Charging Order? The myth

eggbox

Potemkin

The person who is pursuing the charging order must first have gained a County Court Judgement. So they will have sued you first, for a sum of money, in Court before being able to proceed to the charging order stage.

You should have, definitely, been made aware of this claim as you are afforded the opportunity to defend any claim against you by Law. So the first question has to be did you receive a Court claim off this person but chose to ignore it?

Judging from the contents of your post I think we can assume this is unlikely and you didn't receive the claim? So you need to establish why you wouldn't have received the claim? Have you, for instance, moved recently?

Unfortunately, even if a person hasn't received the claim against them; the Law still allows the claimant to receive Judgement, through default. This allows the claimant to pursue a charging order as a Judgement has been given that you owe the debt (even if you still no nothing about the claim - crazy isn't it?)

So your first job is to find out why you didn't receive any notification of the claim? If there is a valid reason why you didn't receive the claim; then you have grounds apply to the Court to "set aside" the Judgement and have the claim reset and enable you to defend the original claim.

Potemkin

Thank you eggbox for your reply. It appears the judgement was sent to an address where I was renting and because I moved, it was never forwarded to me.

However, I didn't WANT to defend the claim for these reasons. When you are an executor you cannot resign ... the only routes out are ill-health (and I couldn't have produced doctor's evidence of ill-health), removal by a court - and you can't instigate these proceedings yourself or .... death. I thought the last option was a tad extreme, so I had little choice but to wait for my vengeful, spiteful sister-in-law to take me to court and have me removed - the outcome I wanted as she is pure spite and poison.

So I was caught in her cross-hairs ... and she was - as ever - full of bile. I couldn't go forward or back or left or right or up or down. Everything I did she found a reason to send me a threatening letter from her solicitors, despite the fact that I had sent her every last penny of my brother's estate. Doing my duty to him - and keeping my promise to him as he lay on his death-bed has cost me dear.

Can a apply to the court to cancel the charging order, or make it into a standard restriction to I can sell my house and tell the evil witch 14 days later?

eggbox

Potemkin

Any Court decision that removes you as the executor of a will, in itself, won't be the reason you are now facing the prospect of receiving a charging order? It will because someone has, further, taken you to Court again and sued you to recover a sum of money they feel you owe them?

Apart from the Charging Order (which a Court will grant 99.9% of the time even if the debtor objects) the County Court Judgement you have will impact on your credit rating for the next 6 years? This could prevent you obtaining credit items and also the ability to rent property as Landlords often see a CCJ as a reason not to rent?

So I'd think long and hard about this as you do have a reason to set aside the CCJ as you didn't receive the Court summons? Whilst a claimant is only required to send their claim to your last known address to be valid; a Court will, almost, always set aside if you can verify you moved before the summons was sent to your previous address?

And there isn't the option of a charging order or a restriction being altered by the Court. If you own the property solely you will have the CO registered against your property as an equitable charge (like a mortgage). You will have to settle this in order to move in the future.

If you own the property jointly, however, the CO can't be registered as an equitable charge on the deeds but can be notified through a restriction on the deeds. Its this latter example that allows you the opportunity to move without paying the creditor at the point of moving.

So it boils down to whether you, genuinelly, owe the money claimed? If you don't then it would be wise to defend the claim.

Potemkin

Thanks once again eggbox - you expertise has obviously been gained through long experience.

Do I GENUINELY owe the money claimed? If I had taken out a loan and not repaid it - yes. If I had bought a car and not made any repayments - yes. But I did none of these nor any of the other 'normal' ways of getting into debt. I simply agreed to be my dying brother's executor. I was then faced with a vexatious snake bent on carrying on a 50-year vendetta from which I couldn't escape - I couldn't resign as an executor, nor could I take legal action to have myself removed. I could only die ... or wait for the snake to take me to court and remove me - which I did. The court awarded costs against me DESPITE me having done nothing wrong i.e. I transferred all of my brother's estate DOWN TO THE PENNY to the snake ... as quickly and efficiently as I could. But to no avail - she hated my dead brother and transferred that hate to me. Even if I had been Jesus himself, she would still have taken legal action against me as she was determined to find fault with anything and everything I did.

