can they do this?

lukemed1

hi there,

me and my girlfriend have a joint mortgage, I'm currently on a DMP and i think one of my creditors will try and go for a charging order on our property, but, could they do this as the loan is in my name only where as the mortgage is in both our names so therefore would they be able to do it?

any help gratefully recieved!

Best wishes

Luke:beer:

spud30

Sorry Luke, but yes, they can do it.

You own half the property.

MCBIRNIE25

WHAT IS A CHARGING ORDER?
If a creditor has a county court judgment against you ordering you to repay a debt, they may be able to apply to the court for a charging order to enforce the judgment if you do not pay.
A charging order gives the creditor security for the debt; in other words, the debt would become "secured" like a mortgage on your house, or other land.
There must be a hearing in the county court before a charging order can be made and there are several arguments you can use to try to stop an order being made.
WHEN CAN A CREDITOR APPLY FOR A CHARGING ORDER?
The creditor can apply for a charging order if they have a county court judgment against you and:
You have been ordered to pay the whole debt immediately or by a certain date, (this is known as a "forthwith" judgment) and have not done so.
or
The court has ordered you to pay the judgment by instalments and you have missed one or more payments.
If you have an order to pay the debt in instalments and are not behind on the payments the court should not make a charging order. This is because of a very important case called Mercantile Credit Co Ltd v Ellis in 1987.
HOW CAN I STOP A CHARGING ORDER?
The court must consider whether it is reasonable to make a charging order. Under The Charging Orders Act 1979 the court has to consider all the circumstances of the case and in particular:
The personal circumstances of "the debtor"
Whether any creditor would be "unduly prejudiced". This means the court has to decide if making a charging order would disadvantage other creditors.
The arguments you can use against the order being made will vary depending on your circumstances, whether you have any other debts, whether you have equity in your house and own your home in joint names or on your own.
These are some of the factors that the court may consider:
Does any member of your family have a disability or serious illness?
If you have a number of debts and making a charging order in favour of one creditor would give them unfair priority over other unsecured creditors. It is particularly useful if you can show you already have a payment arrangement in place with your other creditors. This would be upset by an order being made. Point out if any of the debts are larger than this debt and if any other creditors have frozen the interest.
Your creditor is supposed to list all the other creditors that they are aware of in the application for an interim charging order.
The court can order the interim order to be sent to the other known creditors but does not have to do this. This means that creditors who may want to object to the final charging order being made will not know about the hearing. You can raise this in your written objections and at the hearing if you think a creditor may be "unduly prejudiced" by the charging order being made.
Could the creditor have given you a secured loan when you first took out the loan? If they decided to offer an unsecured loan instead, this could be particularly relevant if you have other unsecured creditors who may be disadvantaged by a charging order being made.
There are other ways the court could enforce payment of the debt. You could ask the court to make an instalment order so you make monthly payments you can afford, or an attachment of earnings order so that the instalments would come directly from your wages. This is only useful if you are employed and your employment would not be at risk. We have a factsheet on "Attachment of Earnings in the County Court". Phone us for advice.
If your debt is covered by the Consumer Credit Act you can apply for a Time Order. Ask the court to look at this application before the charging order. A Time Order can change the monthly payments and extend the length of time you pay the debt for. We have a factsheet on "Time Orders". Phone us for advice.
If you owe less than £5,000 in total to all your creditors, you can argue that the debt should be included in an administration order rather than the charging order being made final. We have a factsheet on "Administration Orders". Phone us for advice.
If you are likely to be made bankrupt, you can argue that a charging order would give the creditor an unfair advantage over other unsecured creditors. Phone us for advice about this.
If your home is worth less than your mortgage (also known as "negative equity"), then you can argue it is not worth a charging order being made, as the creditor would not be paid off, even if they forced your home to be sold.
If the debt is very small in comparison to the amount of equity in your home, argue that a charging order would be unfair.
You should point out any particular hardship which your family would suffer if a charging order was to lead to the sale of the home. This is particularly important if the debt is in your name but you own your home jointly so it is not even your partner's debt.
If none of these arguments are successful and the court makes a final charging order, you can still ask the court not to let your house be sold as long as you pay monthly instalments. Make an offer to pay in monthly instalments at the hearing. If the court will not look at your offer at the hearing, you can still apply to pay in instalments by using an application form called N245.
THE HOUSE IS IN JOINT NAMES BUT THE DEBT IS IN MY NAME
If the debt is in your sole name, but you own the house in joint names with someone else, they have the right to tell the court all the circumstances and why they would suffer hardship if a charging order is made. They should have been sent a copy of the interim charging order and given an opportunity to go to the hearing to put their points. For example:
Who paid for the deposit to buy the home?
Who has made the mortgage payments since?
If there are children at home, ask the court to put a condition that the house cannot be sold by the creditor until the children have grown up.
The co-owner will need to file and serve written evidence of their objections at least 7 days before the hearing.
If a charging order is made by the court, then it will only apply to your share of the property.

lukemed1

thanks for the useful posts!

so basically a charging order is only really applied if i were to miss a payment on my DMP or ccj although none of my creditors have issued me with a ccj yet

Best wishes

Luke

p.s COME ON ENGLAND!!!!!:beer:

CLAPTON

you dont give any real details of the circumstances but often DCAs write letters threatening all sorts of things including charging orders to frighten you into paying them more. If you are on a DMP and they take you to court for a CCJ then if you have been paying the sums in your DMP then its likely the judge will only order you to continue your current payment level. as the DCA know this, its relatively unlikely they will even go to court for a CCJ. However, for the price of a sending a threathning letter, if you do panic and pay more that quite a result for them.

Is the DMP with a recognised agency (payplan / CCCS?) and is it the original creditor or a DCA thats hassling you...are they 'demanding' more money ?

lukemed1

Hi clapton

had one dca threatening this sort of action and had a letter from another original creditor the other day saying that if i didn't pay more then they would pass debt on to a dca who would probably then take this type of action

yes, my DMP is with the cccs

thanks for all replies so far!

Best wishes

Luke

MCBIRNIE25

Hi Luke,
don't worry, they need to have registered a CCJ and taken this to court. Suggest you speak to CCCS who will advise you of options.

lukemed1

thanks MCBIRNIE25!

you and the other posters have been very helpful!

Best Wishes

Luke:beer: