Charging Order? The myth

Shine25

Thank for your reply did you pay the charge order ? If not did they come after your ex wife ?

eggbox

No we didn't and no they didn't. 

I know this thread is way too long now, but you will find several people on here who've sold up and not paid the charging order up on the sale.

From memory, I can only remember one poster ever saying that their debt collection company contacted them again; and that was just a reminder that the debt was still owed. But that was as far as it went. 

Selling up and not paying off the Charging Order amount when you only have a Form K Restriction is a very easy thing to do. The only people that make it difficult are the conveyancing solicitors. 

The reason for this is because they are more concerned with what might happen to them rather than securing the proceeds for their client. 

However, a while back the Land Registry Rep on here pointed us to a Court case where a solicitor had been taken to court for not passing on the proceeds to the debtor, but had been cleared of any wrong doing. 

So as that can now be referred to as Case law, any future solicitor doing this should have no concerns. 

Shine25

Thank you so much im going to advise my solictior not to pay and ill deal with them after the sale. The only thing im a bit worried about is land reg are saying there restrictions but cabot are saying final charge orders. I think maybe they are pressuring me into paying. 

Ive tried looking through the threads and couldnt find any who havent paid. 

Thanks again 

Land_Registry

Shine25 said:

Thank you so much im going to advise my solictior not to pay and ill deal with them after the sale. The only thing im a bit worried about is land reg are saying there restrictions but cabot are saying final charge orders. I think maybe they are pressuring me into paying. 

Ive tried looking through the threads and couldnt find any who havent paid. 

Thanks again 

They are charging orders in legal terms but how they are then protected on the land register depends on who they are against - see our PG 76 and algorithms to aid your understanding of how a creditor can seek to protect their charging order depending on who the debtor is and whether they are a sole or joint owner of a property for example
Charging orders (PG76) - GOV.UK

eggbox

Shine25 said:

Thank you so much im going to advise my solictior not to pay and ill deal with them after the sale. The only thing im a bit worried about is land reg are saying there restrictions but cabot are saying final charge orders. I think maybe they are pressuring me into paying. 

Ive tried looking through the threads and couldnt find any who havent paid. 

Thanks again 

You should highlight the information that LRR has given above to your solicitor because, as this thread has shown over the years, many solicitors don't understand the way CO's are notified on the deeds on jointly owned property when only one of the owners owes the debt.

And a Final Charging order is just the Court rubber stamping the order as creditors apply for an "interim" Charging Order in the first instance for speed. 

To explain, if the property was solely owned then a CO can be registered against the deeds as an equitable charge (in the way a mortgage is) meaning the debt has to be paid from any sale proceeds before any new owner registration can proceed.

But where there is a joint owner/sole debtor sitaution, then the rules are that only a "restriction" can be registered on the deeds notifying that a CO has been made on the beneficial interest (the share of the equity in the property) of the debtor. Therefore, as long as the restriction terms are complied with, then the sale can proceed and the LR can register new details on the proerty deeds. 

So not paying the CO debt does not prevent new ownership of the property taking place. Then, when new owner details are registered on the property; the LR cancels and removes the restriction as the CO has become overreached as the CO is on the beneficial interest which has now been turned into cash.

Shine25

Thanks im not going to pay them let see if Cabot take us back to court.