Charging Order? The myth

hullcity2305

Hi all,
Most of the posts on here are, in relation to charging orders having a bearing on a property sale. My question is this. Would a creditor be more likely to push for a sale (based on BI on a joint property) when, clearly it would take a long amount of time to repay the debt owed adhering to a DMP payment? The CO is on our family home which we have no interest in selling.

eggbox

Its fair to say original creditors (high street banks in most cases) were happy to take a long term view on the debt being repaid as, until recently, CO's were repaid in around a 4-6 year period when people sold up and moved elsewhere (plus there were reputation issues in being seen trying to sell customers houses.)

But the recession has altered this view now as people haven't been able to afford to move so easily as in the past. Because of this, banks have started offloading the CO's gained (and for a fraction of their value might I add) to lowlife, bottom feeders like Lowell, Capquest, Marlin and the like who deliberately target profit from misery.These scumbags would clog the Courts tomorrow, with OFS applications, like a shot if they thought there was any chance of obtaining a sale as they have no such concern regarding their reputation.

Happily, there are protections in place for family and primary residencies which mean they (hardly ever) try as its a waste of their time and money. Court stats reflect this fact as around 65,000 CO were granted last year with only around 265 OFS being granted. And there is no evidence those OFS that were granted were for Consumer Credit debt. My guess is that most were related to divorce proceedings where one partner won't agree to sell the property.

But the above facts doesn't mean creditors will just sit back. They will try to coerce higher payments by making you think they CAN sell your house. Even resorting to sending you a valuation of your property to try and worry you senseless. So be aware of this as my ex pays a £1 a month and they have threatened EVERYTHING to raise that figure but no OFS has been issued. So understand THEY know they won't succeed so don't play their game and stay firm on not paying any higher than you currently are (and less if its stretching you!)

hullcity2305

Thank you for that eggbox. Yet another area covered by your expertise. I can honestly say that without this website and this thread in particular, my wife and I would to say the least feel intimidated by what has happened to us. Thanks again for sharing your knowledge.

hullcity2305

I have today received a letter from Land Registry advising me of an application to register a restriction. Am I OK to post what it says on here or is that not a good idea. Thought it might be of help if I could!

Lorraine_Brown

My husband has credit card debts and contacted a debt charity about six months ago to help him sort them out. They contacted all the debtors and he arranged to pay £1.50 a month to each of them and the interest was frozen. He has just arranged to make a proper monthly payment of £150 to be split between the debtors.
We now have our house up for sale and are hoping to move to a newer house.
We will pay for the new house with the sale of our current house plus some money that I've inherited. We will be mortgage free.
Can his debtors do anything at all with regards to claiming money from the sale of our house? The majority of the money that went to buy our current house was mine and the money that I've inherited is mine, so effectively the new house will be paid for mostly by my money.
My husband is keen to pay off his debts and hopes to increase the payments once we are free of paying a monthly mortgage.
Any help with this question would be appreciated.

harisumo

Hi Lorraine Brown, normally Eggbox is along to respond being the one on this thread with most expertise in these matters. Your creditors would only be able to act if they had court orders / restrictions in place on your husband's debt and on his share of the property, Although this thread is very long reading through it is worthwhile as if will give you some idea of what a restriction is. If there are no court orders in place and you were to buy another property the creditors could only 'secure' debts on your husband's share if they obtained county court judgements, so you can see there potentially ways around this happening. I am no expert and am just speaking from my own experiences, as I say Eggbox is the best poster on here for advice.

Nuttymut

I really haven't got a clue where to start.

My (now ex) partner and my daughter have had a terrible year.

I've been quite poorly and that's had a huge impact on my family and my relationship. I believe it's important that I just outline how ill I have been as I am hoping that information will allow someone to perhaps offer some advice on how I may progress events.

I have been with my partner for 28 years. Our daughter is 7 years old. I am 52.

I was diagnosed with depression in February 2000. Yes that's right 2000. That diagnosis came some 25 years late. I have been suffering with depression since I was about 11 years old. I was abused physically, mentally and emotionally by my Father from the age of 11 to the age of 21 when I left home.

I am sure you will all want to think that when I was diagnosed with depression in 2000, and as it was late in coming, that the NHS would have been of some help to me. That's not actually happened. I have bumped along the bottom for the last 14 years and no amount of medication has really solved the problem.

I haven't worked for the last three years and received no benefits at all. Not a dime.

In May 2014 my GP accepted my own diagnosis that I have a rare sleep disorder and she augmented my medication with melatonin. I've also used bright light therapy and have been so well I've managed to find work and hold it down.

My relationship broke down in May this year. I have recently been told I probably have Adult Attachment Disorder which would explain my jealous and possessive behaviour with my ex partner.

All in I am totally exhausted. On Xmas Eve I saw a consultant psychiatrist and he's referring me for psycotherapy. There appears to be some hope for me going forward. I have lost everything I have and currently do have a 24hr number I can ring if my feelings turn to crisis. My condition has caused huge sleep deprivation in the past. I have the odd day now where I struggle but overall we are managing my symptoms and I am fit for work.

