Charging Order? The myth

mintminty59

I have the claim number , and my local court confirmed the amount , however the creditor on the actual register is no longer the owner of the debt as it has changed hands a few times since then. And I am assuming each time it has someone has added to the balance I claim I owe them. But the register has never been updated since. Its all confusing I know

sortingit1

So im currently mid divorce and its come to fruition my soon to be ex and I have several restriction interim orders ( type k I think looking at the wording) in both of our names over a number of years.

Looking forward, there is approx £35k of debts and £35 k of equity in the house.

So yes we could and probably clear the debt but houses are not selling too well at the moment in the area and the ex seems keen to drag it out.

If it was transferred in to mine or my exs sole name as part of the divorce agreement , I understand that the charges (restrictions )stay with the deeds and the property , but if the house is then in one persons name instead of two, could the restrictions then be made final and the house forced to be sold anyway by one or more of the credit companies?

Any advice appreciated.

eggbox

mintminty59 wrote: »

I have the claim number , and my local court confirmed the amount , however the creditor on the actual register is no longer the owner of the debt as it has changed hands a few times since then. And I am assuming each time it has someone has added to the balance I claim I owe them. But the register has never been updated since. Its all confusing I know

Anyone aquiring the debt can try to add "collection" charges, however, that cannot, legally, be added to the Charging Order amount unless included in the Order granted? The amount the Court has granted the Charging Order for is what you, legally, have to pay to discharge the order. Any other charges the creditor tries to claim should not restrict that happening.

But understand DCA's don't care very much about what's legal or correct. If they can get away adding spurious charges they will.

eggbox

sortingit1 wrote: »

So im currently mid divorce and its come to fruition my soon to be ex and I have several restriction interim orders ( type k I think looking at the wording) in both of our names over a number of years.

Looking forward, there is approx £35k of debts and £35 k of equity in the house.

So yes we could and probably clear the debt but houses are not selling too well at the moment in the area and the ex seems keen to drag it out.

If it was transferred in to mine or my exs sole name as part of the divorce agreement , I understand that the charges (restrictions )stay with the deeds and the property , but if the house is then in one persons name instead of two, could the restrictions then be made final and the house forced to be sold anyway by one or more of the credit companies?

Any advice appreciated.

Technically, as a sole owner you become more vulnerable to creditors wanting to apply for an Order for Sale. In practice it wouldn't make any difference as the decision to grant an OFS is at the total discretion of the Judge on the day.

As the property is your main residence a Judge won't grant an OFS unless the cisrcumstances are extreme. If the debts are for loans or credit card debt that won't be seen as extreme?

The creditor, too, if they are a bank or DCA is unlikely to have any interest in pursuing an OFS as they know the extreme difficulty in obtaining them?

sortingit1

Thanks eggbox.

One more question , if we were to sell the equity in the property Wd be divided in half in theory.

Now I believe the orders should be paid off in date order of who registered first . There are several "restrictions interims on there. - however there greater value of them in my exs name and most of them pre date mine.

So the question is if we sell do they get paid off in order, hence my ex being debt free and I will have remaining debt or can I pay off mine with my part of my equity . Thanks in antipation again. Just trying to get my heard around it all.

eggbox

Sortingit1

Unless there is anything to the contrary placed on the deeds then your equity will be split as you say. And, whilst you are also correct that the debts take priority by date order; the debts can only be paid from the equity of the debtor concerned.

So each person's debts will be paid from each person's individual share of the equity in date order of registration on the deeds. So, for example, if your parter had the first registered debt for, say, £20k but only has £15k of equity; then £15k is all that creditor will receive and non of his other debts will be paid anything? The same applies to your debts.

So each person only pays off their OWN debts, in order of the registration date, from their OWN share of the equity.

Remember, too, that the debts won't disappear as they will still have the CCJ in force. But it's 99.99% certain they will be classed as uncollectible by the DCA concerned and will be , either, written off or passed to an even lower end DCA who has no chance of recovery unless you are daft enough to pay them.

Rangers123

Land_Registry wrote: »

eggbox it's an understanding of the law and what view you have as to how that law works.
It's not a rule in my view that's being applied here in the context of this thread.

And as you will appreciate the law itself can be subjective so you can get differing views, that's why you then have a judge as the arbiter.

For example the issue of overreaching is our interpretation of the law hence 'A charging order affecting only the beneficial interests under a trust is liable to be overreached along with those interests by the operation of sections 2 and 27 of the Law of Property Act 1925' - so our interpretation of the LPA 1925

And whilst I am not suggesting this is the case re the legal advice being given by the solicitor's referred to in the the thread a different view of the law may be taken. That may for example be a view that focuses on the Charging Orders Act and/or any legislation dealing with such debts and how they are satisfied and when.

I suspect the real difficulty for some solicitors is how COs are dealt with differently and how those differences impact on jointly and solely owned properties. But it still comes back to the impact of the CO itself and how the law enables the creditor to realise the debt or the debtor to manage it where they own a property.

The only way you will change a solicitor's view, in my opinion, is by challenging their interpretation of the law and convincing them to accept your interpretation - that's not a rule to be enforced but a matter of discussion/education and encouragement all of which this thread can help with, complaints to solicitor's and their firms when poster's views differ, and the SRA thereafter as appropriate.

Land Registry I am stuck. Nobody seems to know how we can transfer this title and my solicitor is now trying to have the restriction removed. There are 3 other owners and this is affecting the sale, and disadvantages them unfairly. Title number is DN82412. Even the Treasury Solicitor is not coming back to me with a solution. Any light you can shed would be appreciated.

eggbox

Rangers123 wrote: »

my solicitor is now trying to have the restriction removed

Hi Rangers123, how is your Solicitor attempting to remove the Restrictions?

Land_Registry

Rangers123 wrote: »

Land Registry I am stuck. Nobody seems to know how we can transfer this title and my solicitor is now trying to have the restriction removed. Title number is DN82412

I'll take a look and see what the issue(s) are and post a comment once I have those details

Rangers123

eggbox wrote: »

Hi Rangers123, how is your Solicitor attempting to remove the Restrictions?

The Land Registry has told her the restriction would not be removed by transferring the title in this case because the company with the benefit of the restriction is dissolved. I don’t understand why, as the restriction is still the same, to give notice. Now locked in a whole nightmare with the Treasury Solicitor, with the added bonus of doing all the work for them, for which they’ll generously charge me their legal fees to have this removed we we can proceed. Eggbox, this is the solicitor we’ve discussed so they know what they’re doing in relation to these matters.

I’m genuinely tempted to apply to have the original charging order set aside, flying back to the UK and turning up in court in person. Such a frustrating situation, even more so for the other owners who are being prevented from selling their house.