Charging Order? The myth

Taffybiker

eggbox wrote: »

Sound like a plan to me!

I appreciate all your good advice eggbox. Many thanks for that.

eggbox

This thread is primarily aimed at large, financial institutions and not small businesses or person to person disputes.

It is aimed at those banks that happily charged a high rate of interest for "unsecured" lending (which means a larger interest payment collected in lieu of having no asset to "secure" the debt.)

But, hey, guess what? When the economy crashes and ordinary, working people are losing their jobs and struggling to repay debts; what do these banks do? Lower interest rates to help struggling customer (easily done as the base rate plummeted to near zero), take lower repayments until things improve?

No, instead the banks prefer to push up interest rates to levels of 20-30%, in an attempt to recover cash as quickly as possible, but which forces many customers into a position where they are forced to default on their repayments. The banks then use the law to turn their "unsecured" debt into a "secured" debt by being allowed to attach it to the customers assets. In most cases that happens to be a family home.

There is also no redress to the customer in respect of the high rates paid for the "unsecured" loan or credit card payments. So don't expect people who have suffered under these circumstances to worry about these creditors concerned; the vast majority of which have already wrote off the debt for accounting reasons and have cast off customers to the perils of dealing with scumbag debt collection companies.

eggbox

The extortionately high interest rates charged by most financial institutions is scandalous. However, they argue that so many people default on paying their debts that they have to charge those who do pay even more to balance things out. So the payers are subsidising the defaulters![/QUOTE]If you're naive enough to believe this then it's not surprising you have the view you do? Only a very, small proportion of lenders default (for high street bank lending) and the higher rate of interest charged for "unsecured" loans factors this in.

A nice thought but, again, very naive of how banks operate. Money lending is a business like any other and survives on risk/reward (who do you think underwrites the Payday loans?). But this thread is highlighting the banks weren't taking the risk involved in charging their higher rates for "unsecured" lending as they were able to "secure" if the debtor defaulted.

It's called "lobbying" by the banking system.

DAKOTA45

This is as naive as it gets. Small businesses struggle to get credit as the banks have cranked up their lending criteria. But it was banks (with help from poor Government regulation) that were the "scammers" creating a system that allowed sub prime lending packages to be sold with Triple A ratings, hence, the whole system crashed.


Hear, hear!! (Debtor's are not 'crooks'… but why the bankers are not all behind bars instead of raking in fat bonuses…That is definitely a crime!!).

Thrugelmir

Government was at fault in many respects. Brown\Balls fell in love with the concept of light touch regulation that the US adopted. In many respects this was the root cause of where the UK is today. Going to take some years to reverse the lax lending that was allowed. Defaulting on debt comes at a cost to the individual concerned. As leaves an indefinate black mark somewhere in the financial system.

KAWM

HI, Just signed up to join in this thread. Im currently helping some friends of mine who are selling their house. They have 4 restrictions, 2 each, and 1 charging order in one of their names, as well as an expired Nram mortgage.

One of the restrictions is being handled by TBI who over the years they have had the restriction have trebled the balance to over £9000 throughout interest, which they say is discounted from the original agreements rate to 8%. They have ignored requests for the copy of the agreement they are relying on to enforce the debt. Can this therefore be force ably removed in some way?

The other three have been asked for copies of ccj's etc but have so far not sent them .

The charging order company have indicated they will take a lower figure.

The problem is, my friends will have money left after they sell and pay everything in full, around £15,000. The thing is these restrictions and charge come to £43,000 (plus the mortgage). They aren't being greedy but need the money out of the property to be able to live having suffered ill health and now being unable to work, they've both had a right time of it.

I saw earlier in the thread that there is a solicitor who can work on these cases and I would welcome their contact details and any other advice that anyone can give.

Kevin

eggbox

KAWM wrote: »

They have 4 restrictions, 2 each, and 1 charging order in one of their names, as well as an expired Nram mortgage.

Can you clarify this info a little, please. Restrictions are notifications of a Charging Order having been made against only one of the joint owners. If a Charging Order is registered against the deeds it usually means both owners are responsible for the debt (and has, therefore, been registered as an Equitable Charge). Can you clarify what is actually registered on the deeds?

KAWM wrote: »

as well as an expired Nram mortgage.

Again, for clarification; do you mean the mortgage has been repaid?

KAWM wrote: »

They have ignored requests for the copy of the agreement they are relying on to enforce the debt. Can this therefore be force ably removed in some way?