I intend to defend the claim. I loved my brother to pieces and he would be horrified as to how his vulture of a wife has behaved with his money. My house IS jointly owned and I will try and go for a restriction on the deeds and then try and get moved without paying the creditor at the point of moving.. I intend to give my entire share to my wife anyway so my next house will be owned by her (she is the opposite of the snake btw) As to the CCJ and how it affects my credit rating ... well I haven't needed credit for decades so that's not a problem. The snake has brought me to a nervous breakdown. Just to put it into context the vulture gained a £300,000 flat AND my brother's police pension(s) of £2,500 to £3,000 per month but she still isn't satisfied; she wants my scalp as well

One final question as I have taken up too much of your time already ... how familiar and how agreeable are solicitors to the restriction on the deed approach? Do I have to play 'Google lawyer' and advise them, or will they be aware of it?

Oh and one final, final question: even though my house is jointly owned, if I sell if for £300,000 but ask the solicitor to send me only £1 and my wife £299,999 can I escape that way?

eggbox

Potemkin wrote: »

My house IS jointly owned and I will try and go for a restriction on the deeds.....

You won't need to "go for" a restriction as that is all a creditor can place on the deeds if the house is jointly owned

Potemkin wrote: »

how familiar and how agreeable are solicitors to the restriction on the deed approach? Do I have to play 'Google lawyer' and advise them, or will they be aware of it?

The majority are clueless and treat a restriction like an equitable charge? Of the rest who do understand the difference, most won't act as you wish and insist on paying the creditor from the sale proceeds. But it HAS been done so don't give up searching as there are a few out there that will help.

Potemkin wrote: »

even though my house is jointly owned, if I sell if for £300,000 but ask the solicitor to send me only £1 and my wife £299,999 can I escape that way?

Legally, Once the CO is granted you and your partner cease to become joint owners (whereby both owners own the whole of the property) and you become tenants in common which the Law assumes as 50:50 ownership each. This happens because a sole debt can't be placed on a joint ownership.

Your share will then be deemed as whatever 50% of the equity realises LESS the value of the CO. Its only this net amount you will be able to transfer to your wife as the CO amount, by Law, will then no longer belong to you.

Potemkin

If I can't find a solicitor who both understands AND is willing to forward my wife the entire proceeds before sending the snake the certificate within 14 days (can anyone recommend one?) ... then I will do my own conveyancing and bypass that particular hurdle.

Make no mistake - I am *not* attempting to thwart the Law, I will follow it to the letter ... but if 'the letter' says "You must send a certificate to the creditor with 14 days of the sale" then I'll do just that. The CCJ will still be against me, and I will still 'owe' the snake £9,600 but I will have no assets to seize (cars etc.) or property (my next house will be in my wife's name) and nothing in the bank.

Let's see if the vindictive vendetta vulture can get blood out of a stone...

Once again eggbox ... you are 'the man')

eggbox

Potemkin

There is no mandatory 14 day notification with a standard Form K restriction that is usually applied to a debtors deeds notifying a charging order. Indeed, a standard Form K has no time limit imposed which is why its so useful to the debtor when they sell.

The creditor can, however, apply for a modified restriction which may state a 14 day time limit? So if a CO is granted you will need to check the wording on your deeds as this is what you will need to comply with.

Doing your own conveyancing will eliminate one hurdle, but it will be the buyers solicitor who will present the other hurdle as they will advise their client to insist the Restriction is removed prior to the sale proceeding. This will, certainly, be so if the buyer has a mortgage.

So be prepared for this but also be armed with the what the Law says regarding restrictions as they need not inhibit sellers who wish to move without settling the underlying CO at the point of sale.

