Charging Order? The myth

jpirate

I have also read putting a house in a posession of trust rather than being joint tenants does make it even harder for creditors (or would be creditors as it cannot be done to avoid debt) and safeguards a property even more?

Not sure if this is within this threads limits or if it need its own one?

eggbox

jpirate wrote: »

Long time lurker! Interesting thread and I think I understand that if a house is owned jointly as joint tenants as opposed to tenants in common the charging order is a restriction not a charging order as such, so it means that as a restriction the only obligation is to notify the creditor of a sale and NOT to pay them anything.

However, from what I have read, as soon as creditor applies for a charging order on a joint tenants house the ownership then changes to tenants in common so why doesnt that make the charging order a usual one rather than a restriction?

It is still a Charging Order it's only how the CO can be registered against the property deeds that is what differs? If the CO is made against a sole owner it can be registered as a Notice on the deeds and has to be dealt with before a sale can proceed.

If, however, the property is jointly owned, either as joint tenants or as tenants in common; then only a Restriction can be placed on the deeds notifying that a CO exists against one of the owners. As this thread is highlighting; a standard restriction only requires compliance of such to allow the transfer of the property ownership to proceed. Non payment of the CO wouldn't prevent the transfer proceeding.

You are right, however, stating that a CO severs the joint ownership and the owners then become TIC. This is because a CO can't be made against a joint owership hence the split of ownership that is required.

jpirate

Thank you eggbox.... So even if the house was purchased as Tenants in common to start with, you only need to sell and inform creditor as the original OP stated?

In other words it doesn't matter whether you are joint tenants or tenants in common as long as it isn't just in sole ownership.

If you do sell how does tenants in common affect what each person would be entitled to, and does it make any difference if you don't stay together?

I am thinking joint tenants would usually be entitled to 50/50? Or is that wrong Eggbox?

Wookiee501

jpirate wrote: »

Thank you eggbox.... So even if the house was purchased as Tenants in common to start with, you only need to sell and inform creditor as the original OP stated?

In other words it doesn't matter whether you are joint tenants or tenants in common as long as it isn't just in sole ownership.

That's right, effectively.

jpirate wrote: »

If you do sell how does tenants in common affect what each person would be entitled to, and does it make any difference if you don't stay together?

I am thinking joint tenants would usually be entitled to 50/50? Or is that wrong Eggbox?

Usually if you hold a property as tenants in common, you'll have defined what the individual shares are, either in a trust deed somewhere or possibly within the provisions of the deed transferring ownership itself. There's probably a legal assumption that if you own as joint tenants then it's 50/50 ownership, but the main effect of owning a property as joint tenants is that if one of the joint tenants dies, the entirety of the legal ownership vests in the survivor(s). If the same thing happens in a tenancy in common, the trust created has to be dealt with in order to transfer ownership to a third party.

jpirate

Thanks Wookie

Here's another (dumb) question.... If a creditor is chasing you for payment on part of a contract and eventually places a charging order on the house, is it for the sum owed or for what the sum could be over the full term of the contract.

For example if you have a five year contract with a company but you pay the first two years but cannot pay for the third year, is the charging order for just that years amount missed or for what the total will be over the rest of the remaining 3 years, even though you have technically missed one payment (but likely to miss all the rest of the next 3)?

Sorry if this is in wrong section but I am new to all this.

eggbox

jpirate wrote: »

Thanks Wookie

Here's another (dumb) question.... If a creditor is chasing you for payment on part of a contract and eventually places a charging order on the house, is it for the sum owed or for what the sum could be over the full term of the contract.

For example if you have a five year contract with a company but you pay the first two years but cannot pay for the third year, is the charging order for just that years amount missed or for what the total will be over the rest of the remaining 3 years, even though you have technically missed one payment (but likely to miss all the rest of the next 3)?

The first step would be the creditor suing you (after defaulting) for what it believes you have agreed to under the terms of the contract? It would then have to convince a Judge it is owed the amount they are claiming for?

If the creditor is succesful and obtains a CCJ against you, whether that is for the whole amount claimed or what the Judge believes the creditor is entitled to under the terms of the contract; then the Judgement would state how much you would owe the creditor?

This would be the only amount the creditor could pursue a CO for against you. The only thing that could vary that amount is if the creditor obtained interest to be added to the Judgement (which is normally 8% but shouldn't be allowed against loans regulated under the CCA1974 (Consumer Credit Act)

jpirate

So... Just to make sure I have it right, it could be for either amount. Sorry for being dim but just need to get it right.

The amount owing and not paid. Or

The amount owing plus what will be owed on the rest of the contract.

It would depend on what the company claims for and what the judge agrees?

eggbox

jpirate wrote: »

It would depend on what the company claims for and what the judge agrees?

This bit

But what the company claims for will usually be based on what's written in the contract regarding a default occuring.

jpirate

Another thing that I'm wondering is if you do get a CO against a jointly owned house and you do sell and inform the creditor as required and you manage not to pay them any of the proceeds, will they not just know you have that amount of money and apply for an order of information or another one anyway?

jpirate

Another thing that I'm wondering is if you do get a CO against a jointly owned house and you do sell and inform the creditor as required and you manage not to pay them any of the proceeds, will they not just know you have that amount of money and apply for an order of information or another one anyway?

Or could you draw the money out in cash amounts to use as you like before they do that or take any other action?

I assume you wouldn't be able to downsize and purchase another house as they just do another charging order???