Final Charging Order despite up-to-date Instalment order

lily333

Afternoon all,

Am just looking for some advice from anyone regarding my court visit today.

The facts are as follows:

my partner and i left changed our current account from natwest to barclays and are on a DMP with CCCS. All our creditors (37k in total) accepted the DMP except natwest (I owe 5k to, my partner 8k) who after much wrangling and going round in circles decided to take us to court.

We accepted responsibility for the debt but couldn't afford Northampton's repayment terms at £760 each a month so applied for redetermination at our local court.

Redetermination took place on the 26th April. We had to be defendants in person as we were £200 over the legal aid limit! The judge accepted we were trying to pay natwest back but equally pointed out that Natwest should have some security - so he set out the judgement as follows;

1. the claimant do have permission to apply for a charging order
2.the defendant do pay the judgement debt as follows (then the sums of £43 and £60 each month are stated for my partner and I and the DMP to follow).

Unfortunately Natwest applied for an interim charging order on the 28th June. We got in touch with the CAB, national debtline, CCCS and a local solicitor who all stated that if we hadn't defaulted on the instalment order then we could object to the order being made final due to case law Mercantile credit v Ellis and the Ropaigealach case etc. Despite the "permission to apply" clause everyone we consulted thought that the case law would definitely still apply. (One institution even suggested that perhaps the CCJ would not stand up legally.....?)

Our house is also in negative equity so we also used that in our defence.

Anyway, roll forward to this morning (6th August), and the DJ looked at the notes and quickly dismissed the defence we had saying that neither case law applied as the previous judge at redetermination had include the "permission to claimant to apply for the charging order" as part of the judgement. Hence the charging order was made final despite the fact that we haven't once defaulted on the instalment order.

I'm aware that the 2007 Act was going to let the Court administer charging orders even when a default hadn't been made but thought that this hadn't been put into practice.

Sorry if this is a tale of old news to people, but if anyone has any thoughts regarding our case i'd really appreciate it - the DJ even refused permission to appeal!!

Cheers, lily

LBaum

As I am researching this I'm finding this story a hundred times over.

Northampton set a x10 figure no one can afford and make priority payments, let alone pay the rest of their creditors.

You apply for the redetermination but the hearing is after the first , or even second date set to pay the CCJ

You get a default on the CCJ because you can't afford to pay it before it is redetermined.

Because you get a default on CCJ the DCA slap an interim on you. In the meantime whist you wait for the court system to catch up with the process.

The first thing to do, believe it or not, is not to accuse NBPC of incompetence. I have been strongly advised against this because it will get the backs up of the court officials and even the Judge when you have any further dealings with the court.

The picture I am getting is that the system was intended to work like this.

1. You got a CCJ

2. If you got a CCJ and couldn't afford to pay the amount you got it redetermined.

3. If you still didn't pay your redetermined monthly amount amount the DCA got to slap a CO on your home.

OK, what seems to have happened is that DCA's and other creditors are using CO's more frequently than at the time the Charging Order Act came into being (1979) . Hence everything in 2010 runs out of sync. with everything else. This is a systemic problem noted by the DCA's and they have learned use it to their advantage.

Theoretically if you got your redetermination in before they applied for the Interim , and the amount on the CCJ hadn't been reconsidered before the first or second payment was due, then you haven't actually defaulted on the payment because the rate hadn't been fairly set.

Hence Mercentile and Ellis applies , ie you haven't defaulted on a CCJ hence they can't get a CO

Well, you would think so.

I'm am currently studying recent case law to see how this argument stands up.

I have been warned that some judges , on the day, may disregard
the redetermination figure, no matter how much the CCJ was originally for (even if it is x10+ what you can genuinely pay) in order to secure the debt, if the judge feels it is right to do so.

My gut feeling is that to set a figure so high , and then for the debtor not to be able to challenge it prior to a CO is unfair and this was was never intended in the original legislation or, nor was the volume of CCJs going through NBPC, nor the court system to which is trying to catch up with it.

Hope this is of use.

lily333

Many thanks for replying, I was thinking i couldn't be the only person in this position.

