Charging Order? The myth

eggbox

MarjhB
The first thing to understand is that your parents ceased to be joint owners once the first Charging Order was granted. They would then be classed as tenants in common which means they both owned a 50% share of the property each, individually. So your Father's share wouldn't, legally, automatically pass to your Mother unless your Father left his share to your Mother in a will (which, hopefully, he did do?) The second thing to understand is that no matter how big the debts are, they can only be settled, legally, from the proceeds of your Father's share. The creditor cannot claim anything against your Mother's share.

So, with that out of the way; the first thing you need to find out is what the debts were for? If, as I suspect, they were for loans or credit card debts your Father got into trouble with; then these are debts regulated by the Consumer Credit Agreement (CCA). As such, no statutory interest can be added to the debts when a Charging Order is granted. This means that, whatever amount the Charging Orders were for, then they won't have increased over the period of time since the Charging Orders were granted. But its important to check as, if they were for non CCA regulated debts (eg; loans from friends or for bills not paid) then they will, most likely, have had statutory interest added at around 8% per annum and which will have accrued  the debt, substantially, over the time since the Charging Orders were granted.

If we assume, however, they are CCA regulated debts, then the question is why you are trying to get figures on what's owed? If its because your Mother is looking to sell then that's fine. However, if your Mother isn't looking to sell then the best thing she can do is to leave sleeping dogs to lie. This is because they won't have any effect on her residing in the property and, over time, the debts will lessen by way of inflation. What I mean by that is if your Mother is looking to sell now and, say, her property is worth £200k but the debts total £30k, then the difference is £170k. But if she looks to sell in 5 years time the property will most likely be nearer £250k but the debts will still be £30k; meaning there is £220k clear.

A debtor, technically, has the power to try and enforce a sale of the property to recover the debt; however, this tactic is extremely unlikely as (i) there is caselaw protecting your Mother as its her main residence (ii) Courts are unlikely to grant an an Order For Sale on consumer credit debt (which is why there is less than 0.05% of Orders For Sale on these types of debt (iii) most creditors are happy to wait until the property is sold to receive the debt owed under a Charging Order. If you've read the latter parts of this thread you will also understand creditors are even forgetting they have these debts and, in some cases, are even denying a debt is owed causing settlement figures to be difficult to come by. So they're not priority debts in most creditor instances (which will be borne out by the lack of contact you've had from creditors since your Father passed?)

Finally, you may understand this thread is explaining that it is possible (with the right conveyancing help) to sell the property without settling the debt at the point of sale. Which may be an option if the debts are large? 

MarjhB

Thank you Eggbox for the reply.  These 3 restrictions date back to 2009 and 2010 and we have no clue how much they are for.  Long gone off his credit report.  My Mum ideally was thinking about selling to be nearer to me.  She is making herself very ill that she will be left with no equity in the house.   (She has scenarios in her head where she might end up on our couch with nothing).   Might get an estate agent round to value the house.   We know ball park what equity she might have regardless of what needs to be settled.  I am thinking if house is worth £250k  no more than 125k can be used against his debts.

MarjhB

I should also add he foolishly he left no will so more legal complications.  

eggbox

MarjhB
Firstlly, yes if the property is £250k then £125k is untouchable. But tell your Mom not to worry as this looks worse than it is and she has options. For instance, its been known if you write to some creditors and explain the debtor is deceased then they reliquish the debt. She can always try to offer a lower settlement, too?

But I would try to discover who owns the debts first which you can do by going to the Land Registry site and download a copy of your Mom's deeds if you haven't got a copy (costs about £3)

MarjhB

Eggbox
I have done the land registry and identified who the 3 are but I appreciate the tip.  RBOS, M&S and a 3rd company that obv bought the debt from someone else.   Knowing about the debt my Mum cant face staying in the house, she wants to sell up.   I think all 3 have copies of death certificate with a simple cover note stating he was now deceased and nothing more.  I have warned her she might not even et a reply.  Good to know that I can at least try reassure her that they cant touch her 'half'  of the equity in the house.

eggbox

Yes it is good to reassure her about here share, however, you need to explain to her that she is going to run into difficulties selling her home in the "traditional" way if creditors aren't responding to her letters. This is because using the tradional route, whereby creditors are paid from the proceeds of the sale when the property is sold, will stall. This is because most soliciotors won't proceed with the sale unless the creditor is repaid and the Land Registry won't remove the Restrictions unless it can be proven they are no longer valid. Therefore, I would start investigating the method this thread explains for selling a property that has Form K restrictions registered.

