Charging Order threat from Nat West

yellowduck_2

Hi

I have been reading this forum for ages and have finally got myself together to write this. Basically I was made redundant in April while i was signed off sick and got approx 3 months pay. I have an unsecured loan with Nat West and a credit card with Tesco Finance. I am currently in receipt of ESA. Had a medical with them approx 3 weeks ago and am still waiting to hear what their decision is (I have mental and physical health problems) I owe Nat West £6,880 and Tesco £800. I have no other debts. My monthly payments on the NW loan are £291, I offered them £150 a month for 6 months but they refused and take the full amount each month which is eating up my redundancy payment. (it went straight into my current a\c on a BACs payment). They told me that they won't take reduced payments at all and that when I can no longer pay they will apply for a charging order on my home.I am worried sick. I have paid off my mortgage (phew) and am so scared that they will force me to sell my house and I will be homeless. It's an end terrace so I can't get anything cheaper, can they really make me homeless for a debt of this size. Tesco have been fine, they are accepting reduced payments. Can anyone help, advise or just calm my fears. thank you

Jesthar

Hi yellowduck (LOVE the name!), and welcome!

First things first, you URGENTLY need to open a new bank account (a basic bank account) with an unrelated bank and move all your income, savings and important direct debits to that (including all your redundancy money), or NatWest are fully allowed to keep taking any money which goes in. This happened to a friend of mine with HSBC a few years ago, they're STILL digging out of that particular hole... Close down the Natwest current account if you can - the golden rule is to never bank anywhere you also have a debt.

Someone will post up a link the basic bank account info soon

Secondly, you are a LONG way off the stage where anybody gets a charging order on your house - they'd have to display that you were unwilling to make any sort of payment but could afford to before they'd get that, providing you contested it (which is not the ordeal it sounds like, from what people on here have said). They are simply saying things to try and make you pay them more money, and with your medically documented problems they could theoretically get themselves into serious trouble for harrassing a vulnerable person, I think.

You could also talk to some of the debt charities for advice, or the CAB - they should be able to help with the more legal stuff

*hugs* Hope that helps get you started, and well done on asking for help

~Jes

yellowduck_2

thank you for such a quick comforting reply, I told the bank I was considering closing the account and they said that they knew I'd got enough money to pay them as obviously they'd had sight of the redundancy pay off and that they would come after me to claim it even if I moved it to a different bank. When I feel rational I think that they are just trying to scare me but as a single mum (child now grown up) paying off my mortgage was such an achievement that the thought of being forced to sell the home I have struggled to pay for makes me panic. Glad you like my name.

RAS

Hi

starting point - you must get a new bank account and then transfer the rest of your redundancy payment from your NW account.

With respect to the longer term situation, if they apply for a CCJ you need to defend it (on some grounds, come here for help) and get it transferred to your local court. This is because CCJs done through the bulk courts like Northampton take NO account of your financial situation and do not go before a judge.

As long as you do this, the court will order an affordable payment. NW will then try for a forthwith payment - if you can show you have paid in line with the court payment, this should not be granted but you have to defend the case. if they get this and you fail to pay the forthwith judgement (for the whole debt), they can try for a charging order. if you have been paying in line with the original court judgement, you may be able to prevent this using Mercantile v Ellis.

This does NOT work, and the charging order is granted, you can ask that NW are not granted an order for sale. Orders for sale are rarely granted, when the value of the debt is very high compared with the equity and the the creditor is not making any attempt to pay off the debt.

The problem is that CCjs mean the creditor usually has to stop charging interest and charging orders allow them to charge 8 %. The OFT has recently started a consultation on unfair charging orders.

serenity34_2

RAS wrote: »

Hi

starting point - you must get a new bank account and then transfer the rest of your redundancy payment from your NW account.

With respect to the longer term situation, if they apply for a CCJ you need to defend it (on some grounds, come here for help) and get it transferred to your local court. This is because CCJs done through the bulk courts like Northampton take NO account of your financial situation and do not go before a judge.