The main defence point we made to today's judge is that we've made all our DMP payments, and the redetermination judge in April kept the payments at our DMP level, (so £105 rather than the Northampton level of £760 each) so we've had no problems paying the CCJ and no defaults....... so why couldn't he accept the Mercantile v Ellis etc case law?

LBaum

Charging orders

93 Payment by instalments: making and enforcing charging orders

(1) Subsections (2), (3) and (4) make amendments to the Charging Orders Act 1979 (c. 53).


(2) In section 1 (charging orders), after subsection (5) insert—
“(6) Subsections (7) and (8) apply where, under a judgment or order of the High Court or a county court, a debtor is required to pay a sum of money by instalments.


(7) The fact that there has been no default in payment of the installments does not prevent a charging order from being made in respect of that sum.


(8) But if there has been no default, the court must take that into account when considering the circumstances of the case under subsection (5).

LBaum

Right now I don't know to which section five its referring. Check this out well because I'm only a 'Rainman' type who a DCA 'got the back up of' . But I think it might be this.

(5)In deciding whether to make a charging order the court shall consider all the circumstances of the case and, in particular, any evidence before it as to—


(a)the personal circumstances of the debtor, and

(b)whether any other creditor of the debtor would be likely to be unduly prejudiced by the making of the order.

Now don't go rushing in on that prejudice any other creditor bit, check out my post regarding Northampton Bulk Processing.

LBaum

And there's this note the date 2009:





Friday 2nd January, 2009

The Enforcement process has been subject to a number of reviews and amendments over the last few years, the latest being the introduction of the Tribunals Courts and Enforcement Act 2007.
A number of sections of this Act have not yet come into force, but are likely to do so in 2009.
There are a number of provisions which largely affect the Charging Order process, these include:

• Courts to make Charging Orders even if a debtor is not in default of an instalment order. The charge however may not be enforced, by way of Order for Sale, unless the debtor defaults upon the instalment arrangement.
• The Lord Chancellor to set regulations for a threshold limit for making Charging Order applications and Orders for Sale. The thresholds may affect the ability to obtain a Charging Order on an unsatisfied judgement or Order of the Court, with the limit thought to be about £1,000.00, similar to the threshold set under the Council Tax Enforcement Regulations adopted by Local Authorities.

RAS

That part of the Tribunals Act has never been actioned but a numnber of creditors and judges think it is in force.

it was halted with the price crash.

RAS

The lesson here is that if there is any remote chance that any of the documentation related to the account was faulty, you fight the CCJ.

And you get the CCJ hearing moved to your local court from Northampton at the earliest stage.

LBaum

RAS - - please can you show where it states for sure it is not in currently in force

I can't find anything definite to show if it is or isn't.

lily333

Thanks Ras too,

I did get my redetermination hearing moved to my local court. However the DJ agreed to the monthly payments whilst simultaneously giving permission to apply for a C.O. to Natwest back in April. They went for the interim, then got the final today and everything i said in defence to the DJ he just disregarded.

Do you think I have any chance of discharging the CO on account of the Judgement for Claimant being unusual? Or was the DJ well within his rights to add "permissions" to a CCJ? national debtline suggested it could be an invalid hybrid order but the other three I consulted didn't think it was....

RAS

lily333 wrote: »

Thanks Ras too,

I did get my redetermination hearing moved to my local court. However the DJ agreed to the monthly payments whilst simultaneously giving permission to apply for a C.O. to Natwest back in April. They went for the interim, then got the final today and everything i said in defence to the DJ he just disregarded.

Do you think I have any chance of discharging the CO on account of the Judgement for Claimant being unusual? Or was the DJ well within his rights to add "permissions" to a CCJ? national debtline suggested it could be an invalid hybrid order but the other three I consulted didn't think it was....

Try a pm to 10past6, who has more knowledge in this.

LBaum wrote: »

RAS - - please can you show where it states for sure it is not in currently in force

I can't find anything definite to show if it is or isn't.

I could hunt here for the info but it would be a year, 18 months ago.