Charging Order? The myth

eggbox

Hi Evs_1955 
It would probably depend if you have offered any further repayment? An offer of £1100 only for a £10k debt almost certainly wouldn't help. However, £1100 down with a reasonable monthly offer of, say, £100 might sway the Judge to delay the order? 

Evs_1955

Yes, I’ve made it clear in my letter of objection that I can make an initial payment of £1,100 and resume my monthly direct debit, but I was only paying £50 a month. £100 would be stretching it at the moment given the circumstances. Thanks again ! 

eggbox

The norm is for Judges to grant CO's for the reason they understand Judges have the final say on granting OFS which, as I said, they rarely do. So its kind of a double edged sword. But I think you may have a slightly better case if you can provide all the evidence for the Judge to see and you come across as someone who genuinelly wants to repay the debt. Asking for the order to be suspended unless you default on the monthly payments may also sway the Judge?

But its still a long shot for the above reason so don't get frustrated if you fail? And if the Judge fails to give you any help remember you are also under no obligation to repay anything until you sell the house if you fail; so if the £1100 can be put to better use then the creditor can go whistle.

Some of the more unscrupulous DCA's come on strong after a CO is granted threatening to go for an OFS if you don't offer repayment. Don't panic if this happens as its just a bluff so just offer something like £10 a month explaining that's all you can currently afford until your circumsances change. 

 

Evs_1955

Hi Eggbox, you have been more than helpful , thank you so much . I think I’ll pay the total of direct debits I’ve missed before hand and see what happens at the hearing. I’ll make sure I’m armed with evidence of what I can afford and try to hold it together while presenting my case. Your advice has boosted my confidence and has honestly made a big difference, knowledge is power ! 

The irony in all this is that prior to the original debt my business was thriving . Then the banking crisis hit ( and as we all know Lloyd’s benefited from a massive taxpayer bail out) the following recession resulted in a down turn in trade for my shop and my partner being laid off. I relied on my credit card for some day to day expenses and charges mounted up .
Although he went on to get a new job, which he still has , I never recovered from the debt enough to settle it. That has cast a shadow over things ever since .
It seems that bailouts sadly only apply to big business. 

I had no idea until now that a charge could be put on my home, naive I know. So thank you so much again, I’ll let you know how I get on 🙏

eggbox

Hi, I always say to posters this is your problem and you, therefore, have to do what you feel is best as it's you that will suffer the consequences of what's decided. However, if it was me I wouldn't pay anything before the hearing. What I would do instead is make an offer to the creditor to withdraw the CO application and, in return, you will make the offer of repayment as you've advised here. 

The reason for this is four fold; firstly, if you do make a payment then creditor will still proceed to the CO hearing as they are ruthless *****. You've, therefore, lost your bargaining chip as it already has your money and its odds on they will get the Final Charging order, too, so they have no need to negotiate with you.

The second reason is, by offering the payment in return for dropping the hearing you may (a) get a result off the creditor to drop the hearing and (b) you will have some ammunition in Court (if the creditor declines) to prove the creditor is not helping the situation by refusing your, genuine, attempt to repay the debt.

The third reason is that an up front payment also makes it easier for a Judge to grant the CO as you've already paid the money. However, if you are offering a payment in return for the Judge declining to grant the CO; then it gives the Judge a  reason to decline the order as that helps the creditor get their money?

The Fourth reason is that by retaining the money you, either, get the CO hearing dropped or you get to keep the money in your pocket (which given your circumstances you could probaly put to better use?)

Once a creditor has gone for a CO they, pretty much, have accepted you aren't going to repay anything else until the house is sold. As dozens of poster on here will confirm, many have had CO's on their property for donkeys years and the creditor rarely attempts to enforce the debt by any other means (after the intial attempt I explained in the last message.) Indeed, many joint owners on here who have been succesful in selling their property without paying the creditor anything upon sale; have reported the creditor often doesn't even follow up to try and collect the debt when being notified the property is being sold? 

 As your loan was CCA 1974 regulated, the creditor is also unable to add interest to the debt. So the debt amount will actually reduce in value as the years pass as your house increases in value due to inflation. So whilst a CO looks like the creditor is putting an awful lot of pressure on you to repay the debt; they're actually reducing their effectiveness to get the debt repaid?

However, as I said; what you do has to be your decison and what you're comfortable with.

Marblesue

Years ago I went through a similar situation. Debt purchaser took me to court for a cca debt which they acquired third hand from another debt purchaser. I could not stop the charging order despite having strong arguments and reasons. The judge just rubber stamped it. Over the years the debt purchaser threatened me with OFS, Warrant of Control and bailiffs. In the end the years rolled by and I just gave up trying to communicate with them out of exasperation. Recently out of the blue I received an offer to settle the debt of £7000 plus (which included their 'costs') for £671!! Why that figure I don't know but it just goes to show just what they're like and will bleed you dry if you let them. 

Evs_1955

Thanks Marblesue, I guess if you’ve got nerves of steel it pays to wait it out ! 

If it was just myself involved I’d do the same, just that my current situation is a nightmare and I don’t need anything extra to worry about. Good on you for not giving in ! 

Evs_1955

Thanks eggbox, that completely makes sense, I’ll hold on until the day . To be honest, my main fear of having to sell the house has been eased and that’s making me feel so much less stressed. I guess it makes good sense to hold onto all your cards until they show their hand ! 

eggbox

Evs_1955
Your reaction is perfectly normal and there were lots of posters on here who went the through the same thing after the financial crash when CO's began to be the norm for DCA's to persue with many thinking they were going to lose their homes. The thing to remember is DCA's are trained to prey on fear, so if they can make you believe you are going to lose your home they feel they can panic you into making a higher, or quicker, repayment from you. But Marbelsue's experience demonstrates how they operate but no OFS was actually persued. 

Also, at the time the mass persuit of CO's began, when thousands of people were defaulting on their payments a well known District Judge wrote an artice in the Law Gazette on how poorly he thought of creditors persuing, relatively, modest debts in this manner and also DCA's who had puchased the debts at a fraction of their value. As he wrote at the time;

If a creditor is owed many tens of thousands of pounds and can credibly say that absent an order for sale he is never likely to be paid at all (in Taylor, the judgment was for £47,675; in Bell £300,000; in Pile £319,000; in Rushmer an eye-watering £987,480), it will continue to be difficult for a debtor to resist such an order.

If, however, the debt is modest in size, the creditor will struggle to satisfy a court that it is proportionate to deprive the debtor of his home in order to satisfy it.

Any creditor seeking an order for sale in respect of a debt of under £25,000 will be well advised to address the issue of proportionality specifically, convincingly and in detail.

A further issue is that many creditors seeking charging orders have acquired the debts which they seek to enforce by purchasing them for a fraction of their face value – I have personally seen sales at four pence in the pound and there is talk of debt changing hands for as little as two pence in the pound.

While of course the creditor is entitled to be paid the full face value of his debt, in assessing the proportionality of forcibly evicting the debtor from his home it must be relevant to know whether the creditor is £20,000 out of pocket or only £400.

Again, creditors will be well advised to address this issue in their evidence to the court.

District Judge Neil Hickman sits at Milton Keynes County Court.

This is why creditors will rarely enter the Courts seeking an OFS as they get rebuffed. 

Evs_1955

How interesting, I would never have thought debts could be bought for such low amounts. I’ve learned more by posting on here today than weeks of scouring the internet for info !