Charging Order? The myth

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  • eggbox
    eggbox Posts: 1,774 Forumite
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    edited 11 April at 8:32AM
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    tiptopshrimp

    Glad you've plucked up the courage to post and, hopefully, this post will help. Firstly, don't worry about the Final Charging Order having been granted in your absence. It would have been granted even if you had attended the hearing. This is because Court data shows that a debtor has, virtually, zero chance of persuading a Judge not to grant a final charging order. However, a Final Charging Order gives the creditor no more benefit than an interim Charging Order, which is why a lot of creditors don't now bother pursuing the "Final" part as its a waste ot time, money and resources.

    With regard to a Full and Final settlement, the feedback from posters clearly indicates that creditors aren't interested in accepting them. The reason for this is, probably, two fold. The first reason, is they believe they have a cast iron guarantee their debt will be repaid at the full amount when the property is sold - so why accept less? The second reason is the full debt amount helps their balance sheet look good. So, unless a company is desperate for cash, its unlikely to accept a F&F offer under any circumstances. So I wouldn't waste my time offering one as you only encourage further contact.

    The recent  contact you have had from a creditor is, almost certainly, part of a fishing exercise to see if they could scare any debtors into repaying or repaying more. The fact you haven't and they have most likely gone away again, proves this. So just continue to ignore them as if they were going to do anything further, they would have already done it.

    The answer to whether a Court would reduce your deb,t is no. The Law states that, even if a debt collection company has only paid a fraction of the debt value, they are still entitled to the "full value" of the debt amount.

    I've PM'd you details of a company that understands Form K Restrictions and, hopefully, they can help you. Remember that creditors can only chase the debtor, so the key is not to put the debtor on the deeds, Good Luck!
  • tiptopshrimp
    tiptopshrimp Posts: 6 Forumite
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    Hi Eggbox

    Thank you so much for your reply, I really appreciate the time you spend assisting everyone on here.I will hold off then and wait to see what happens after completion (fingers crossed this goes through) but I assume they will need to prove the debt all over again in order to get another CCJ? In which case, I will start the defence process all over again (ask them to prove the debt, etc).

    Unfortunately as we still need a mortgage for our new home, my husband will need to be on the deeds (doubt a lender will allow a mortgage without this!)

    I will update the thread once I have spoken to the solicitor, and definitely after completion. 20 years of living in the same too small home due to the restriction has really got to us!
  • tiptopshrimp
    tiptopshrimp Posts: 6 Forumite
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    Hello again

    I have some frustrating issues with this.  I have spoken to the solicitor and his completions team want to notify the creditor prior to the sale.  I have been doing (a lot of) reading and I can see that solicitors have been sent very strongly worded letters following completion, so I wonder if this is now an issue.....

    Anyway, I have been asked to send over a copy of the title (which I have done) and I am trying to argue my belief that the solicitor should be notifying Northern Rock as per the title, not Cabot.  Cabot do not own the Charging Order, they only own the debt as the charging order needs to be assigned by a court, which has never been done.  I am wondering if there is any way for me to prove this?

    Thank you
  • eggbox
    eggbox Posts: 1,774 Forumite
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    Hi tiptopshrimp

    I'll answer this for you tomorrow morning when back home. But could you expand a bit more on the "strongly worded" letters solicitors have been sent?
  • tiptopshrimp
    tiptopshrimp Posts: 6 Forumite
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    Hi Eggbox

    Enjoy your evening!  I cannot believe you are on here responding when you are away from home :smile:

    I have been endlessly searching and reading posts and articles trying to educate myself today (my brain aches from over 8 hours of googling different keywords!)  I have seen posts where people have mentioned their solicitor getting letters from "Northern Rock" solicitors following the sale asking why they disposed of the property without holding proceeds for settlement.  I doubt the letters were actually from NR solicitors but I am only repeating what I have read!  From what I recall, the solicitors in question mostly seem to have ignored the letter, so I think there may be some merit in the fact that NR are the holder of the CO and cannot enforce it as they no longer exist.  However, there was one thread where the poster was worried as their solicitor seemed to be quite upset, so I am wondering if perhaps word is spreading in the legal world that this course of action is to be avoided?

    I have also seen solicitor articles online about the risks inherent in not holding monies on trust for equitable charge holders (some from chambers and some opinion pieces).  I can go back through them all to find links?

