Charging Order? The myth

ohitsonlyme

What further action can be taken by the creditor after sale on a 10yo ccj /charging order once the form k has been removed

What action can be taken if the creditor find out a sale is progressing 

eggbox

"After" sale when the Form K has been removed as the new owners details have been registered on the deeds; the debt goes back to being an unsecured CCJ. Creditors can then take any option that was open to them when the CCJ was originally granted. The crucial thing for the creditor here, however, is whether it's cost effective to do so? Which is why most won't bother after failing with a Charging Order.

The creditor has to know a sale is progressing (if the Form K is to be removed) as it's a requirement of the Restrictions terms for removal) They are, however, unlikely to do anything at this stage beyond requesting the funds, as they will be expecting to be paid. Once they discover they aren't going to get paid, it's then too late as the form K has been removed.

The creditor does at that stage have the option of applying for a freezing order, but almost certainly won't do so as it's very expensive, and can be risky in being liable for costs if not successful (which is probably why I've never seen or heard of this happening.)

It must be understood that whilst the outstanding debt may be showing as several thousands of pounds, the creditors have purchased these debts form lenders for just a few hundred pounds. So, as a business, they have to consider if it's worth spending more time and effort on a debtor determined not to pay, when their exposure is just a few hundred pounds? The decision would, almost certainly, be not to do so (and which is confirmed by successful posters reporting no further contact.)

ohitsonlyme

Thank you eggbox for your prompt reply.

What action can be taken if the debt is large??

Background:

The CCJ in question was attached to the beneficial interest of my now ex wife and was gained by her solicitors in our divorce. the value is in excess £15,000 at judgement and has 12 years interest added!!

The form k was quite easily removed with my invovlement on our previous main residence.

We also own a further property that has a forrm k attached and this is due to be sold in the coming months.

I am planing to carry out the same procedure to overcome this.

Ex  is not trying to not pay the ccj holders but feels she was taken advantage of by her solicitors £15,000 as my bill was less than £2,000 The attached 8% interest is substantial!! it is this she is particularly unhappy with.

She is prepared to negotiate with them post sale of the second property

So far post sale of property 1 she recieved a letter 6 months ago asking her to pay and no further news

I suspect they realise they have the restriction still on property 2

The solicitors still own the debt

eggbox

ohitsonlyme

Unfortunately, your case is a different set of circumstances to what this thread is aiming to help and which I've explained below. The same rules apply, however, because your debt isn't to a lender concerning an unsecured loan, there are different implications for you. Firstly, avoiding repayment of the debt usually requires the help of a solicitor in not paying the debt to the creditor from the sale proceeds. Given your creditor is another solicitor, I just don't see this happening, sorry.

Even if it did happen, then as the creditor are a firm of solicitors and are owed the full debt amount plus interest; then I would say they will then use all methods available to them if the debt isn't repaid on sale. This can include an attachment of earnings order, third party debt orders and, possibly, bankruptcy proceedings. 

Whatever, the right and wrongs of the solicitors charges are (and trust me I'm no fan of solicitors), they are persuing a legitimate debt for work completed. As the debt is also attracting interest at the rate of 8%p.a., I would have to recommend you pay this debt off as soon as you are able. 

FOR THE BENEFIT OF NEW READERS, this thread is really trying to help people who have been forced to default on unsecured lending. Unsecured lending attracts high interest rates (often as high as 30%) precisely because the loan is (supposedly) unsecured. This means the person taking out the loan doesn't have to provide security, in the event the loan defaults, as they do for secured lending like a mortgage. If you default on a mortgage loan, the bank reposseses your house as you've agreed to put your house up for security, to the lender, in the event you fail to repay the loan. We do this as we get far lower interest rates (currently around 2-4%) in return and so makes the loan payments much more affordable. 

However, unknown to the vast majority of the population, when they take out an unsecured loan, whereby, they haven't agreed to provide any security for the loan (hence why the rates are so high to compensate for that fact), the Law still allows lenders to "secure" their debts on defaulted loans, through taking legal action and attaching Charging Orders against debtors assets, usually the family home. 

This, by any standards, is grossly unfair as an "unsecured" loan was taken out, whereby, no security was agreed and no account, either, is taken of the amount the debtor has repaid through the high interest rate unsecured loans attract. Even today, lenders still advertise unsecured loans in the following way (this is off the Barclays Bank Website),

What's an unsecured loan?

How unsecured loans work

Unsecured loans allow you to borrow money without offering up security based on a major asset, such as your home. 

