Charging Order? The myth

fatbelly

A lot of restrictions are obtained by debt buyers. As long as the restriction is in the form you quote then complying with the restriction on sale is just a case of writing to the address on the restriction.

Ruby82

When u say
"Writing to the addresson the restriction"
What do you mean
And what do u write,
Would the charging order fall off at the time of sale if its jointly owned and shared ownership with a housing association 

tksnota

Another scenario that I hope someone can provide the answer. Assuming even if I’m in a DMP and the lender pursue a CCJ that eventually result in a restriction and not CO, do I still need to continue paying the lender the monthly DMP?

eggbox

Ruby82 said:

When u say
"Writing to the addresson the restriction"
What do you mean
And what do u write,
Would the charging order fall off at the time of sale if its jointly owned and shared ownership with a housing association 

It applies where any Charging Order that cannot be registered as an equitable charge (which in this case is because only one of the joint owners is responsible for the debt) and notification of the CO can only be registered on the deeds using a Restriction. The normal Restriction used in this case is a Standard Form K and which reads,

"No disposition of the registered charge is to be registered without a certificate signed by the applicant for registration or their 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 [an interim or a final] charging order on the beneficial interest of {name of judgment debtor} made by the {name of court} on [date] (Court reference {insert reference})".

To satisfy a Form K Restrictions terms and to allow the house to be registered in another persons name, the buyer only has to notify the creditor with the benefit of the CO that the house is being sold. Proof of that notification then has to be supplied to the Land Registry. As long as that is done, then the Restriction cannot hold up a sale. It must be understood, however (and which is the reason so many solicitors struggle with this information), that the Restriction at this point is not cancelled. It is, however, cancelled when the new buyers details are registered on the deeds.

eggbox

tksnota said:

Another scenario that I hope someone can provide the answer. Assuming even if I’m in a DMP and the lender pursue a CCJ that eventually result in a restriction and not CO, do I still need to continue paying the lender the monthly DMP?

The simple answer is yes they can. However, it would be unusual if you are in a DMP qnd the Court may ask why the action has been taken, given your in a DMP? If they do, however, and you do end up with a CO (and providing its because of a loan or credit card debt which can't attract interest) then there is little point continuing to pay any DMP at that stage (as you entered the DMP to avoid further action but its still been taken)

tksnota

eggbox said:

tksnota said:

Another scenario that I hope someone can provide the answer. Assuming even if I’m in a DMP and the lender pursue a CCJ that eventually result in a restriction and not CO, do I still need to continue paying the lender the monthly DMP?

The simple answer is yes they can. However, it would be unusual if you are in a DMP qnd the Court may ask why the action has been taken, given your in a DMP? If they do, however, and you do end up with a CO (and providing its because of a loan or credit card debt which can't attract interest) then there is little point continuing to pay any DMP at that stage (as you entered the DMP to avoid further action but its still been taken)

Is this the same case for a restriction?

Ruby82

eggbox said:

Ruby82 said:

When u say
"Writing to the addresson the restriction"
What do you mean
And what do u write,
Would the charging order fall off at the time of sale if its jointly owned and shared ownership with a housing association 

It applies where any Charging Order that cannot be registered as an equitable charge (which in this case is because only one of the joint owners is responsible for the debt) and notification of the CO can only be registered on the deeds using a Restriction. The normal Restriction used in this case is a Standard Form K and which reads,

"No disposition of the registered charge is to be registered without a certificate signed by the applicant for registration or their 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 [an interim or a final] charging order on the beneficial interest of {name of judgment debtor} made by the {name of court} on [date] (Court reference {insert reference})".

To satisfy a Form K Restrictions terms and to allow the house to be registered in another persons name, the buyer only has to notify the creditor with the benefit of the CO that the house is being sold. Proof of that notification then has to be supplied to the Land Registry. As long as that is done, then the Restriction cannot hold up a sale. It must be understood, however (and which is the reason so many solicitors struggle with this information), that the Restriction at this point is not cancelled. It is, however, cancelled when the new buyers details are registered on the deeds.

So only when the sale has gone through the CO falls off and because the Debt is on 1 homeowner its only a restriction not on the equity
Am i right?

