Credit Card Company Wants to Sell My Home

hsgamboy

Happy New Year everyone! I have been pointed to this board.

Hi

I am a 1st time user after many months of reading everyone’s threads. I have to say that this is a brilliant site and full credit to all of you.

Enough said, I have a massive problem and need your help.

I ran up my American Express credit card to 2k and couldn’t repay the debt. Couple of weeks ago I received a county court judgement to repay £4K and this week I received correspondence from both the solicitor acting on behalf of American Express and the Land registry that my creditor had applied to register their interest on my property and provided I don’t dispute or object by mid-Jan 2007 this would be the case.

My property is a Share Ownership scheme – 50% belongs to the housing association and the other 50% to me and my ex-girlfriend (she moved out over 3 years ago and I had been paying the mortgage, we are in the process of taking her name off the mortgage)

My question is – and bearing in mind that I cannot pay the £4K they are demanding;

1) Can my creditor and its solicitor legally exercise this threat?
2) Can they force both the Housing Association and me to sell our property to pay off the measly £4k debt?
3) When I do sell my share of the house, in 21 year (after paying off my mortgage) will they just be entitled to just the £4k or also the equity made on the property as well?

The property is worth £166k, I owe 83k of which 55k is mortgage.
I only want advice/suggestion and no criticisms please on why can’t I just pay up. I will pay the debt back in less than two years time when I am in a better financial situation. I don’t either want to borrow on my mortgage just to pay off this debt.
Look forward to your replies.

Mrs_Sparkle

I only know the answer to number 2) Can they force both the Housing Association and me to sell our property to pay off the measly £4k debt?

They won't be forcing the HA to sell their share. When you sell your share you sell it direct to the next owner- the HA retains their share.

How long has the debt been outstanding? Have you had any communications about making nominal payments? Someone on here will know a lot more than me but I'd say you'll have to come to some arrangement to pay it back as they won't want to wait "less than 2 years" until you're in a better financial situation.

hsgamboy

Thanks a lot Mrs Sparkle.

The debt has been outstanding for just under 8 months and I really don't mind paying something like £20 a month, but they wanted the full £4k prior to the county judgement.

I thought they can only recover the money from my mortgage provider when I do sell up before the 21years mortgage repayment are up. I don't understand why they're involving land registry. Is not as if the land registry would be seeing the proceed of sale (my share) should I decide to sell before the 21 years are up.

What pains me is how a 2k debt can turn up to a £4k (entirely my fault) and their reluctance to accept the small regular payment i suggested. To be Honest their attitude towards me stunk from the day i was unable to make my minimal payment.

I am inclined to make them wait for 21 years provided that all they will get from me is the £4k that the county judgement ruled. Does anyone know if the £4k I owe them will go up at when I eventually sell my share in 21 years time. I am sincerely trying pay up, but really don't mind making it harder for them as possible provided that that I wouldn't end up paying more than the £4k

kathy46

Hi. I have had a charging order on my property for 8,000 since 1999. It is very rare apparantly that they will force a sale but the charge is there to ensure that they get repayment when the property is sold.
A Charging order is a form of enforcement which means that a CCJ must already have been entered, with debts under 5,000 no interest can be added after CCJ has been entered.
The reason the charge has been made with the land registry is that is where is searched for detals when a house is bought/sold so any monies involved can go to the right people (eg, my neighbour could not sell my house as their name isnt on the deeds), this would mean that if the house is being sold they would be notified so they could get their money.
Someone will probably be along in a bit who can put it better than me but from what I can remember that's about the gist of it.
I am actually paying the debt off in installments so presumably there would have to be checks done with creditors on sale to find out the correct amount

LavenderLily_2

Kathy46 is correct that charging orders are very rarely pursued so far as to actually force someone to sell their house. It's usually just there so they are guaranteed their money when you sell up. Also, they would have to go through a judge to get an order for you to be forced to sell and for 4k I very very much doubt a judge would accept that.

hypno06

I too think it unlikely that you would have to sell your house at this point in time, but it might be worth just checking out the terms of your shared ownership agreement that you have with the HA just for peace of mind?