In 2007 I put my company into voluntary liquidation. I had tried to run my own company in a bid to work around my condition. I had a manager who wasn't really pulling his weight and I tried to change him into something he was never going to be. I failed.

I had signed some personal guarantees on some plant that had been purchased for the business. The plant was never recovered by the liquidator. I had terrible depression when all this happened. The two plant companies took out charging orders on the family home.

The family home has now been sold subject to contract. We have been looking at the so called charging orders that we thought were in place against the house. They appear to be restrictions put in place whilst a temporary charging order was in effect.

I've read a very well supported thread on another website and that lead here. The contents are suggesting to me that my solicitor isn't perhaps acting completely in my best interests. Although I may be doing him a dis-service. I have checked and the restrictions on the house are on Form K. I have gone so far as to tell my solicitior in writing that all we need to do is notify my creditors that the house is being sold. However, not only has he said it's necessary but he has also asked my creditors for redemption statements and informed me I need to settle with my creditors.

The sums are below
House sale 235,000
Mortgage 150,000
Joint Debenture 20,000

Debts relating to restrictions
Company A 45,000
Company B 45,000

We have been told that if I do not agree a figure of redemption with my creditors then we will lose the buyers as the restrictions will not be lifted.

I'd like to try and fight this situation. I really don't know how and I don't know if it's something I can win.

Hence my post here.

I would welcome any advice to help me to prepare a plan that will help me to fight this situation.

I really am not sure where to start that plan.

I am happy to answer anymore questions and if anyone knows anything about my legal rights as someone who has been (terribly) mentally handicapped whilst all this has been happening I would be grateful.

I've had a terrible time. And finding out that the abuse I thought I suferred during my teens actually started when I was born has sort of added some enormous personal weight to my already overloaded baggage. I am exhausted. I don't know how much more I have to give.

I have prepared a draft document to send to my solicitors instructing him to complete an RX3 form and to write to the two Restriction holders informing them the property is to be sold. I've also told them not to undertake any additional correspondence with them without my instructions.

Because I haven't worked we have managed to build up some more debts, such as an overdraft and some credit cards. I am using my salary at the moment to clear all those.

I do not live in the family home. I live with my Mum now in a sort of bedroom in an outhouse. It sounds worse than it is. But my Mum is selling her property and I would like to try and buy a small home of my own. To do so I need a deposit and I would like to use my equity as such.

Thank you for listening and I would genuinely welcome any advice

Nuttymut :-)

eggbox

Lorraine_Brown wrote: »

Any help with this question would be appreciated.

Hi Lorraine, sorry for not replying to this earlier but my notifications haven't been coming through? Creditors can only lay claim to any proceeds of the sale of a house if they have Court approval to do so ie a Charging Order. Without that they can't do anything.

But if your husbands name is going to be on the Land Registry deeds of the new property, then if a creditor does a search of the property they could go after a Charging Order. So a way around this is to put the house in your name and to put a Voluntary Charge in the name of your husband on the deeds for the value of his share of the equity.

eggbox

Nuttymut

Your Solicitor is wrong in what he has stated regarding your Restriction. If you ask him to read the actual terms of the Form K Restriction he will see for himself that it's the BUYER (or their solicitor) that has to notify the Restriction Holder and not the seller.

With regard to selling the property, once this has happened then there is no further obstacle to registering the new owners details at the Land Registry as the Restriction is then automatically cancelled as being "overreached". The Land Registry will confirm this (and have done so on this thread) but you can point your Solicitor to the LR Practice Guide 76 Section 4 Para 3 which explains this.

Unfortunately, the majority of Solicitors are unaware of this and don't distinguish between a Charging Order made on sole owners and joint owners of property. Most Solicitors are also so far up their own rectums that they will still say they are right even when you have shown them the above evidence?

Sadly, if you do have a Solicitor unwilling to help you then you may well lose your buyer if the above facts are not taken on board. There is no legal obligation placed on a seller of a jointly owned property to hand over any money at the point of sale. Solicitors have just been doing this automatically so they think its the norm.

So the facts are irrefutable if you want to fight your Solicitor but, if he disagrees, ask him to provide evidence showing where it states you have to pay off the CO at the point of sale (rather than him just saying it has to be done)?

Nuttymut

It really does seem inadequate when I say thank you.

But on behalf of my daughter and me may I say thank you so much for your help. I will advise my solicitor of my instructions. I mistakenly believed it was the sellers duty to inform the Restriction holders.

I will action this myself with an instruction directly to my solicitor to tell him he needs to write to the buyers solicitor and I will copy the section of the Guide 76 to make my point.

May I ask for the avoidance of any doubt please what the term "trust" means in the paragraph you refer to.

I've pasted it below

Entry of a restriction does not protect the priority of the interest to which it relates for the purpose of section 29, Land Registration Act 2002. A charging order affecting only the beneficial interests under a trust is liable to be overreached along with those interests by the operation of sections 2 and 27, Law of Property Act 1925. Accordingly, a Form K restriction will be usually be cancelled automatically, without application, when a transfer which appears to overreach the beneficial interests is registered.

You have been so kind and I am very grateful indeed.

Bless you, may the road rise up ot meet your feet