Charging Order? The myth

eggbox

It's the inability of the Solicitors being able to understand the Form K requirements to allow a disposition to proceed that is the problem.

Have replied to PM

Rockit

Ah brilliant, will have a look now.

Rockit

Can anyone please tell me who the applicant is in a form K restriction? Is it myself, the creditor or the purchaser of our property?
Mine reads as below. Thanks muchly!

No disposition of the [registered estate or registered charge] is to be registered without a certificate signed by the applicant for registration or his conveyancer that written notice of the disposition was given to [name of person with benefit of charging order] at [address for service], being the person with the benefit of [an interim][a final] charging order on the beneficial interest of [name of judgment debtor] made by the [name of court] on [date] [Court reference].’

DAKOTA45

OMG!! Just had the worst news ever… the creditor's solicitor has just written to say that I have a week to pay the £30k or they are making an application for an Order for Sale… I am in bits! I can't even talk to my husband as he is halfway to China on a plane… I'm having panic attacks and all sorts!!

DAKOTA45

Gosh… it's quiet in here!

Does anyone know, please, whether it would be possible for me to bring a counterclaim against a pending Order for Sale?

eggbox

Hi Dakota will reply shortly!

DAKOTA45

eggbox wrote: »

Hi Dakota will reply shortly!

I guess it will be a Defence & Counterclaim…

Having a think… but for sure, the fact that he interfered with my sale when he could have been paid from the proceeds thereby saving court time and the extra costs involved, was not his finest hour…

Hmmm...

eggbox

Right, first of all this is a "threat" to try for an OFS not an actual application to do so. It's designed, however, to get you into the mental state you are currently displaying. So you need to understand that and stop stressing or else you are doing their work for them.

When people are in this state they make irrational decisions by borrowing money from other sources (often friends and family) who they then cannot repay. So the first thing to do is understand this fact and see past the "threat" of what they say they will do if you don't pay.

The second thing you do is write a polite letter (placing "Without Prejudice" at the top of the letter.) In the letter inform them that you have contacted the Ministry of Justice on the matter and they have advised you that there are protections in place for "Primary and Family Residencies" which yours is. You further state that they confirm this in their 2011 consultation paper (here on Charging Orders where, at 3.1 of the paper, they state,

"the creditor may apply to the court for an order for sale (but
case law exists to protect family or primary residences so this is only likely in cases concerning
shares, unit trusts or secondary properties or land)"

The case law, they have advised, they took into account was the following;

Caselaw - 'Mesher' type orders – provides protection as long as a minor is resident at the property concerned. The use of such orders was confirmed by a ruling in the case of Harman vs. Glencross 1986. Further powers are provided in the Trusts of Land and Appointment of Trustees Act 1996.

Caselaw - Royal Bank of Scotland vs. Etridge 2001 - This case established the precedent that, where a joint loan has been taken out by, with a jointly owned property as collateral, such as the matrimonial home, it is incumbent on the lender to explain to all lendees at the time of signing the potential consequences of default. In this case it was ruled that one party had signed the forms without being informed by the lender of the possible consequences and that the Royal Bank of Scotland did not have the legal right to enforce by way of charging order.

Caselaw - Bank of Ireland Home Mortgages vs. Bell 2001 - This case established the circumstances in which an order for sale would be granted, even if it concerns a family home. The equity available on the property must be sufficient to pay off the judgment creditor and all other in

Therefore, any application to the Court regarding an OFS would be defended using the above case law to protect the sale of your family home.

You also explain that you have previously placed your house up for sale and received an offer to purchase which would have enabled payment to your client. However, due to the actions of your client who contacted the buyer (don't use the word threatened), the buyer pulled out of the sale as they felt intimidated. Should this matter go to Court, a statement will be provided, from the prospective buyer, to verify these actions.

You further state that your partner is having to work abroad to make ends meet and you are currently finding it difficult to locate employment due to your disability.

However, (and this is important to add!) as soon as your husband returns to the UK you will be seeking to sell the house as and when you can. However, if your client is so desperate for repayment I am willing to make a token repayment of £1 per month until the house is sold.

Finally you must ensure 3 things,

1. Send by recorded letter
2. Don't rant or try to score points in the letter just use the facts above
3. Ensure you include the RED bits

DAKOTA45

Hi Eggbox… thank you so much for the advice…I will look into those authorities that you have included.

Yes, I believe you are right in that their letter was intended to get me into a state…(and it worked)

I was so ill I had to go to the GP who prescribed medication to help calm me down, but it's not easy to prepare a case when you are 'out of it' so I'm between a rock and a hard place...

I just wonder why, if they were going to go straight for the OFS, they bothered with the modified restriction? They already had a CO in place and that would have been enough to go for the OFS.

They have really done a number on me...:(

I have multiple health issues including an anxiety disorder, I am taking anti ulcer drugs, anti depressants, heart drugs, painkillers for arthritis and an ovarian cyst, anti spasmodics for IBS, my ears don't work properly and I have disabling tinnitus to boot… and since retiring on a very small pension I am in receipt of pension credits…
I am sure my GP would write a letter for me.

Ok… I need to lie down now and have a think… I will report back with any developments...

eggbox

DAKOTA45 wrote: »

I just wonder why, if they were going to go straight for the OFS, they bothered with the modified restriction? They already had a CO in place and that would have been enough to go for the OFS.
They have really done a number on me...:(

The modified Restriction wasn't planned against you, personally, it was BL understanding that that Standard Form K Restrictions don't offer creditors the security they, perhaps, expected? So you need to stop feeling you are being singled out - you're not.

But you must understand that the intention of the letter you have received is not to proceed with an OFS, it's an attempt to try and get you to start paying the debt owed. If these letters were serious then Google would be packed full of instances where creditors have proceeded to an OFS as the majority of people with CO's have no chance of paying them off in full. But try and find any?

The details I've outlined for your response, therefore, is simply your response required to let them know you aren't scared or intimidated by their "threats" of an OFS. It will also let them know that is because you are well versed with the Case Law in this area, and what your rights are, all backed up from the MOJ.

Judges also have total discretion whether to grant an OFS, and they would have had to have taken leave of his/her senses to grant an OFS given your circumstances.

I know it can be worrying at first but you have to equate the threat of an OFS with the facts of how often they are applied for and, better still, how often they are actually granted. Concentrate on that and the fear they have, deliberately, implanted in your mind will start to recede and you can deal with them easier.