Charging Order? The myth

eggbox

For a creditor to obtain a CCJ they only have to send the summons to your last known address (ie if you haven't bothered to update them then your last address is all they have to send to)

If your creditor gets a CCJ, though, it now seems pretty much unstoppable if they go after a Charging Order. However, as Fatbelly says, this thread is highlighting that if the Charging Order is only against one of the joint owners of the property then it can only registered as a Restriction and not an Equitable Charge.

A Restriction only has the power to notify a creditor if you sell your house and not, as an Equitable Charge would have, an automatic right of payment.

You do need to do everything you can to get the CCJ set aside, however, as without that the creditor cannot proceed further.

harisumo

I expect it may have been asked before but is it possible for the creditor to obtain an order to force the sale of a property in these circumstances, ie sole debt charging order but joint mortgage, that's my biggest worry.

fatbelly

harisumo wrote: »

I expect it may have been asked before but is it possible for the creditor to obtain an order to force the sale of a property in these circumstances, ie sole debt charging order but joint mortgage, that's my biggest worry.

Unfortunately the answer is not 'no'. From National Debtline:

•if the debt is in your sole name and the house is in joint names, the creditor gets an ‘interest’ in the house once the charging order is made final. This means the creditor can apply to the court for an order for sale to realise their ‘interest’ in your house. All joint owners (or a married person who is not a joint owner but has an ‘interest’ in the property) should be part of the court proceedings so they can explain their case to the court as well. They should be sent notice of the hearing and be allowed to attend.

However, these things are really rare. I've never heard of one being granted, and I've been involved with court desk work for a few years.

harisumo

Thanks for the reply, so if the charging order is actually registered as a Restriction then it is still theoretically possible for the creditor to force a sale. It is all very confusing as after seeing this thread I had assumed that that was out of the question if it was only registered as a restriction.

FBaby

I haven't read the whole thread, but a quick question maybe you can help me with. A charging order was placed on the house my ex and I owned as a result of debt in my ex's sole name (7 years ago). I was never sent a notice of the hearing or offered to attend. It went as a restriction on the land of registery. Subsequently, I bought my ex out and the mortgage/deeds are now in my sole name. Does it make a difference if I were to sale the house?

eggbox

FBaby wrote: »

I haven't read the whole thread, but a quick question maybe you can help me with. A charging order was placed on the house my ex and I owned as a result of debt in my ex's sole name (7 years ago). I was never sent a notice of the hearing or offered to attend. It went as a restriction on the land of registery. Subsequently, I bought my ex out and the mortgage/deeds are now in my sole name. Does it make a difference if I were to sale the house?

Was this done by remortgaging or did you buy him out with cash? My advice would be to check with the Land Registry first to see if a Restriction is still registered. If it isn't then you have no problem.

It's a strange one as your Solicitor should have had to deal with the Restriction when sorting the sale? Did he do this? The Restriction states that the buyers Solicitor should notify the creditor when a transfer is being made (to allow the Restriction to be removed)

If your Solicitor did that but the Restriction is still registered then you need to contact the LR to get it removed.

If your Solicitor didn't do this, though, it may cause a few problems with the Land Registry as the creditor should be informed and may (but may not given the time factor) want to take some action.

Please let the site know what happens as it will be invaluable help to other members on this site.

eggbox

harisumo wrote: »

Thanks for the reply, so if the charging order is actually registered as a Restriction then it is still theoretically possible for the creditor to force a sale. It is all very confusing as after seeing this thread I had assumed that that was out of the question if it was only registered as a restriction.

Theoretically, yes, but the court statistics show that only 0.3% of Charging Orders progress to an Order for Sale.

This reason for this stat is because most debts are for consumer debts and creditors know they won't get an OFS on this type of debt unless you own more than one property so don't try.

The one's that do progress are for things like council tax debts where the council has a legal duty to pursue the debt for payment and, also, where couples split up and the one partner wants to realise their equity.

To put your mind at ease search the internet for OFS and see how hard it is to find any? Then search for people having CO's put against them and see the vast difference!

FBaby

eggbox wrote: »

Was this done by remortgaging or did you buy him out with cash? My advice would be to check with the Land Registry first to see if a Restriction is still registered. If it isn't then you have no problem.

It's a strange one as your Solicitor should have had to deal with the Restriction when sorting the sale? Did he do this? The Restriction states that the buyers Solicitor should notify the creditor when a transfer is being made (to allow the Restriction to be removed)

If your Solicitor did that but the Restriction is still registered then you need to contact the LR to get it removed.

