Charging Order? The myth

Ganymede

eggbox wrote: »

The problem (I think!) you have is that whilst you have got a Solicitor to draw up an agreement regarding your ex's share of the property; without your ex being removed from the mortgage she won't have been removed from the deeds and would, therefore, still also be showing as a joint owner on the Land Registry (hence the Restriction was able to be placed.) She is, therefore, in the eyes of the law still a legal part owner of the property and therefore still has a "Beneficial Interest" if it were to be sold.

This would definitely be a problem if your ex were to be made bankrupt as they would come after her "legal" share of the property. It's also doubtful your Solicitors agreement would hold much weight if you have agreed that she would get half at a later date if you got into difficulties? But if you were to sell the house now to a third party then, yes, your ex's Restriction would fall away provided you employ a Solicitor who knows the law on Charging Orders.

A bankruptcy restriction is very similar to a standard one but there are a few important differences...

http://www.landregistry.gov.uk/public/guides/public-guide-11

eggbox

As you say very similar; If you are a sole owner you are stuffed but if you are a Joint Owner there is only a provision to notify the OR. There, again, appears no time limit for this and it also doesn't prevent a sale from proceeding.

yellowduck_2

eggbox wrote: »

yellowduck

Well on this occasion you will be glad your ex has a share of the property because being a joint owner means your creditor can't get a CO on your land (property) only on your "Beneficial Interest" (your share of the equity in the property). As this thread explains, a CO on BI can only be registered as a "Restriction" on the Land Registry and carries no obligation of payment should you wish to sell your property (but be wary of Solicitors who aren't aware of the differences on CO's!)

Also, if your property is your main residence there is now case law that prevents a creditor obtaining an Order For Sale so you haven't any worries about having to sell. And the 8% interest you mention cannot be applied to CCA regulated loans (despite a lot of District Judges being unaware of this fact) so make sure you are armed with the correct information should it get to the CO stage.

A lot of creditors pursued CO's as insurance against the debtor going insolvent and to gain priority over other creditors. But having spent thousands on court fees many are seeing that they are not getting the returns they expected as people are not selling up and many people (this thread a major help) have learnt that a CO on jointly owned property is very weak security for the creditor.

Eggbox thank you so much for your clear and reassuring comment, this is a real weight off my mind, really appreciate this info. I have just had another much "heavier" letter from Trident saying that they "may seek possession" of my home if I do not make a "satisfactory" arrangement with them to pay off the debt. This is despite me having the same income as when I made the arrangements with them and never missing a payment. Have contacted them and they are still going to accept the same monthly amount and will confirm it is writing so I guess they were just trying it on but I had a few stressed out days and disturbed nights. It concerns me that some people who do not have recourse to the internet or who are vulnerable for reasons of health may be coerced into paying more than they can afford as it is so scary to get letters like this.

eggbox

yellowduck

Trident are an "inhouse" debt collector for Natwest/RBS that tries to look more serious intimidating so don't worry about them. But you are right, without access to the internet many people will be scared into thinking the worst and offer more than they can actually afford. This then causes problems for them when they default on that payment.

It is nerve jangling at first but as time goes by you see these letters as a tactic to get more money out of you not an actual threat of court action. Just make sure you keep all letters of agreement by them to your repayment as whilst they will be able to move for a CO when the law changes, its a good bet they won't get one if you are paying what was agreed and are up to date.

Sparklyfairy

Yellowduck, the debt Trident are chasing - is it a secured debt? If not, that makes me so ANGRY! That's illegal & an official complaint needs to be raised to the FOS.

s.may

Hi guys,

I've been reading this thread for a couple of weeks now with much interest as my father- who is a pensioner, has one of these form k restrictions made against his jointly owned house (with mum) by dlc.

Before I came across this thread my father tried to negotiate the settlement of his 10k outstanding loan, hoping to achieve atleast a 40/50% reduction, but dlc were not interested and he continues paying installments of around £30 p/m.

The problem he now faces is that he has some expenses due to my sisters wedding to think about, and with a fair bit of equity built up he wants to sell the house and use some of the money. Reading this thread has shown me how difficult it is to sell your property to a third party with many solicitors and buyers being put off by a Form K restriction.

Because of this, we have spoken to my fathers mortgage provider about transferring the house/mortgage to my brother, this should be a workable situation as my brother lives with my parents and is willing to take on the outstanding mortgage (£30,000) plus draw some additional money from the mortgage account. The bank see no problem with this and are willing to add my brother onto my fathers mortgage while removing my father. Now, what would happen if my father were to transfer his property to my brother? would that mean the restriction would fall away or will the creditors still be owed the debt once my brother is the new owner?

poorpet

Just back from solicitor.Good news!She said I just need to change house to mine only with the land registry.Then they can't pursue the debts.Should take about 2weeks.Thank you for all the support,it helped to contact someone who knew about law.Look forward to some peace now.Fingers crossed

eggbox

s.may

The safest bet is to make it look like a "sale" has occurred rather than just a transfer. This is because to register a transfer of the property, the Land Registry will need confirmation given that the Restriction holder has been notified of a "sale". As there is no time limit given for this so, and as it's a family affair, make sure the "sale" has gone through before notifying the creditor and Land Registry.

It will definitely be worth hearing how you get on and any creditor reaction so please let us know what happens!

eggbox

poorpet wrote: »

Just back from solicitor.Good news!She said I just need to change house to mine only with the land registry.Then they can't pursue the debts.Should take about 2weeks.Thank you for all the support,it helped to contact someone who knew about law.Look forward to some peace now.Fingers crossed

Good! But, please, let the board know when its all done and that there has been no problems from creditors.

s.may

eggbox

So even though the Land Registry know that there is a Restriction in place, they will still carry out a transfer of ownership on the title deeds if they receive a request from my brother's solicitor?

Therefore their only requirement is that my brother or his solicitor inform the creditors of the sale in writing, and to follow this up with a confirmation that we have done so to the Land Registry? Seem's very odd lol.