Charging Order? The myth

mazzabazza

Thanks so much for your thoughtful reply Eggbox. Much appreciated.

These are the words of the modified restrictions. There are other standard worded restrictions relating to these two creditors, but these, I believe, are the ones of most hassle.

RESTRICTION: No disposition of the registered estate is to to be completed by registration without a certificate signed by or on [CREDITOR 1] or its solicitors that written notice of the disposition was given to the said Creditor c/o [Solicitor and address] at least 14 days prior to the disposition (the said [CREDITOR 1] being the person with the benefit of a final charging order on the beneficial interest of [DAD] made by the country court money claims centre on X X 2018 under claim number XXXXXX) or without a further order of the court which ordered this restriction.

RESTRICTION: No disposition of the registered estate by the proprietor of the registered estate other than a disposition by the proprietor of any registered charge registered before the entry of this restriction, is to be registered without a written consent signed by [CREDITOR 2] and [CREDITOR 2 VARIANT COMPANY NAME] both of [CREDITOR 2 ADDRESS], being the person with the benefit of a final charging order on the beneficial interest of [DAD] made by the County Court Money Claims Centre on X X 2018 (Court Reference XXXXXXXX).

I'll request my Dad get's onto those creditors as suggested and see what they're willing to do. Any thoughts on these particular restrictions as to what options are?

If my mum and dad wanted, could they just give back the house to the bank and get an agreement with them that the mortgage is considered over and done with. It's valued at much higher than what is owed on the mortgage, or do you think that this is also made my complicated by the restrictions?

Potemkin

As you may remember my vicious ingrate of an ex-sister-in-law has - at the moment - got an interim charging order on my house which is due to be made 'Final' on 29th April

My plan is to let it be made final as - from what I have read - these are 'rubber stamped' by our beloved judiciary on the nod and impossible to appeal. If that is the case and it does become final can my ingrate ex-sister-in-law petition to make me bankrupt and thereby FORCE the sale of my house ... or is the Restriction the last thing she can do to make my life miserable?

(Instead of putting £5,000 in my beloved grand-children's pension pots I have been forced to spend this money on a solicitor to get the final charging order hearing put off until 29th such is the poisonous spin-off I am forced to endure)

eggbox

mazzabazza

Those Restrictions are more tricky as the creditor can withhold certifying that notification has been received, to the Land Registry, until they have received there money?

However, to answer your other question, yes, your parents can certainly do a "voluntary" repossession by handing back the keys to the Mortgage company if they so wish. There is a downside in that there credit rating would suffer, however, if that isn't a consideration then the action (given your Mother's condition) should mainly be positive.

Repossesion gives the first charge holder (the mortgage lender) "power of sale". This means they are able to sell your property and recover all their costs without consideration to any other creditors on the property deeds (with the exception of trying to obtain the best posssible sale price for the property.)

So if the property value is substantially more than the mortgage value, then the mortgage lender will clear their debt and their will be a surplus remaining from the sale proceeds the lender managed to obtain. Whatever surplus is left will belong 50% to your Mother and 50% to your Father. This is because they will now be Tenants in Common due to the Charging Orders granted.

Now, there is a bit of confusion over the next bit (which Land Registry Rep may help to clarify if he's looking in) so I'll take the worst scenario first. The remaining creditors that had a claim on the property would be paid, by date of registration order, from the remaining proceeds of your Father's amount only. Your Mother's share would be repaid to her.

The best scenario is that your Father would have his remaining proceeds returned to him, too, and there is some evidence available that this is what happens. But at worst your Mother would get the balance of her share returned.

Any creditor not paid (or only part paid) would still be entitled to pursue the balance from your Father; however, its extremely unlikely any creditor would as there would no longer be any fixed asset to pursue?

eggbox

Potemkin wrote: »

If that is the case and it does become final can my ingrate ex-sister-in-law petition to make me bankrupt and thereby FORCE the sale of my house ... or is the Restriction the last thing she can do to make my life miserable?

