Charging Order? The myth

eggbox

harisumo wrote: »

The removal of the restriction is a difficult problem

Selling to a third party who is arranging a mortgage on the property will (currently) prove very difficult because of the lenders probable insistance on its removal. But people selling with a Restriction need to lessen that difficulty by using the knowledge available on this site to change current conveyancing practices. (and that process has started with some of the recent sellers stories on this thread!)

sampete & harisumo

Thanks for bigup, but I'd like to make it clear that before I discovered this thread I was as clueless as every other newbie on the subject of CO's. It was only through trying to help the ex avoid a CCJ that the implications of a CO loomed large and the unfairness of them persuaded me to find out all the info I could to help.

But HERE is the place everyone seems to want to help each other and long may that continue (too many paralegals on CAG!)

abby16_2

Hi

Have now received a reply from NR solicitors who have stated that they intend to refer the matter to the courts.

They have quoted the following:

Our client as trustee of the surplus funds has a duty to distribute to those correctly entitled and further a discretion under s.63 Trustee Act 1925 to make an application to the court for directions and/or payment in if necessary.

They say as there is currently a dispute between oh and a creditor as to who is entitled to his share of the funds there client intends to exercise its discretion and make an application without further delay.

A copy of the application will be served upon all interest parties in due course.

They therefore intend to send it to the courts in Newcastle which is about 300 miles away from where we live!!!

Any advice on how we proceed now would be appreciated.

I think the sticking point is that because house was repossesed the solicitors are NR not ours but the fees were paid out of the sale proceeds of our house.

eggbox

abby16

As was said before, gaining your OH's share would be a long shot given NR were in possesion of the money. But I would still make a claim to the court on the basis the money should have been returned in the first instance to your OH as he was the legal owner of the surplus. You have nothing to lose by doing so.

eggbox

Update on Charging Order information here

sampete

Excellent info eggbox,

To quote one passage from the document:

"No doubt the aim of section 94 is to protect homeowners, struggling with small amounts of debt, from losing their properties. It may also be an instrument to prevent unscrupulous creditors from using the threat of a Charging Order in respect of a small debt as an intimidatory tactic."

eggbox

Our friends Reston's view on the changes to CO's here

(I'm amused by the DJ's having discretion part, though!)

harisumo

Are they talking about charging orders or restrictions, do the changes apply to both, they always mention installment orders but I've never had one, sorry maybe I'm being a bit thick here but sometimes it all seems a bit foggy to me.

eggbox

harisumo wrote: »

Are they talking about charging orders or restrictions

There is only one type of CO but what differs is what asset it is made against. If you are a sole owner of a property (or joint owners and joint debtors) then the Charge is made against your Land (or property) similar to how a mortgage is. This then has to be repaid, like a mortgage would, when the property is sold as it is an equitable charge.

If you are a sole debtor but a joint owner, however, current law only allows the CO to be registered against your financial interest in the property (or equity) and is, therefore, not an equitable charge. As such, it can only be notified on the Land Registry that a CO exists by a Restriction. Which, as this thread points out, does not have to be repaid when a sale of a property is made.

GracieLouFreebush

Hi everyone
Forgive me if this kind of question has been asked before but I am very new to this site.

I am recently divorced. The absolute came through in April. As yet the finances ie the house have not been sorted out as I am unable to secure a mortgage in my own name. Its worth pointing out that I have paid the mortgage on my own with no help from my ex husband. Whilst we were married, he took a personal loan in his own name. This was always paid on time. When we seperated, he left the marital home and his job. He secured employment in his home town working for minimum wage. He then stopped paying the monthly installments on the loan. For a while the loan company called my home. I then informed them of his new contact details. I heard nothing further. Our relationship is very fraught and we dont communicate. A few weeks ago I received a letter to advise that the loan company had applied to the courts to obtain a charging order registered on the property for the unpaid loan. Im so upset about this as although I understand the mortgage is still in joint name. I have solely paid the mortgage by myself and I feel that this is not fair on myself and my 2 children the fact that he cannot manage his finances. As such I want to fight against this order being made and will have to represent myself in court. I am in the process of changing the court hearing to a court more locally to myself but I would be extremely grateful for any help/advice.

Thanks:)

eggbox

Hi GLF

Your situation is not a million miles away from mine and is due because your ex still "legally" own a 50% share of the property (ans I'll bet you ran up against the same problem I had with trying to get a mortgage!)

However, the first thing you must do is to immediately write to the court to explain that you are in the process of arranging a financial settlement with your ex due to your divorce. This may (but also may not) postpone proceedings until you get a "legal" financial settlement (which you will then have to sort out with your ex)

If the court does reject your appeal for a stop on proceedings then, unfortunately, do be prepared that there is very little that stops a creditor obtaining a Charging Order under these circumstances. But do also understand that (as a read of this thread will show) the creditors Charging Order isn't all it seems if you are a joint owner.

In my case my ex was more than happy to sign over her share of the house as I had been paying the mortgage solely for over two years and had exceeded any equity due for her share anyway. We came unstuck as I couldn't remortgage on my earnings due to tighter lending rules (because of the recession) despite proving I was solely repaying the mortgage! Shortly after a CO was gained by one of my ex's creditors on her share.

Let us know what happens if you appeal on the above grounds as all information is helpful.