To obtain a CO the creditor must have first obtained a CCJ. Once a CCJ has been obtained, this supersedes the original agreement and there is no longer a requirement for the creditor to provide the agreement under an s.77/78 request under the CCA 1974. If there is another reason the agreement is required you would have to send a SAR (subject access request) to the original lender. This will only provide info for the past 6 years, however.

KAWM wrote: »

The other three have been asked for copies of ccj's etc but have so far not sent them .

Your best bet to obtain copies of the CCJ is to request them from the Court involved. You friends should have been noitified a CCJ was being sought (and subsequent granting of such); if they can prove they this was not the case it may be grounds to set aside the CCJ's concerned (but there has to be convincing reasons why they weren't notified and able to defend)

KAWM wrote: »

The charging order company have indicated they will take a lower figure. The problem is, my friends will have money left after they sell and pay everything in full, around £15,000. The thing is these restrictions and charge come to £43,000 (plus the mortgage).

Again if you could just clarify this bit a little it would help

If you could also explain what the terms of the Restrictions/Charging Order state on the deeds it would help advise what your friends options are.

KAWM

Thanks for your reply.

eggbox wrote: »

Can you clarify this info a little, please. Restrictions are notifications of a Charging Order having been made against only one of the joint owners. If a Charging Order is registered against the deeds it usually means both owners are responsible for the debt (and has, therefore, been registered as an Equitable Charge). Can you clarify what is actually registered on the deeds?

There are a few different types:

One says: (14.05.2002) CAUTION in favour of HSBC BANK PLC care of DG SOLICITORS of 12 Calthorpe Road, Edgbaston, Birmingham, West Midlands B15 1QZ.

Three say: (28.01.2004) (26.02.2008) & (11.12.2008) RESTRICTION: No disposition of the registered estate 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 TBI Financial Services Limited (the other two are different) at The Robert Cort Building,Elgar Road South, Reading RG2 0DL being the person with the benefit of interim charging order on the beneficial interest of ***** ******** made by the Newcastle Upon Tyne County Court on ** November 2003 (case number NE******)

and one more says: (11.03.2005) Equitable charge created by an interim order of the Gateshead County Court dated ** March 2005 in favour of Universal Credit Limited.

Again, for clarification; do you mean the mortgage has been repaid?

No there is a balance left which they will pay.

The Equitable charge one was difficult to track the owner down, until eventually they wrote a letter and said they would be open to a bid on the amount outstanding. It then turned out my friends had been paying them £5.00 per month for 10 years and had forgot about it. Also the letter they have sent say that only one of them (Mrs) is the debtor on this.

The others, my friend claims, have not been in touch for years, and TBI refused to send proof they had written to them but said they had.

The other restrictions are being held by Brachers and Capquest if that helps.

Thanks again.

eggbox

Hi Kawm

Regarding the Restrictions registered; they are standard Form K and, as such, are very easy to comply with (as this thread outlines) upon selling a property.

Cautions were used prior to the 2003 LR changes and I will defer to Land Registry Representative to explain better how they are complied with on selling a property.

I would also like the LRR's comments regarding the Equitable Charge registered. It's my understanding these can only be registered if the property is solely owned or all owners are responsible for the debt? So we will wait until LLR comments on what you have said regarding only one owner being responsible for the debt?

I queried the mortagage as you said it had "expired"? I'm still not certain what is meant by that if you could clarif, please?

Finally, can I just ask what the current, approximate, equity is in the property concerned and what the approximate value of all debts that are registered against it (including the mortgage). That info will help much better in forwarding advice.

KAWM

Thanks for another helpful reply.

LRR's comments regarding the Equitable Charge registered. It's my understanding these can only be registered if the property is solely owned or all owners are responsible for the debt? So we will wait until LLR comments on what you have said regarding only one owner being responsible for the debt?

Yes thats what I thought as well.

I queried the mortagage as you said it had "expired"? I'm still not certain what is meant by that if you could clarif, please?

It was an interest only mortgage that was up in May but Nram have given some extra time because the house is being sold.

Finally, can I just ask what the current, approximate, equity is in the property concerned and what the approximate value of all debts that are registered against it (including the mortgage). That info will help much better in forwarding advice.[/QUOTE]

Sale Price: £74,500
Nram: £22,000
Restrictions: £23,000
Charge: £19,000

Equity to be released on sale is only £10,500 less selling costs at this stage.