What it doesn't explain is that, as a homeowner, if you default on the loan then you can have a Charging Order attached to your home, which gives the creditor the legal right to try and force the property to be sold to repay the debt. If we then add in that most lenders write off unsecured loans by at least 90% of the loan value, by selling them off to debt collection company's rather than helping the customer repay over a longer term; it's not hard to see the whole process of unecured lending as being, in my opinion, corrupt and unfairly biased towards the lender. That is why the help in avoiding repayment of such debts is offered on this thread to try and balance the unfairnes of the system.

GRACIE7

I have 2 charging orders,1 for Northern Rock Plc and 1 for Welcome Finance, who does the money go to if I sell my property, as they are no longer trading.

Angelcrackers

eggbox said:

ohitsonlyme

Unfortunately, your case is a different set of circumstances to what this thread is aiming to help and which I've explained below. The same rules apply, however, because your debt isn't to a lender concerning an unsecured loan, there are different implications for you. Firstly, avoiding repayment of the debt usually requires the help of a solicitor in not paying the debt to the creditor from the sale proceeds. Given your creditor is another solicitor, I just don't see this happening, sorry.

Even if it did happen, then as the creditor are a firm of solicitors and are owed the full debt amount plus interest; then I would say they will then use all methods available to them if the debt isn't repaid on sale. This can include an attachment of earnings order, third party debt orders and, possibly, bankruptcy proceedings. 

Whatever, the right and wrongs of the solicitors charges are (and trust me I'm no fan of solicitors), they are persuing a legitimate debt for work completed. As the debt is also attracting interest at the rate of 8%p.a., I would have to recommend you pay this debt off as soon as you are able. 

FOR THE BENEFIT OF NEW READERS, this thread is really trying to help people who have been forced to default on unsecured lending. Unsecured lending attracts high interest rates (often as high as 30%) precisely because the loan is (supposedly) unsecured. This means the person taking out the loan doesn't have to provide security, in the event the loan defaults, as they do for secured lending like a mortgage. If you default on a mortgage loan, the bank reposseses your house as you've agreed to put your house up for security, to the lender, in the event you fail to repay the loan. We do this as we get far lower interest rates (currently around 2-4%) in return and so makes the loan payments much more affordable. 

However, unknown to the vast majority of the population, when they take out an unsecured loan, whereby, they haven't agreed to provide any security for the loan (hence why the rates are so high to compensate for that fact), the Law still allows lenders to "secure" their debts on defaulted loans, through taking legal action and attaching Charging Orders against debtors assets, usually the family home. 

This, by any standards, is grossly unfair as an "unsecured" loan was taken out, whereby, no security was agreed and no account, either, is taken of the amount the debtor has repaid through the high interest rate unsecured loans attract. Even today, lenders still advertise unsecured loans in the following way (this is off the Barclays Bank Website),

What's an unsecured loan?

How unsecured loans work

Unsecured loans allow you to borrow money without offering up security based on a major asset, such as your home. 

What it doesn't explain is that, as a homeowner, if you default on the loan then you can have a Charging Order attached to your home, which gives the creditor the legal right to try and force the property to be sold to repay the debt. If we then add in that most lenders write off unsecured loans by at least 90% of the loan value, by selling them off to debt collection company's rather than helping the customer repay over a longer term; it's not hard to see the whole process of unecured lending as being, in my opinion, corrupt and unfairly biased towards the lender. That is why the help in avoiding repayment of such debts is offered on this thread to try and balance the unfairnes of the system.

This is exactly what's been plaguing me. Thanks to this post I looked up my land registry and found two charging orders I didn't know about in my name. I was gutted. We really wanted to remortgage or move soon and for something in like 2009 to be impacting my record now is horrible. 


Shouldn't the FCA or government be concerned about this time bomb?

eggbox

GRACIE7 said:

I have 2 charging orders,1 for Northern Rock Plc and 1 for Welcome Finance, who does the money go to if I sell my property, as they are no longer trading.

Any proceeds should go to the company that took over the businesses concerned. However, a read of this thread will demonstarte its not that simple as, in many cases, the new owner of the business can't be identified or, worse, denies owning any debt. If you are a sole owner, this can cause a problem but, as this thread explains, if you are a joint owner and the CO's are only notified by Restrictions on the register; then you can sell up (with the right help) without worrying about settling any debts upon sale.

eggbox

Angelcrackers said:

This is exactly what's been plaguing me. Thanks to this post I looked up my land registry and found two charging orders I didn't know about in my name. I was gutted. We really wanted to remortgage or move soon and for something in like 2009 to be impacting my record now is horrible. Shouldn't the FCA or government be concerned about this time bomb?

