Wanting to sell but unsure of charging orders

[Deleted User]

Hi all, this is my first post on this forum so appologies if I have posted this in the wrong section, still trying to find my way around :embarasse

I'm looking for some good advice please and hope some one can help me or point me in the right direction to someone who can help.

Here goes:(its a long one sorry)

My husband and I have a mortgage which currently stands at £131083. We were on a fixed rate when we bought the property at the end of 2006 (for £139950), but we have had some charging orders placed on the property since then so haven't been able to re-mortgage so we are now on the variable rate, which has so far worked for us as our monthly payment is now £400.07 for the next three months at least till the next interest rate review.

So we have a few charging orders, 5 to be exact. I'm not sure which order they go in but I know the amount of each as they stood in October 2010, #1 £4980.44 and is for Barclay card and is in my hubands sole name. #2 £4229.34 and is for HSBC and is in my sole name. #3 £3989.50 and is for a private nursery and is in joint names. #4 £3994 and is for Blackhorse and is in my husbands sole name. #5 £2958.04 and is for a solicitor and is in joint names.

Total is £20151.32 and they are all final charging orders on the property and are all currently reciving monthly payments of £6.52 or less which we have never defaulted on.

When we bought the house we had 2 children but have since had another two, and have converted the house from a 3 bedroom to a small 4 bedroom. Unfortunalty we have now outgrown the house and would like to sell and move into rented as we couldn't get another mortgage and my husbands fuel bill is horendous so we need to move closer to his work to save on costs.

We had the house valued on 30 december 2010 and all three estate agents advised we put it on the market at £148000 with a view of accepting around £146500. This is due to the fact there are a number of large 4 bedroom repossed properties in the local area not much more than this.

So we are a bit unsure about what to do, we need to move into a larger house, renting ours out wouldn't work as it would only rent for £600 and we couldn't be sure we couldn't cover the mortgage if the interest rate suddenly jumped. Selling is our best option and has been advised by our DMP company.

What would happen if we did sell for say £146500? I know the mortgage would be the first charge, but what about the estate agents and solicitors then all the charging orders?

There is a bit more to this but I can go into more detail later on, I don't want to confuse anyone with my main question.

Thanks in advance for any replies and for reading

bris

That wasn't the main question?
The mortgage would be cleared along with the selling costs. The rest would be split in "a pence in the pound" according to the size of the debt, this would leave you with nothing and the balance of the debt still due.
On a second look, are they a combined debt put on the mortgage by a debt managment company(my first thoughts) or actual charges, i'e second charge, third charge etc. If its the later they are paid in order of the charges.

[Deleted User]

Yes sorry that was my main question but I have so many more and have no idea who to ask for advice as the cab wasn't sure.

They are actual charges. They were getting paid alot more by the debt managemnet company to start with until the nursery one decided they wanted more money a month then what they were getting £7.75 pm just for that one, so they went firsat for a charging order and now they are getting £3.50 per month. After the other seemed to follow suit and went for charging orders too despite recieving more by the dmp. I know the nursery is the first one and the solicitor is the second one.

Can they stop the sale? I heard they can from our dmp company and what would happen in the instant? One of our main reasons for selling is to cut my husbands fuel bill down from £530 pm (before the new rise in petrol) to £150 pm so we can start to pay more to our debts and hopefully be debt free alot sooner.

sammyjammy

Could your husband find lodgings to stay in during the week? All he would need is a room in someones house and woud probably get a discount for being there only Mon - Fri. What is happening with the money you are saving on the mortgage now the payment is reduced? If you're not overpaying the mortgage you might be better off saving it for a deposit and first months rent.

DVardysShadow

My thought here is that you should investigate bankruptcy. Not necessarily to do it, but to have it available as a nuclear option if you don't get any sense from your creditors.

Of course, what you want to do is pay everything off and your plan is probably a sensible one in that direction - but it will take probably 5 years, unless the rent turns out to be more than your mortgage, in which case it will take longer - and you could only sensibly afford another £200/month on rent

I think you may be lucky to come away with £5000 after you sell the house in the current climate. So your creditors may cause havoc on any sale, because they cannot get their cut on the charging orders. This will play out as an offer coming for the house, arguments with the creditors, some who will see sense, some who will not and your buyer losing patience walking away after a horrendous delay. In this scenario, a threat to go bankrupt may concentrate minds.

Your problem is best taken to the DebtFreeWannabe's section of the forum, because your primary problem is debt, not housing

[Deleted User]

My husband only works 45 minutes away but its a 50 mile round trip and having a 7 seater car (4 kids and us two) its guzzling petrol. We can't afford to downsize as we need a seven seater and there's no point in buying a second car as I don't drive.
He works shifts so his days are not set, his shifts start at 3am till 3pm on days and 3pm till 3am on nights. He's a fuel tanker driver funily enough

When the mortgage reduced we started paying more into our dmp to clear off the rest of our debts, we have enough money saved to pay 6 months rent up front and the deposit for a rental house as with co's we couldn't rent and pay month to month as we would fail credit check, the only way to do it is to pay 6 months up front each time.

can the charging orders stop the sale going through if and when we do put it on the market? We are hoping to find out all the answers before we make the decision to sell

[Deleted User]

DVardysShadow wrote: »

My thought here is that you should investigate bankruptcy. Not necessarily to do it, but to have it available as a nuclear option if you don't get any sense from your creditors.

Thank you, we have looked into bankruptcy but as my husband is a fuel tanker driver he would lose his job, finding another one that pays as good would be very difficult so this wouldn't be an option for us.

He did speak to his boss and HR dept as he has worked for the company for almost 10 years but they have said they automatically dismiss for bankruptcy due to the nature of his job.

bris

Hi you could try a different approach which can have a good chance of success.
Write to all the creditors telling them you are thinking of selling the house and that by doing so it would raise about 50% of their debt as a full and final settlement. This would stop them having to accept £3.50 pm and would give them a substanial pay off. I know this has worked in the past so if they are not stubborn they will accept.
You can't tell the nursery you are definatly selling though as they are first in line then they would refuse. Just tell them it's an option you are considering to settle once and for all.

Hump

If the other charge holders refuse to allow the sale the mortgage company has the 'Power of Sale' under the Law of Property Act 1925 - if they consider the property is being sold at a fair price - they do tend to be a little reluctant to exercise this power.

[Deleted User]

Thanks Bris, will definatly try that one on Tuesday. I'll give them all a call and see what they say.

I have a feeling the nursery may be a little difficult as they went into liquidation a few months back and the liquidators are being right pains, but thats another bridge we will cross if and when we need to.

Thanks for the advice, I'm sure we will be back for more once the ball gets rolling on the house sale and if we do get an offer
Charlie x

bris

[quote=[Deleted User];39826278]Thanks Bris, will definatly try that one on Tuesday. I'll give them all a call and see what they say.

I have a feeling the nursery may be a little difficult as they went into liquidation a few months back and the liquidators are being right pains, but thats another bridge we will cross if and when we need to.

Thanks for the advice, I'm sure we will be back for more once the ball gets rolling on the house sale and if we do get an offer
Charlie x[/QUOTE]
Actualy thats good news, the liquidators will snap your hand off, their job is to get as much money in as quickly as they can. £3.50 per month means they will be tied to this for years, a lump settlement will be a blessing to them.