is for £9600 with Creation finance re an unsecured loan. The debt is being dealt with by Drydens Fairfax solicitors on their behalf. I am not using a solicitor at the present time. Went to CAB yesterday. Posted on Debtfreewannabe.

eggbox

Not as "unsecured" as you thought I bet!


Are you repaying anything to Creation at the moment?