Charging Order? The myth

eggbox

iwillgetthereintheend wrote: »

thank you very much eggbox for the clarification.....I may have to move out and into rental as i cannot afford my mortgage at the moment due to ill health so i was just wondering what will happen to the restriction etc and will it change anything.....

If you're moving out and selling then it's just a matter of selling up and off you go. The Restriction will be cancelled by the LR when you have sold as it will be deemed to have been "overreached" on the trusts interest (or not relevant anymore).

I have to stress again that the debt doesn't disappear but being in rented property pretty much stuffs any creditor pursuit anyway.

eggbox

Lillie9 wrote: »

Hi everyone,

I have a house sale going through and have found this thread most helpful to my predicament.

My ex-husband has a large debt with HSBC and that debt - an unsecured loan - is now subject to a charging order on my house. The house is still in both of our names. My ex-husband's debt is soley in his name.

So am I right in thinking that when the house sells, my solicitors do NOT have to pay HSBC directly??

I have tried to explain this to my solicitors but they have told me that they ARE obliged to pay HSBC directly.

If my solicitors are right then I will have to pull out of the sale

Please help!

Hi Lillie,

No your Solicitor is wrong and you should tell him to contact the Land Registry to be "updated" on what a Restriction is and it's powers. You can also show him what the Land Registry Solicitor sent me on the matter (posted below to educate him).

Remember, Solicitors can be a fairly arrogant bunch as it comes with the turf (and I'm speaking as the Father of a Solicitor!) but you should explain to him that he has a legal duty to act on YOUR best interests and not HSBC. Get him to show you where it states you LEGALLY have to pay and when he can't he should then do as you tell him and not pass any money to HSBC (and don't be afraid to remind him you are PAYING HIM to represent your interest on this sale!)

Received today from LR Solicitor;

LAND REGISTRY RESPONSE

"The provision of the Certificate mentioned in the Form K restriction means that the registrar is not prevented from proceeding with the application to register a disposition (for example, a transfer or charge) and the registration can proceed.

The certificate does not affect the restriction entry. A restriction in Form K may be removed from the register in the following circumstances.

Automatic cancellation

When a transfer of property is registered (following receipt of the required certificate) the restriction may or may not be automatically cancelled, depending on the circumstances of the transfer. If, for example, the application is to register a transfer by two or more proprietors to a third party for value, the trust interests will be overreached and the form K restriction will usually be cancelled"

He should know already, but get your Solicitor to read and understand you have a Form K Restriction and all that is required to satisfy that when selling your house is for the Purchasers Solicitors to notify the Restriction holder (HSBC) that you have sold the property.

Lillie9_2

Thank you very much for your advice Eggbox!

I have arranged an appointment with my solicitor to discuss this issue as they think I'm wrong.

Hopefully I'll get them to understand!

Sparklyfairy

Lillie9 wrote: »

Thank you very much for your advice Eggbox!

I have arranged an appointment with my solicitor to discuss this issue as they think I'm wrong.

Hopefully I'll get them to understand!

Hi Lillie, I just wanted to add that if you're solicitor won't budge (and some will truly believe they are CORRECT on this matter..) it may be worth it to find another one before you sell. There ARE solicitors out there who know this very distinct difference but it's just a matter of finding them. Good luck & stick to your guns, as Eggbox said you may have to remind them that they should act for YOU (and perhaps retrain for their job as a parting comment before you leave the door...!lol) But please keep us updated & let us all know how you're getting on XSF

eggbox

Lillie9 wrote: »

Thank you very much for your advice Eggbox!

I have arranged an appointment with my solicitor to discuss this issue as they think I'm wrong.

Hopefully I'll get them to understand!

The key is to see if they understand the difference on how a CO can be registered for a debt registered where both owners are the debtors as opposed to only one of the owners being responsible for the debt (as in your case)

But if they do still insist it has to be paid ask them to show you where it legally states you are obliged to and report back here with what they say, ok.

Lillie9_2

Thank you both for your advice I promise to keep this thread updated.

Lillie9_2

Hi all,

I've got an update that is not good news for my situation. :mad:

My Solicirtos have been i contact with HSBC and have received a letter from them saying that they wish to claim the amount on the Charging Order when the sale goes through, so my solicitors have reiterated to me that they intend to pay HSBC directly if the sale proceeds.

I'm really stuck now.

Can I avoid this by instructing another solicitor? Or, because the HSBC are now aware of the sale, is there no way around it??

Your help is greatly appreciated.

thechippy

I think you need another solicitor.

How are hsbc aware of a possible sale?

Lillie9_2

My solicitors contacted them to enquire about debt owed to them.

thechippy

Well I don't think they should have done that.
They have to act within YOUR best interest and do as you request, YOU are the client.

I'd change solicitor, who should have no contact with hsbc. The only obligation they will have is to tell hsbc that the sale has taken place after the fact.

Hsbc should have no way of knowing that the property has been sold until told afterwards. You then have the proceeds and it's too late.