    As a side note, I was on one forum today and was reading posts by an eggboxy1 who last posted in 2016 who sounded very familar :wink:

    I have asked the solicitor whether they would be willing to just notify the actual holder of the charge prior to completion, rather than Cabot. They are seeking advice from the Law Society and the SRA ethics people (I forget the name, sorry) on whether they should hold monies on trust after the sale. I thought that once we sold, because the charge is owned by NR but the CCJ is owned by Cabot, Cabot would have to pursue us again for the money so we could finally negotiate with them as they have refused all negotiation so far.  However, if the solicitor keeps money back until Cabot respond, then they will just pay over the full amount of the charge.

    It is frustrating.  I just don't know what we can do.  I will try ringing as many solicitors as I can in the morning to see if any of them would be able to assist with this.

    Thank you
  • eggbox
    eggbox Posts: 1,774 Forumite
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    edited 19 April at 10:50AM
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    tiptopshrimp

    The first thing you have to understand is that the majority of solicitors look to protect themselves before helping their, paying, clients (and I'm talking as a father of a solicitor who, thankfully, does Family Law) It's also been proven by the advice that solicitors have given posters on this thread, that a huge amount of solicitors don't understand the rules on Charging Orders and how they are registered against property, depending on whether being completely owned by the debtor or debtors, and those where only one of the joint owners is the debtor.

    This is highlighted by the solicitors you are currently using, as there is no requirement, in a Form K Restriction, for the seller to notify the creditor. So, why do they think it's their job? The Form K Restriction places the requirement to notify the creditor on the buyer (or his agent.) It's also important to understand that the Restriction places no time limit on when this notification occurs. Only that it is carried out, and proof of such action is verified to the Land Registry. For the purposes of property deeds being allowed to be updated with a new owners details, the above notification/verification is all that is required.

    You are also correct that the creditor details as shown on the Form K Restriction, are the details to be used for notification. The fact that the original creditor has gone bust is nothing you have to be concerned about. If Cabot have had the debt re-assigned to them, then it is up to Cabot to ensure any mail directed to the previous creditor is redirected to them. The Land Registry will only be concerned with the notification having been sent to the details on the Restriction, not who now owns the debt. 

    With regard to solicitors trembling that they could get into trouble for not handing over the proceeds of a sale to a creditor upon sale, there is no obligation placed on the solicitor to do this. If any solicitor says they are obligated to do so, then ask them to show you where the Law states they have to this? The obligation is placed on the debtor to hand over the money as the Judgement was made on their funds, not the solicitors. The fact remains that in the instances where solicitors haven't handed over the proceeds to the creditor, there have been no repercussions for the solicitors involved.

    However (and we have Land Registry Rep to thank for highlighting the Court case concerned) if any solicitor is still fretting about helping you or spouting about trusts etc; then, you can now refer them to Dattani & Anr v Rasheed & Ors (the link below gives a good explanation). This clarifies and explains, that a solicitor is not going to be in trouble if they don't hand over the proceeds to the creditor for the reasons given below. 

    Solicitors can be helpful if they are prepared to sit and listen to the facts on this area of conveyancing, but sadly too many are arrogant and won't tolerate information coming from a client. So this is where you need to find a work around to get them to listen


  • tiptopshrimp
    tiptopshrimp Posts: 6 Forumite
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    Thank you so much Eggbox - I saw that case law last night (and I also read another precedent from 2017, where NR mistakenly removed a charge by issuing an E-DS1, then said they had made a mistake, reinstated the charge and the couple took them to court.  They lost :neutral: )

    This is the email that I got from one of the solicitors I contacted - I have been sending out an email with full info, HMLR Practice guides, etc but they are not willing to listen.  I am not sure whether I should try telephone calls instead?  I have only had 1 response so far - 2 have ignored me and 1 has sent an email saying they cannot comment on the restriction but quoted me for the conveyancing!


  • eggbox
    eggbox Posts: 1,774 Forumite
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    Tiptopshrimp

    Unfortunately, the solicitors email is fair enough, as they're not saying you are wrong  and they understand the process; they just aren't willing to proceed how you wish. 

    So cross them off and move on, it's their financial loss.
  • tiptopshrimp
    tiptopshrimp Posts: 6 Forumite
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    Does anyone have any details of solicitors who would be willing to work with me on a form K restriction? I am struggling right now, I need 2 separate solicitors and I can't find even 1!
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