It is my understanding that the charge stays on there until such time as the house (or your share) is sold, and is then repaid. It has to be registered with the land registry to ensure that the money goes to the correct person at the end of the transaction. Should you pay it off prior to the house being sold, the land registry will take the charge off the property.

Bossyboots

Could the OP clarify whether the creditors are simply going to register their interest or place a charging order as these do different things. The first, will just be a registration lodged against the property which simply prevents it being sold without them being notified and thus they can insist on being repaid at that time or refuse to remove their registration (which would prevent sale).

The second is an order which could be used to enforce a sale of the property if you do not pay the debt. It is correct to say that these are usually left on the property to be repaid at any point of sale. However, it is possible for the creditor to apply to the court for sale but you have the right to defend that application which will be heard with prior notice to you.

CLAPTON

did you attend the court for the CCJ hearing and explain to the judge that you could only afford a small monthly payment.


you can refuse to accept the charging order and they can then go to court. you will have the opportunity to dispute this and put your side of the story if you wish.

i believe they can apply the statuatory rate of interest to the debt i.e. 8% so over 21 years your 4k debt will be about £20k. (8% compounded over 21 year is 403%)

hsgamboy

Thanks everyone for you replies. Can I at some stage offer the creditors to payoff the 2K I initial owed on the credit card? Are they likely to accept that as a settlement figure, rather than wait for 21 years to get their money payback?

I didn't attend the county court judgement as it was held in brigton and I live in staffordshire. In a moment of madness, I sent both correspondence back to both the solicitor and the land registry basically telling them off that they can't do legally sell my house. I don't sign any of the documentation though. What do you suggest my next step be? I realy can't afford to pay back the whole £4K at the moment.

Also I am my current mortgage deal is due to expire May this year and i was going to increase my share to 75% or even 100% through my current mortgage provider or a whole market mortgage broker. Now I can't see any lender prepared to give me a mortgage for that.

Surely they would be better off getting the money now - half or in small payments than wait until I sell up after 21 years or I might live in the house until I die (which hopefully is a very long time away). I have read on the other boards about IVA, is this something that can help me?

hsgamboy

This is a question for kathy46

Kathy you memtioned that you are currently paying off your £8k debt in bits.

At what stage after your creditor registered their interest on your property, did you start making payments?

Did you get the debt reduced? and if so How? The reason I ask if that £2k interest seem a hell lot of money to be paying back

As mentioned earlier, I have no intention of selling up now but not comfortable that someone else is on my property - well apart from the HA.

Since 1999, did you manage to remortgate without much difficulty - whilst at the same time increasing the mortgage. I really want to increase my stake on the property (my income will allow me to do so), maybe even borrow an extra £4K and pay them off.

Any more suggestions will be a great help

Anyonel else, please chip in the more advice I get the better.

Thanks a lot to all of you in taking you time to help.

mountainofdebt

hsgamboy wrote:

I really want to increase my stake on the property (my income will allow me to do so), maybe even borrow an extra £4K and pay them off.

Hello and welcome to MSE.

Please take this the way I mean it (ie not nasty) but I really don't think you will be in a position to increase your stake in the property at the mo, especially with this hanging over your head.....if you're in a hole, put the shovel down.

As for borrowing the extra money to pay off the debt, again I - personally speaking think this is a bad idea. Why run the risk of losing your home if you can't pay it?

Looking back it may have worked more in your favour if you had made those small payments but as they say hindsight is always 20:20.

Obviosuly you have to deal with the situation that you are now in and to be honest I'm not sure what the proceedure is now - ie whether you can chip away the £4K until its paid off or whether you have to pay the £4K in one lump sum....anyone out there know? (btw how is the £4K made up?)

Whatever the score is, £4K has to be found and although we MSErs can't magic £4k we have been known to find ££££s and as they say out of little acorns great oaks grow. If you post details of your income and outgoings (including balances, aprs and limits) then I'm sure you can start finding those little acorns.