Charging Order? The myth

eggbox

DAKOTA45 wrote: »

But can a freezing order be applied at the Interim CO stage and before the decision is made to finalise the CO?D45

There is nothing to stop a creditor applying for a freezing order at any stage of their attempted debt recovery. But the same rules still apply in that its expensive to apply for and, should a Court decide it shouldn't have been granted (which extremely likely at the ICO stage); then it carries the financial risk of compensation the creditor has to agree to before applying.

Never confuse what someone can do with what they will do. Otherwise, you just do their job for them and defeat yourself.

Wookiee501

DAKOTA45 wrote: »

Exactly… and I guess there must be a way where you could set up that kind of scenario for a small fee…

I was going to do it with my sister and rent my home back for a while… but she decided to do up her own house instead… doh!

A cash buyer is the only way, though... D45

You'd need to be cautious that you didn't trigger some sort of investigation for avoidance of tax - many of the transactions that go through Land Registry at significantly under market value are assumed to be for the avoidance of one tax or another, typically SDLT.

Choochybaby69

Just keep paying the mortgage until it's really low and then get a trusted relative or friend to do it with. Happy days! It's, who can you trust, when handing over a high value asset for peanuts, because legally it becomes there's

eggbox

Wookiee501 wrote: »

You'd need to be cautious that you didn't trigger some sort of investigation for avoidance of tax - many of the transactions that go through Land Registry at significantly under market value are assumed to be for the avoidance of one tax or another, typically SDLT.

That may be true where there is suspicion that an under market value has been paid with the additional "market value" amount being made up by other means by the buyer (such as the purchase of cars for the seller); but relatives selling at well below market value also reflects a significant amount of sales.

So providing you sell your property for the actual amount that exchanges hands, there is nothing illegal and there is nothing to answer to HMRC for, either.

eggbox

Choochybaby69 wrote: »

It's, who can you trust, when handing over a high value asset for peanuts, because legally it becomes there's

You can add that one to the list of why more people aren't doing it!

DAKOTA45

Oh for a wealthy family!
However, I wouldn't have been in this position had I been rich… I would have had access to legal advice. With a good lawyer I'd have won my case hands down… An unfair Trial and biased Judge who refused to adjourn when he should have done, left me with 4 years of (ongoing) litigation.
Where there's no level playing field in the courts, (an inequality of arms), there can never be true Justice.

D45

DAKOTA45

An ICO is the primary action a creditor takes to, supposedly, prevent the debtors property being sold when they are seeking to obtain a Full Charging Order. However, as hopefully LRR will confirm; an ICO can only be registered, on jointly owned/ sole debtor property, in the same manner as a Form K Restriction would be for a Full CO. It should, therefore, be treated in the same manner, and become overreached, should a sale occur for value of the property concerned?


Hmmm… but my husband and I were both (separately) served with the ICO, even though he is not the debtor and the mortgage is joint… D45

DAKOTA45

Choochybaby69 wrote: »

Just keep paying the mortgage until it's really low and then get a trusted relative or friend to do it with. Happy days! It's, who can you trust, when handing over a high value asset for peanuts, because legally it becomes there's

It's a good point… everyone is entitled to sell their assets for whatever price they like… or even 'gift' it as many wealthy people do with their properties...but it would definitely raise suspicions if you have debtors... and for sure, the tax man would be sniffing around…
Interesting, though...
D45

DAKOTA45

The other thing, which many people are not aware of is if the house is repossessed by the lender, the lender sells it and gives the equity back to you without paying the COs.
Desperate but if you're in that position, all is not as bad as it could be if the creditor gets an OFS.

D45

Land_Registry

eggbox wrote: »

An ICO is the primary action a creditor takes to, supposedly, prevent the debtors property being sold when they are seeking to obtain a Full Charging Order. However, as hopefully LRR will confirm; an ICO can only be registered, on jointly owned/ sole debtor property, in the same manner as a Form K Restriction would be for a Full CO. It should, therefore, be treated in the same manner, and become overreached, should a sale occur for value of the property concerned?


The reason I have always felt ICO's don't progress to a Full CO is because the time and cost of doing so doesn't really obtain the creditor any extra benefit? Especially as there seems to be no time limit on the Restriction notifying an ICO remaining on the property deeds?

With both an ICO and a Full CO, a Court has made an order giving the creditor the right to collect his debt owed from the debtor's asset from which it has been made against. It is, however, still the creditors responsibility to collect the debt not the Court's. Therefore, should a debtor decide not to pay the debt it is incumbent on the debtor to go back to Court to try and get the debtor to pay up. If the creditor decides not to do so; the Court (Law) doesn't do anything else towards recovery.

Although the process produces two separate orders, Interim and Full, there is, in reality, only one equitable charge (interest). From a form K perspective there is no differnece re the overreaching aspect applied be it an ICO or Full CO which has led to the form K being registered.

Practice Guide 76 and the two algorithms may be of interest to readers although they are written with the creditor in mind and how they might seek to protect the CO.

The charge takes effect conditionally when the interim charging order is made and then becomes unconditional on the making of the final Full charging order.

Our view is that it is probably unnecessary, therefore, to protect both charging orders as it is the same interest. But that is up to the creditor as they could, in theory, apply to register both and/or cancel the entry relevant to the interim and apply for a new one based on the full order.

In my experience that is very rare and it is only the ICO that is used to protect the interest on the register. I suspect this is for the reasons you already mention re time/cost as they share the view that there is no extra benefit from a registration perspective.