Sorry am no good understanding this legal wording.
Would u say the explanation is correct.

eggbox

tksnota said:

eggbox said:

tksnota said:

Another scenario that I hope someone can provide the answer. Assuming even if I’m in a DMP and the lender pursue a CCJ that eventually result in a restriction and not CO, do I still need to continue paying the lender the monthly DMP?

The simple answer is yes they can. However, it would be unusual if you are in a DMP qnd the Court may ask why the action has been taken, given your in a DMP? If they do, however, and you do end up with a CO (and providing its because of a loan or credit card debt which can't attract interest) then there is little point continuing to pay any DMP at that stage (as you entered the DMP to avoid further action but its still been taken)

Is this the same case for a restriction?

Yes. Just to explain, once a CCJ has been obtained then, if still not paid, the creditor can apply for a CO. If the debtor owns their home solely, then the CO can be attached to the deeds as an equitable charge. Meaning it has to be paid, like a mortgage loan, before the house can be registered in another persons name. But if you own your home jointly, but only one of you is the debtor; the Law only allows the creditor to register a "restriction" on the deeds that notifies anyone intersted, that one of the debtors has had a CO regitered against their beneficial interest (share of the equity) in the property.

eggbox

Ruby82 said:

So only when the sale has gone through the CO falls off and because the Debt is on 1 homeowner its only a restriction not on the equity
Am i right?

Sorry am no good understanding this legal wording.
Would u say the explanation is correct.

See the answer I've given above to tksnote but, yes, the Restriction (which is the notification on the deeds that a Charging Order exists) is deemed as being "overreached" and the Land Registry, then, cancels the Restriction off the deeds.

Overreaching means that the CO was, originally, attached to the debtors share of the equity value in their property. Once the house has been sold, the equity is no longer a share of the property value as the debtor no longer owns the property. Instead, the CO is now attached to the debtors share of the physical cash that has been released from the sale of the property. The Restriction on the deeds, therefore, is no longer valid and is, therefore, cancelled.

Its important to remember, however, that the debt owed now reverts back to just having a CCJ attached to it. History tells us that posters who sell up without managing to settle the debt upon sale are rarely persued by creditors, further (I've explained plenty of times on this thread why I think that is). But you must understand that they can still persue you if they choose too. So if you purchase a new house, and the debtor has a share, they can do the same again if they so wish.

If you put cash in a single account, they can apply for a third party debt order if they locate your account (they can't if in a joint account). So its important that if you do manage to succeed in selling up without settling upon sale, you use your noggin and don't open the door again to the creditor if they do decide come after you again.

Ruby82

eggbox said:

Ruby82 said:

So only when the sale has gone through the CO falls off and because the Debt is on 1 homeowner its only a restriction not on the equity
Am i right?

Sorry am no good understanding this legal wording.
Would u say the explanation is correct.

See the answer I've given above to tksnote but, yes, the Restriction (which is the notification on the deeds that a Charging Order exists) is deemed as being "overreached" and the Land Registry, then, cancels the Restriction off the deeds.

Overreaching means that the CO was, originally, attached to the debtors share of the equity value in their property. Once the house has been sold, the equity is no longer a share of the property value as the debtor no longer owns the property. Instead, the CO is now attached to the debtors share of the physical cash that has been released from the sale of the property. The Restriction on the deeds, therefore, is no longer valid and is, therefore, cancelled.

Its important to remember, however, that the debt owed now reverts back to just having a CCJ attached to it. History tells us that posters who sell up without managing to settle the debt upon sale are rarely persued by creditors, further (I've explained plenty of times on this thread why I think that is). But you must understand that they can still persue you if they choose too. So if you purchase a new house, and the debtor has a share, they can do the same again if they so wish.

If you put cash in a single account, they can apply for a third party debt order if they locate your account (they can't if in a joint account). So its important that if you do manage to succeed in selling up without settling upon sale, you use your noggin and don't open the door again to the creditor if they do decide come after you again.

Thank u very much 
Problem is would a solicitor put the sale through of there is a co
Is there anyway a solicitor put the sale through without giving the time to creditor to respond
Or any time limits