MarjhB

That all sounds very heavy reading but I know that we must find a conveyancer that can deal with these during a sale.  Some posts on this forum warn of many who wont touch a sale half way through a process when they find restrictions.   We have only known about them for a few weeks so hoping to get some info from these companies.  If they want the debt repaying they need to let us sell to be able to do that.

Adrian52

Would really love some help I have had a charging order on my property since 2007 I think I have been caught up in some bad practice from back in the day the property I had was back in 87/88 I walked away from a bad relationship leaving him in the house it then got repossed in 89 and then resold in March 92 I was the contacted by the then mortgage company end of 2004/2005 I responded to the letters and after some mail back and forth in July 05 agreed a charge being added on my property for almost 18.000 pounds with an agreement to pay 20 per month  the company never gave bank details I have letters asking so they  then took the case further after trying to sort the case myself with my now husband we ended up in court and because we could not afford a solicitor or knew where to get help they then added the whole amount of 64.000 pounds I then still had to chase for payment details the company have long since folded and my 20 pound a month payment gose to a holding account I have never received any contact from the said company since that slapped the charge on my house which they had me over a barrel as the voluntary charge paperwork had been signed in 05 and the final charge added was the end of 07 over two years later can anyone please help I want to move home with my family but stand to lose 60.000 pounds
Many thanks 

eggbox

Adrian52
Is this a legal charge of a charging order? If you have a copy of your deeds it should tell you? (you can down load from the Land Registry site for £3

Dilim

I'm stuck in a no-man’s land nightmare. Any help with any aspect would be appreciated.

 

Background:

 Former partner left UK in 2009 and I found out about CCJs in 2011 and 2013 respectively when restrictions were applied for & entered on register– there had been a lot of mail (that was being returned to sender) so while stressed & upset, deep down not so surprised.

 

Condensed chronology:   protracted international divorce & child custody proceedings 2011-2016 & final order 2016; District Judge signing TR1form on behalf of non-compliant ex 2018; attempt to remortgage that stalled due to insufficient funds to clear restrictions 2019; furlough and change in circumstances – leading to current decision to focus on the transfer of equity first.

 

Fast forward today:

 I have submitted application to Land Registry to transfer equity (permission from lender obtained + signed TR1form + Notice to Creditors). But because the final order has a (subject to mortgage and charges) caveat, it is expected that the charges (Form K restrictions) will be resolved to the creditors’ satisfaction so they agree to remove/ withdraw objection to cancellation.

 

So have been given a deadline by Land Registry to resolve matters with the two objectors* (Arrow Global & ME111)) else it goes to tribunal.

( *was a little puzzled as to how my TR1form application =Application to cancel restriction too but not to digress)

 

While being resigned to negotiating a settlement with the creditors. I am anxious for them to agree to a compromise.  So, reaching out for any advice on how to approach them because the total involved is unaffordable.

 

These are the bits and pieces I have to hand:

 1.    The debts are not in my name – but maybe they won’t care.

2.    While they may have the right to apply for a unilateral charge** – the same final order also explicitly states the house should be kept for the children of the marriage (disabled first son), so they would not be able to force a sale - right?.

3.    They would have to go to some trouble to get the unilateral charge – is that worth some give on their part?

4.    In all of this I also don’t have any of the paperwork pertaining to the original debt or CCJ/ charging order– could I request it from them; would it be of value in the negotiations?

 

(**I had been advised that if the transfer goes ahead without the charge holders agreeing to the cancellation they will have the right to apply to the court for a unilateral charge to go on the property.)

 

To be honest this is another aspect I don't understand – how does it fit in with the Land Registry tribunal process? Is it something decided at Tribunal if so would it result in costs against me?

Otherwise what would that process involve?

 If I was not able to come to an agreement with the creditors (but efforts have been made to do so) how would that play out at tribunal? Again do I risk incurring costs?