If your Solicitor didn't do this, though, it may cause a few problems with the Land Registry as the creditor should be informed and may (but may not given the time factor) want to take some action.

Please let the site know what happens as it will be invaluable help to other members on this site.

Thanks a lot eggbox for getting back to me.
Sorry, I think my question wasn't clear at all (got the flu with 102 fever, so not too clear headed!!). The property has not be sold yet, not even for sale, but I am considering it and want to know where I and my ex would stand if I did.

I did remortgage the house, although not grately and got the mortgage/deeds under my name only, but this was a couple of months after the CO was put in place. The loan company never informed me that they were taking my ex to court for it (unsecured loan), I did manage to find out from my ex and tried to negotiate with the company directly (offered to pay half, they wanted more but couldn't raise the funds myself), but was never informed of the court date so wasn't given the chance to go to hearing and put my case foward.

I have tried desperately over the years to find a solicitor that could provide me with proper advice, but none I have approached have enough knowledge of charging orders in these circumstances. I have accepted that I would have to pay the full amount + interest upon the sale of the house, but maybe the way the CO was put in place in the first place could be challenged?

eggbox

FBaby wrote: »

Thanks a lot eggbox for getting back to me.
Sorry, I think my question wasn't clear at all (got the flu with 102 fever, so not too clear headed!!). The property has not be sold yet, not even for sale, but I am considering it and want to know where I and my ex would stand if I did.

I did remortgage the house, although not grately and got the mortgage/deeds under my name only, but this was a couple of months after the CO was put in place. The loan company never informed me that they were taking my ex to court for it (unsecured loan), I did manage to find out from my ex and tried to negotiate with the company directly (offered to pay half, they wanted more but couldn't raise the funds myself), but was never informed of the court date so wasn't given the chance to go to hearing and put my case foward.

I have tried desperately over the years to find a solicitor that could provide me with proper advice, but none I have approached have enough knowledge of charging orders in these circumstances. I have accepted that I would have to pay the full amount + interest upon the sale of the house, but maybe the way the CO was put in place in the first place could be challenged?

Hi Fbaby

The first thing you need to do is contact the Land Registry to establish a) if any Restriction is still registered and b) whose details are showing on the register (are your ex's still there?). This will determine what you need to do next.

If, as you originally stated, the debt was in your Ex's sole name then it would not be possible (since the LR 2003 rule changes) to register the Charging Order as an Equitable Charge (which has to be paid off when you sell the property) against your jointly owned property on the Land Registry.

Instead, it would be registered as a Restriction and only against your Ex's "Beneficial Interest" (or only his half of the equity in the property as your half is not affected.) A Restriction only has the power to notify the creditor of a sale being made; there is no legal obligation to pay a creditor when you sell your home.

But the question still has to be asked why your Solicitor never brought up the Restriction with you when you remortgaged as he would have had to deal with the Restriction to remove your ex's details from the Land Register? This is why you need to find out what is on the LR details and also ask your Solicitor if he complied with the Restriction (if it's still showing) when you remortgaged.

Again, please let us know the outcome!

SuziQ

I am relieved to find this thread today, although I do have a fixed-fee appointment with a solicitor on Tuesday.I would just like a little reassurance to get me through the weekend, if possible!!
My home is owned with my ex, we have yet to be able to divorce because of his awful financial decisions but have been separated for over 3 years. He has a debt with a landlord that was applied some years ago and a charging order was granted on my home. I have read a letter addressed to him from the solicitor dealing with that case this morning- I think he deliberately addressed it here, hoping I would open it, as my ex is obviously ignoring his mail from them. They have said they are applying interest to the debt-even though the court papers said that wasn't granted- and they are now seeking an 'Order for sale'. Clearly, they are hoping that they have frightened me into 1) paying the debt myself (impossible anyway) or 2) me bending my ex's ear to make him pay it. I am currently recovering from 3 surgeries for bowel cancer and am in receipt of Income support and Carers allowance, and I have a child on the Autistic spectrum who I get HRC DLA for. He would react very badly to being moved from here. If it does go to court, would these 2 issues strengthen my case against being forced to sell? I have lived here 24 years, in fact 14 years before I met my ex. How I wish I had never made him joint owner!!! The debt is just over £7,000, by the way, and there is approx £100,000 equity in the home (probably more, but who knows, these days, without first getting it valued, and secondly, finding someone to buy it?).
I have posted on this site before about the mess my ex drops me in on a regular basis-he really is a peach!