For a creditor to obtain a Charging Order on your property (or have a Restriction registered), it has to obtain a CCJ through Court. So you should have been notified of that and given the chance to defend, Likewise, you should also have been notified a CO was about to be sought and given the chance to defend the registration. If you can definitely prove you didn't receive any of the documents related to the CCJ or CO (the emphasis being on "definitely prove" as just daying you didn't receive won't cut the mustard; then you have grounds for appeal.

But, if you were under pressure at the time (as so many people were in 2009) and simply ignored the letter (as so many people did at this time) don't worry its understandable. Unfortunately, the FCA can only deal with anything unfair or illegal, the action these creditors took out is deemed, neither, unfair or illegal by the Government; hence the answer to how they feel.

The bad news is you won't be able to remortgage until the restrictions or charges are removed. The good news is, though, if there are only restricions on your property; then it is still possible to move without settling the debts upon sale.

Angelcrackers

eggbox said:

Angelcrackers said:

This is exactly what's been plaguing me. Thanks to this post I looked up my land registry and found two charging orders I didn't know about in my name. I was gutted. We really wanted to remortgage or move soon and for something in like 2009 to be impacting my record now is horrible. Shouldn't the FCA or government be concerned about this time bomb?

For a creditor to obtain a Charging Order on your property (or have a Restriction registered), it has to obtain a CCJ through Court. So you should have been notified of that and given the chance to defend, Likewise, you should also have been notified a CO was about to be sought and given the chance to defend the registration. If you can definitely prove you didn't receive any of the documents related to the CCJ or CO (the emphasis being on "definitely prove" as just daying you didn't receive won't cut the mustard; then you have grounds for appeal.

But, if you were under pressure at the time (as so many people were in 2009) and simply ignored the letter (as so many people did at this time) don't worry its understandable. Unfortunately, the FCA can only deal with anything unfair or illegal, the action these creditors took out is deemed, neither, unfair or illegal by the Government; hence the answer to how they feel.

The bad news is you won't be able to remortgage until the restrictions or charges are removed. The good news is, though, if there are only restricions on your property; then it is still possible to move without settling the debts upon sale.

Hi,

No I'm sure you are right. Maybe I did receive something. I can't find anything and I have kept all my financial documents in filing cabinets in my loft and cannot see anything but I'm sure it was on me.

So my only route would be to move? Could you not argue you are remortgaging and not increasing the loan as you want lower monthly payments and will pay up when the house eventually sells or does that not work?

Ruby82

blueback said:

I feel that this is so important that I thought a new thread should be made to highlight the importance of understanding the law on Charging Orders and how many people are stuck with their property in the false believe that they have had a Charging Order put on their property.

In particular the thousands of Northern Rock customers that have had unsecured debt turned into secured debt by their tactics.

If your property is jointly owned a creditor will not be able to obtain a CO against you, they can only get what is called a restriction.

The laws on Restrictions are totally different to Orders, the most important being there is NO OBLIGATION for you to pay any of the proceeds of the sale to the creditor.

However, during the whole court process you go through the reference from all parties (especially the creditor) will be to charging order and NOT to restriction. This is done in order to decieve you believing you are stuck with a CO.

However, not all solicitors are aware of the law in this regard and it is important that you raise this point with them in the first instance before proceeding with them

Quote:

Restriction


The restriction which can be entered on the register where a charging order is made against one of joint proprietors is in the following form :-
No disposition of the registered estate is to be registered without a certificate signed by the applicant for registration or his conveyancer that written notice of the disposition was given to [name of person with the benefit of the charging order] at [address for service], being the person with the benefit of /I]an interim[I /I]a final[I charging order on the beneficial interest of (name of judgment debtor) made by the (name of court) on (date) (Court reference.…).
You are therefore correct in saying that when the Land Registry receives an application to register, for example a transfer, we will not ask to see the consent of the person who has the benefit of the charging order. We will only want a certificate from the applicant for registration or his conveyancer that the person who has the benefit of the charging order has been given written notice of the transfer.

If both joint owners sell the land to a third party the restriction will be cancelled when the transfer to the purchasers is registered.


So I hope I have provided benefit to everyone who has had a restriction entered against them (especially NORTHERN ROCK CUSTOMERS) who believe wrongly that they are Charging Orders.

You now have the freedom to go and sell your houses with the knowledge that the vultures can do nothing

I also think this VERY IMPORTANT point needs highlighting by the moderators as many many people are stuck with houses that they believe they cannot sell

Hi
I know this is an old post
But does the home jointly owned  tactic and charging order in only one name work with a debt collector aswell.
I have a interim co by a cabot debt collector
Aswell