Charging Order? The myth

eggbox

Well at least that answers why I got an email notification of a post but there wasn't one showing when I logged in!

Any idea what it said??

sampete

I read it quickly, thinking I`d get back to it and any response, later.
It was a question about form RX3 and whether BradB could send one to the LR in order to remove his restriction. If my memory serves me well, it was about a restriction holder, selling on the debt and the new debt owner not being correctly assigned etc BradB was asking whether under these circumstances, he/she could ask for the restriction removal using form RX3. Thats the jist of it as I remember.
I signed in today hoping for some response to the request but, the post has dissappeared?

eggbox

Strange one?

damucksta

sampete wrote: »

Hello Arthlee

My wife and I are in a similar position as yourself. Following this thread and advice from eggbox, we intend to sell to our house to our daughter for a nominal sum. This satisfies the LR criteria for removing the restriction ie property will be sold to third party ( Daughter ), restriction holder will be informed, restriction falls away after sale. Job done! So, dont worry, it can be achieved.

Nope.

You'll probably play into the creditor's hands. Think this through: you transfer your property for nominal consideration; creditor receives notice; finds out you've sold at an undervalue; applies for your bankruptcy; trustee applies to set aside transaction at undervalue and will succeed; property falls back into your bankrupt estate and is sold by Trustee as of right; creditor, as beneficial chargee strolls up to second in the queue (behind any legal mortgagee) and takes their cash in full.

Much better result for them. Ironically, if you stayed put, they'd never realistically get an order for sale under an equitable charge over your home.

Sadly, it's never that simple.

Sparklyfairy

Not necessarily.

Will a creditor be prepared to spend approx £1k to initiate bankruptcy proceedings? Possibly, but more likely NOT imo. More money spent that the banks don't have in the *hope* they'll get their money. Also, we'd have heard around on the many forums that this has taken place already.

general_garcia

A quick question if anybody has a moment? I'm in a similar situation to some folk in here, and currently considering getting a joint mortgage with a partner that currently has unsecured debt from a Northern Rock mortgage gone awry back in 2009.

She's not gone through the CCJ process or anything else yet, so we're a way off having to deal with a Charging Order, but as I understand it, the restriction would be placed on her "share of the equity", should we ever have to sell, is that correct? Does that mean that the creditor could effectively only recover half the equity if they caught us on the restriction in time?

One other caveat is that I'd have around 40k to pump in for the deposit, whilst she wouldn't be contributing anything to that initial sum. Is it possible to have that equity protected as mine when we go through the whole process?

Thanks for all your help.

eggbox

general_garcia

You have a few options. You can have the mortgage in your name only (providing you aren't in any imminent danger of defaulting on debt!) and draw up a private agreement regarding ownership.

You could also buy the house as "tenants in common" which enables your conveyancer to allocate shares in the house ownership based and agreed on the amount of deposit put in.

You could also buy the house as normal but at the first indication of any court action remove your partner from the property altogether.

general_garcia

@Eggbox - cheers for the swift reply.

Unfortunately I can't do it solely in my name, the amount we need is only feasible with both of us on the mortgage unfortunately.

From the sounds of the other options, it seems that "Tenants in Common" would be the best bet. So that would effectively legally protect the deposit that I'm putting in should it come to the stage that a CO is issued and collected on? (I realise we'd have to be extremely unlucky to get there, but always worth checking)

I presume arranging that agreement is done through the solicitor and nothing to do with the bank when going in for the mortgage?

eggbox

Yes that's right

general_garcia

Excellent, thanks for your help. I'm stressing about this far more than she is!