This is not a matter of trying to thwart the Law, it's a matter of using the Law to your own advantage as the creditor has tried to do in attaching their debt to one of your assets.

Potemkin

Thank you once again eggbox. If I may then summarise my position regarding what you said above:

If the standard restriction comes as 'unlimited' i.e. I could choose to notify the snake in 10 or 15 or 20 or 200 days, and the most a modified restriction can be applied is 14 days, then the worst scenario I have to contend with is possibly a 14-day restriction, which I feel in my bones they will go for. I must take care that they do not try for a 'modified restriction' which requires me to notify them BEFORE the sale is completed.

If I do my own conveyancing then that seller hurdle is overcome ... but if I sell to someone I know (possibly a family member who doesn't already own property) who also does their own conveyancing (!!) then that buyer hurdle may also be overcome. Otherwise I need to look for a cash buyer who is prepared to accept a discount in return for accepting the restriction knowing a certificate can be issued to confirm their registration once monies have been transferred (to my wife). You see, my grievance isn't about money per se, its about not refusing to help a dying man whom I knew and loved for 70 years.

You are right - I am trying to use the Law to my own advantage; correct me if I am wrong but the Law cannot dictate to whom I sell, and the Law cannot dictate the price, and the Law cannot stop the sale process itself (otherwise no creditor would ever get paid), so there has to be a gap ... and that gap is - as I understand it - the 14-day 'worst case' notification period. As you rightly point out 'restrictions need not inhibit sellers who wish to move without settling the underlying CO at the point of sale'. Its just a question of slogging away on Google trying to find the 'right people' to help you use the Law to your own advantage.

Yes - I am wriggling - but the snake forced me to learn ...

eggbox

Potemkin

Firstly, its not you that notifies the creditor its the buyer. This is, specifically, stated in a standard form K restriction so the instruction has to be followed.

If a Restriction is modified it would be whatever timeframe the Court agreed to? But, due to most solicitors not understanding the difference on how CO's are registered on joint and solely owned property; modified restrictions are rare. So I would doubt your creditor's solicitor would apply for a modified restriction as they are, probably, unaware that they can or, more importantly, that they might need to do so?

So, as long as you don't let the cat out of the bag or create a scenario whereby they feel they need more protection for their CO; you will only get a Form K restriction registered.

The scenario you set out for selling is on the right track but a couple of things to consider. Certainly selling to someone you know who is happy to purchase under the conditions you need is fine. The same goes for a cash buyer, however, the cash buyer will need to understand the restriction will only fall away from the deeds AFTER a sale has been completed (through being overreached?)

So, whilst a discount may help, letting the buyer retain an amount equivalent to the CO value until the deeds have been updated; is usually a better option to keep them onboard as they have nothing to lose by doing this?

The Law cannot dictate to whom you sell to or for what value you sell for. But a creditor can apply to the Court for a freezing order, to stop a seller disposing of their assett, if it feels it isn't going to get paid.

The reason creditors (in this situation) don't apply for them, however, is due to the high cost of obtaining a freezing order and the high volume of work involved. There is also no guarantee a Court will grant a FO just because an application is made for one? The applicant is also liable for the "reasonable" costs of third parties incurred by the FO. So its extremely unlikely a FO would be sought for a sum under £10k (hence, the reason you won't find any instances on a Google search?)

Potemkin

eggbox - I don't know what I would do without you!

Yes of course - I became muddled - it is the buyer who sends the notice to the snake and not myself the seller. Your point about agreeing with them to retain £9,600 in case things 'go wrong' is brilliant.

As regards the modified restriction, I most certainly will not let the cat out of the bag. Snakes eat cats!

There is no reason (that I can see) for snake to suspect she isn't going to get paid, so I am pretty sure a freezing order wouldn't be applied for and even if it were - my house is in joint names so my poor wife would be 'frozen' out as well.

God bless you eggbox you give me hope. All I need to do now is find Eggbox & Co Solicitors!!