The OP won't have a defence to a county court claim if they do not dispute that the money is owed - you cannot defend a claim on the basis that you can't afford to pay. If they received a county court claim form they would need to fill out the admission form which is based around a budget sheet and make an affordable offer of payment.

As long as you do this, the court will order an affordable payment. NW will then try for a forthwith payment - if you can show you have paid in line with the court payment, this should not be granted but you have to defend the case. if they get this and you fail to pay the forthwith judgement (for the whole debt), they can try for a charging order. if you have been paying in line with the original court judgement, you may be able to prevent this using Mercantile v Ellis.

The court will not always order an 'affordable' payment - they will look at what the debtor can afford to pay but also have to take the creditor's interests into account ( as they are supposed to be impartial ). Either side can apply for a redetermination ( within 14 days ) or variation ( after 14 days ) to ask the court to look at the judgement again. You are right that if someone has been paying instalments as per a CCJ and hasn't defaulted then the creditor should not be applying for a CO and the Mercantil case is fundamental here.

This does NOT work, and the charging order is granted, you can ask that NW are not granted an order for sale. Orders for sale are rarely granted, when the value of the debt is very high compared with the equity and the the creditor is not making any attempt to pay off the debt.

It's relatively unusual that a creditor would apply for an Order For Sale and it's only likely to be granted against a single person living alone with no dependents. Judges see it as reasonable to give creditors the security of a CO but not reasonable to force the sale of a home for what was originally an unsecured credit debt.



The problem is that CCjs mean the creditor usually has to stop charging interest and charging orders allow them to charge 8 %. The OFT has recently started a consultation on unfair charging orders. This isn't the case unless the original debt wasn't regulated by the Consumer Credit Act 1974 - a creditor cannot add interest once a CO is in place.

Im not meaning to be picky but accuracy is important when you're dealing with court stuff. Bear in mind that there hasn't even been a claim form issued yet so we are talking about 'maybes' at the moment. You should phone a charity like National Debtline on freephone 0808 808 4000 for free impartial advice on your whole situation.

Good luck

yellowduck_2

Thank you all for your advice and support, basic bank account is my next step, but what should i say to Nat West about the loan? I want to offer them £100-£150 a month until I get back on my feet again. Do I write to them and enclose a SOA and an offer of payment. I have been in contact with CCS when I first lost my job and they said not to move the money as Nat West know I've got it......they also said that Nat West were quick of the mark re Charging Orders. When I offered them £150 a month they said that if I did that they would want the difference paying up front after 6 months of reduced payments(i.e 6 x £141) or they would go straight for a Charging Order. Brain and spinal cord scan this pm so really should be focussing on that......bet they'll just find an empty space in my head!

hettiecarro

Concentrate on your health first. Then come back and let us know how you are getting on.

You're not alone in this.

yellowduck_2

What lovely people you are, it's much appreciated:D

yellowduck_2

have opened a basic bank account with the Co-op,don't know how to approach Nat West re the direct debit for the loan, do I write to them and enclose a SOA and make them a reduced payment offer. I am moving all my standard direct debits to my new a\c, i.e gas, water, insurance, electricity, phone, and TV license as these are essential bills but don't know how to deal with Nat West, any advice\ideas much appreciated. p.s. hospital tests went ok, waiting for results now.

3nicky1

Dont have much advice to give, just wanted to say good luck with the results of your tests I know that cant be an easy wait and good luck with getting this all sorted. Try not to panic (i know so much easier said than done) your health is more important and for a debt of this size it sounds like they're just threatening rather than have any actual powers.

yellowduck_2

thank you 3nicky1, that's sweet of you, yeah I think they are just making a noise to scare me and as long as I pay them something regularly they can't touch my home, but this charging order stuff seems so unfair and I wonder how many people are aware that an unsecured debt can be subject to this process? After all the general advice is not to go for secured loans which i didn't. Hey ho, have had bad times before and got through them and guess I will again. Off to have lovely soak in bath now and try to relax. This forum is a reall help.