Anyone can be petitioned for Bankruptcy if they owe £5,000 or more as soon as a judgement has been made that money is owed or they have issued a Statutory Demand. So the simple answer is yes she can if she so wishes to try?

However, it's unlikely a creditor would pursue bankruptcy if they had decided to go down the charging order route first?

Land_Registry

eggbox wrote: »

Now, there is a bit of confusion over the next bit (which Land Registry Rep may help to clarify if he's looking in) so I'll take the worst scenario first. The remaining creditors that had a claim on the property would be paid, by date of registration order, from the remaining proceeds of your Father's amount only. Your Mother's share would be repaid to her.

The best scenario is that your Father would have his remaining proceeds returned to him, too, and there is some evidence available that this is what happens. But at worst your Mother would get the balance of her share returned.

Any creditor not paid (or only part paid) would still be entitled to pursue the balance from your Father; however, its extremely unlikely any creditor would as there would no longer be any fixed asset to pursue?

From a registration perspective we do not deal with how the proceeds of sale are then dealt with. So we would not be able to clarify the finer details.

As I understand it any second secured lender, so a second mortgage, would also be paid. Their registered charge would be removed from the register as it's dated after the first charge and therefore overridden by the power of sale. Any remaining monies are then returned to the owners/borrowers.

How the creditor cake is then sliced would not involve us either as whilst any later interests such as form A and K restrictions are also overridden and removed (form K if it is later than the first charge also) we have no involvement in who has to pay whom etc etc

Potemkin

Thank you again eggbox

So - to be absolutely clear - the Restriction DOESN'T preclude her forcing bankruptcy - the vulture can do BOTH is she wants? I think (thus far) she has gone for restriction as its cheaper than bankruptcy ... but that's only a guess

eggbox

Potemkin wrote: »

So - to be absolutely clear - the Restriction DOESN'T preclude her forcing bankruptcy - the vulture can do BOTH is she wants?

Yes she can

Potemkin wrote: »

I think (thus far) she has gone for restriction as its cheaper than bankruptcy ... but that's only a guess

Bankrupting someone can involve a lot more work and can get messy. Therefore, placing a CO on the debtors home is seen as far easier and (normally) satifies people they have security for the debt. Especially, when the creditor isn't desperate for the money?

tricialash

My husband as a restricton on our home from a loan he obtained but didnt keep up to when he lost his job . This was around 8years ago he cant remember much about the details it was a dark time in his life. We think the amount is just 3k.
Can anyone help please what address do we contact in order to get a copy of the deeds. Ive tried looking online but get bogged down with all the different companys we can apply to. I understand we after pay for this service and after reading many posts on herei understand because the loan was in my hubbys name and not joint its a restriction order and not a charging order. Any links or addresses to the correct land registry would be very helpful thankyou.

Land_Registry

tricialash wrote: »

My husband as a restricton on our home from a loan he obtained but didnt keep up to when he lost his job . This was around 8years ago he cant remember much about the details it was a dark time in his life. We think the amount is just 3k.
Can anyone help please what address do we contact in order to get a copy of the deeds. Ive tried looking online but get bogged down with all the different companys we can apply to. I understand we after pay for this service and after reading many posts on herei understand because the loan was in my hubbys name and not joint its a restriction order and not a charging order. Any links or addresses to the correct land registry would be very helpful thankyou.

You can use the official site and search for, view, download and save a copy of the register for £3

The register will confirm how any CO is registered and who the creditor is. It won't tell you the amount now owed. That would presumably come from contact with the creditor but I'd suggest posting a bit mire about what you are trying to achieve re the CO and see what eggbox advises

eggbox

tricialash

As LRR advises if you click the "official site" link he has posted you can get a copy of your deeds register there. As he also advises if you can let us know your objective for wanting to get a copy of your deeds it will help us help you better?

And to clarify; your husband does have a charging order granted against him for the debt concerned which has been attached to his "beneficial interest" (which is his share of any equity in the property.)

However, there will only be a restriction (notifying that the CO exists) registered on the deeds if the property is jointly owned but only one of you is responsible for the debt.