Legal Charge on Property - Ethical?

Bagpipebill

Urgent advice seriously required. All my creditors are being dealt with by Payplan, although they all complain that they have not received any communicaiton from them. My bank, First Direct, have received my financial statement from Payplan but now wish both myself and my wife to sign a voluntary legal charge over the property which currently has negative equity of approximately £30,000. I have been advised that they can put a Charge on to the property and force us to sell the house although there is no way that they will ever receive their money. I wonder if anyone out there can advise as to the ethics in this matter and whether they should be referred to the Banking Ombudsman.

Anyone? Any advice would be gratefully received.

BB

CLAPTON

i dont do ethics but about the charge over the property.

do not agree to a voluntary agreement

if and i say if they want to pursue the option of a charge they have to go to court to get a CCJ. obviously you will be able to present your situation at court.
the judge will make an order for you to pay something to them.....this will probably what your paying now. only if you dont keep up the payments can they go back and ask for a charging order.
they know this which is why they almostly certainly dont do it and are trying to frighten you into agreeing to a volunary agreement...dont do it.

and by the way even with a charging order they can't force the sale of you house without an order from the court.

Tootsie_Roll

CLAPTON wrote:

the judge will make an order for you to pay something to them.....this will probably what your paying now. only if you dont keep up the payments can they go back and ask for a charging order.

Sorry but this information is wrong.

The bank in this instance will apply for a 'forthwith judgement' meaning they require the full balance immediately - no payment arrangement. Unless the OP can come up with the money they will get the charge anyway AND will incur all the legal costs as well.

This is now the defacto standard for most banks and dca's where they know the person owns their property, very few companies will go for any other type of judgement on a homeowner.

Bagpipebill

I wouldn't normally recommend signing a voluntary charge either but it could end up saving you money in the long run - very difficult decision !!! One thing though, they are very unlikely to force the sale of your home, particularly if you have negative equity.

Bagpipebill

Thanks for the information. Just a little confused in respect of the "forthwith" judgment. Have been searching frantically all afternoon and most Courts should take into account your finances and ability to pay the Creditor before agreeing to any judgment otherwise surely anyone can just take your assets without you actually trying to reach an agreement? Problem is that I have been trying to speak to First Direct regarding this and they advised that they would be sending something in writing two weeks ago. I am extremely concerned that I have not heard anything from them and that they may be taking matters into their own hands. Have written to them requesting matters in writing both email and letter this afternoon. Unfortunately despite my best efforts they are tending to ignore my correspondence. I have kept copies of all emails, etc to them which shows that I have done everything I possibly can so surely this should be taken into consideration. I will consider a voluntary charge but would wish to take financial/legal advice before signing it. I am not happy with them just sending me a Charge to sign and return without a proper explanation first.

fatbelly

Tootsie_Roll wrote:

The bank in this instance will apply for a 'forthwith judgement' meaning they require the full balance immediately - no payment arrangement. Unless the OP can come up with the money they will get the charge anyway AND will incur all the legal costs as well.

This is now the defacto standard for most banks and dca's where they know the person owns their property, very few companies will go for any other type of judgement on a homeowner.

The courts decide the terms of a judgement, not the claimant!

The claimant may well ask for a forthwith judgement, and might even get one, but the defendant has the right to redetermination by a district judge if applied for within 14 days.

And if outside this timescale the debtor should apply to vary the order to monthly instalments using a N245.

In_Search_Of_Me

In view of fact payplan dealing with your case can you get any advice from them about the specifics? Sorry to hear things so stressful & hope you sort it soon. Big hugs.

Toto

My understanding is that the creditor has to get a CCJ first. Then you have to default on the payments of the CCJ before they can apply for a charging order. If you apply to the court for payment terms and stick to the agreed amount the creditor can't ask for a charging order.

I might be wrong but that is how I understood the fact sheets on national debtline's website.

aimingforadebtfreelife

the voluntary arrangement is called a Tomlin order - its where you voluntary agree to a charge on your property without going to court and done through the companies solicitors. Dont do it, you can put a case forward to a judge. I wanted initially to do it to stop interest being charged which the company agreed but later backed down and still wanted to charge interest.

Be warned though about the paperwork you may get. I was with Northen Rock on a £11000 unsecured loan. They rejected paypal offer. It went to court and I forwarded the budget planner. Even though the court could see what I offered was all I could afford they refused it and requested the balance in total and placed a charge on the property pending it going to hearing straight away. I had visions of my house been taken away- I was scared and wrote to the chief exec of Northern Rock - I then get a letter from the woman I was dealing with at Northern Rock to say under the instructions of the chief exec he would accept my monthly payment I was making (£11 a month) on condition the charge went ahead and he would instruct the solictiors to accept this. It was accepted. I could have gone to court and put my case about why a charging order was unfair - I was just relieved my offer was accepted.

So dont be alarmed if they go for a prelimary charging order. They can and will do that straight away. Best of luck to you, its hard but you will get through!

CLAPTON

bagpipebill

sorrry been away and only just reviewed this

although Tooties Roll is rarely actually incorrect technically he/she is usually wrong in practice...but he/she loves to wind everyone up with the worst possible out come..and why not if you work in the debt recovery industry...

judges decide and not plaintives

do not sign a voluntary agreement

see whats happens

EllieB_2

Hi
I assume First Direct don't yet have a county court judgment. The key issue here I think is that you are already in negative equity. Therefore as you rightly state, a charge on your house would be pointless. If they issued a judgment the court should look at your circumstances. Some courts will issue a "forthwith judgment" but normally only if you are a homeowner with equity. (A forthwith judgment means payment in full rather than in instalments.) The lender would have to ask leave of the court to place a charge on your property - if they did this your defence would be there is no equity against which they can secure the debt. I cannot see a court agreeing to a charge when there is no equity to secure it against. Don't agree to a voluntary charge - refer them back to Payplan as your representative and stick to your payment offer. They are just trying to scare you.

Tootsie_Roll

CLAPTON wrote:

bagpipebill

sorrry been away and only just reviewed this

although Tooties Roll is rarely actually incorrect technically he/she is usually wrong in practice...but he/she loves to wind everyone up with the worst possible out come..and why not if you work in the debt recovery industry...

judges decide and not plaintives

do not sign a voluntary agreement

see whats happens

Clapton strikes out again !! http://forums.moneysavingexpert.com/showthread.html?t=222195

I try only to give the actual facts in situations like this. Haven't worked in Debt Collection for a while now.

My advice still stands; I wouldn't advise you to go ahead with a voluntary charge but as there is no equity anyway you have absolutely nothing to lose, if you wait for it to go to court then you will have to pay all their legal costs as well which could run into thousands (assuming they get the charging order).