Charging Order? The myth

brightonian

Thank you both very much for your advice, and LRR I appreciate your limits in that one in one thousand cases may be slightly different and therefore you cannot paint everything one colour and say "this will happen"

LRR: the phrase used by my solicitor implies that only sale by a third party (mortgage company, secured loan etc) is the "only" circumstance that such a restriction can be overreached, but this thread implies otherwise?

Land_Registry

This may seem overly cautious or even too official but it is not our place to advise whether such a statement is incorrect.

I cna only reiterrate what I have already advised in this thread that a Transfer for money by two or more proprietors to a third party can overreach a form K restriction. The restriction must though still be complied with. The proprietor in this context is the registered owner and not the registered chargee (lender).

Note - a form K restriction should be cancelled automatically if registered after the charge under which the power of sale is being exercised as the registered charge overrides the interest protected by the form K restriction.

eggbox

LRR

Whilst I fully appreciate the caution that has to be taken by the Land Registry when answering questions; could you at least give an indication if there are definite circumstances that have or can arise for which the "usually" (regarding automatic cancellation of a Form K) wouldn't happen?

I encountered this situation with the LR representative I corresponded with at the (now defunct?) Stevenage office; but it did appear the "usually" was only presented as (and forgive me for this as you have been really helpful!) an all encompassing, ar*e covering statement just on the off chance there was a peculiar situation that hadn't yet arisen?

I do understand if that is the case; but an example of why not would help clarify the "usually" as being more definite.

Land_Registry

I am afraid not eggbox - the simple reason is that we can only express our views by referring to 'may, can and usually' simply because we will not express a view on questions where the law is complex or unclear except where the question arises on a live registration application.

Charging orders is a complex area of the law and whilst not committing ourselves may be viewed as 'ar*e covering' the guidance provided in PG19 and PG76, to me at least seems quite clear, as to our own procedures. The wider issue though is how others interpret the law on this subject and their obligations under it - that is something we cannot provide guidance on.

I am not aware of a definitive example of when the usually would not happen.

But I again go back to the guidance already provided - if the Transfer overreaches the form K restriction then it should be automatically cancelled providing the terms of the restriction have been complied with. The key here appears to be that the parties involved accept that the interest protected by the form K has been overreached.

eggbox

Thanks LRR

You are, of course, correct in your last statement regarding the acceptance by all parties involved being the key. However, and within the restrictions you have to work under regarding advice, I don't think you could make it any clearer to anyone wishing to understand as to the "facts" of the matter.

Hopefully, brightonian will report later that he has managed to move things along with his solicitor given the information he will have forwarded.

Arthlee

I have found this thread very helpful and reassuring especially as my own situation has worsened. I wonder if someone could offer me advice?

I have a debt in excess of £20k which is now registered as a restriction on a property I jointly own with my wife. The creditors will not accept any payment arrangements and I suspect bankruptcy and an enforced sale of the home will be the next step.

However my wife is about to inherit some money which is enough to pay the joint mortgage off. If she does this, can the property be transferred into her name or does my restriction prevent that?

Grateful for any replies.

Art

c85

Arthlee wrote: »

I have found this thread very helpful and reassuring especially as my own situation has worsened. I wonder if someone could offer me advice?

I have a debt in excess of £20k which is now registered as a restriction on a property I jointly own with my wife. The creditors will not accept any payment arrangements and I suspect bankruptcy and an enforced sale of the home will be the next step.

However my wife is about to inherit some money which is enough to pay the joint mortgage off. If she does this, can the property be transferred into her name or does my restriction prevent that?

Grateful for any replies.

Art

i doubt thats possible also if they pursue bankruptcy they have the right to assests that you have tecently disposed off (ie the house if you have just signed it over to your wife) would it not easier to clear your debts in full or with full&final offers with the inheritance? i would rather still have a mortgage to pay then at least YOU are in control not the creditors! food for thought?

eggbox

Arthlee

Can you explain a little further what the debt is related to and what you mean when you say your creditor "will not accept any payment arrangements"?

It's doubtful creditors with a Charging Order in place pursue will bankruptcy unless they have a deliberate reason? Plus, if you read this thread through, you will also see it is extremely difficult for a creditor to gain an OFS (especially on joint owned property)

With regard to your Wife's inheritance, a transfer of ownership only removes the Restriction if it's to a third party for value. So you might want to reconsider what you do with that.

Arthlee

Thanks for the responses.

The debt is not consumer related but court costs with an 8% daily interest rate. This was a long running case that went against me back in 2012. The other side then began to act very aggressively.

They ignored a full and final offer of £10,000 and went along the charging order route. We attended the County Court to oppose the charging order and I offered a £50 monthly payment - this was all I could afford. This was turned down by their solicitors.

We now have this restriction and are unsure what to do next. We don't want to make the wrong decision with my wife's money and are still bitter about how the original court case went.

eggbox

Athlee

The rules don't change because its not a consumer debt but, without the details of what the debt is for, it's difficult to advise (eg: it may be a loan from a friend/family member you haven't repaid?)

The main thrust of this thread is against creditors who offer "unsecured" consumer lending at (variable) high interest rates but who are then allowed to "secure" that lending, in default, on peoples homes.

That said, £10k is a substantial offer so is there a reason the other side refused??