They want to put a charge on my house!

Hi I just wondered if anyone could help me with some advice. I have credit card debt of over £6K and haven't keep up the payments as I haven't had any funds to do so. I am now seeking part time work as I have a child who needs to be cared for, but the company have now handed the debt over to a debt collecting company who had told me today that I must either pay the debt in full or else pay in excess of £250 per month - which I won't even be able to afford when I work part time. The other alternative is that they say that they will take me to court and put a charge on my property. I don't want this to happen and they say I must give them an answer by Tuesday or they will proceed with court action.

I asked if they will take payment of a lower amount each month but they have refused. What can I do??


  • nickinoo
    nickinoo Posts: 617 Forumite
    What an awful situation to be in. Did you try & contact them before things got to this stage? I think it's very unreasonable for them to refuse a lower amount but wonder if this is more to do with the debt collection agency. I trained in credit management for BT & basically once the debt had passed to the agency BT wanted nothing more to to with it.

    Contact these people (according to the website they are open until 1pm today) & also your local CAB for advice. Do you have any legal protection with either your house insurance, car insurance or bank account? They may be able to give advice as well.

    Good luck with it all.
  • Hi Bagpuss, been there and done that - it is a very stressful situation but you need to keep calm and act swiftly or it will get out of hand.

    Make every effort to try and sort it out with them (keep records of conversations, letters, names, etc) but if it does go pear shaped and you end up in Court FIGHT THEM every inch of the way. I did this twice and both times the Judge refused to give them the order. I never disputed that I owed the money and was trying my best to pay it back but they wanted more, they wanted a piece of my home that I had fought hard to keep - it was TOO MUCH and I was determined they were not going to get it. Both times the Judge slashed the amount I had been paying voluntarily (one from £40 per month to £5 per month, the other £60 per month to £20 per month) and told them that was all they were getting because they were too greedy.

    I discovered that if they DO get a charging order on your home, the interest keeps getting added and you can't sell your house until it is satisfied - you can see whey they try and do this, very nice little earner for these vultures for minimal effort.

    My tip is try and keep the debt down to below £5K if you possibly can (this is the magic figure over which they can ask for the charging order) and / or let them try it - if you prepare your case well, are totally honest with the Judge and back up your case with evidence (eg you were out of work for a time so show him/her some evidence of this) I would be very surprised if they would get the charging order WHICH IS WHAT THEY ARE AFTER. If you can make an offer to pay the debt and it will be paid off by the time you retire (dunno how old you are, but that was the formula the judge used for us) the Court seem to be satisfied with this. eg £5k debt over (say) 30 years = repayment offer of £14 per month (I would offer more than that but they would probably take that amount if you prepared a SOA that showed that was all you could afford.)

    There is one good thing that would come out of this and that is that all the hassle with the debt would stop once you have the CCJ, they can't do a thing to you so long as you pay the amount of the Court Order on time.


  • margaretclare
    margaretclare Posts: 10,789 Forumite
    I discovered that if they DO get a charging order on your home, the interest keeps getting added and you can't sell your house until it is satisfied - you can see whey they try and do this, very nice little earner for these vultures for minimal effort.

    Hi Stella

    Good advice, except for one tiny point as quoted above. You CAN sell your home, but the 'first charge' on the property means that the charge plus interest has to be paid first out of the equity.

    We know this, because it happened with my husband's second divorce. Madam (his ex) ran up huge legal bills, querying this, that and everything else, telling lies, sometimes her solicitor would be sending 3-page letters twice a week. She did this thinking that he would be forced to pay all costs. He wasn't - the judge decided not. Her bills were too excessive for legal aid, so although she was given his share of the equity in their matrimonial home (in exchange for him keeping his annuity) she was also slapped with a bill for £4K which was placed as a charge on the property. As this was in 1999 it will have rolled-up by now. (Is it nasty of me to say 'serve her jolly well right'?)

    This doesn't help you, but yes, you can sell the property subject to a ' first charge' being satisfied before you can use the equity for anything else. Much better not to get the charge in the first place. Judges are very reasonable people, they're well aware that you can't get blood from a stone.
    The creditors will try and threaten all sorts to get the money out of you, they don't care what else you have to go without. Whereas the Judge knows you have to eat etc.

    Follow Stella's advice!

    Best wishes

    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • Xbigman
    Xbigman Posts: 3,884 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Here's a word of encouragement. I have had court proceedings against me twice and taken out by me twice. I 'won' all four times. I never used a solicitor and only spent the cost of a few photocopies.

    When the paperwork arrives (IE the summons) read it carefully then see the citizens advice bureau for additional advice. Also visit your local magistrates court as the clerks there are usually very knowledgable about court procedure. If the case is not in your area you can usually request it is moved to somewhere you can get to. A lot of debt collection agencies just use the threat of legal action to scare you. They soon back off if you do this because it costs money for them to proceed.
    If the debt is large the hearing will go ahead. Don't be scared of the court, they can be your friends. Turn up early, dress tidily in something subdued / business like. Treat all court officials with respect and do not shout or swear. Do not take your children with you.
    Write down what you have to say. You can read out a statement in court if you like. Take supporting evidence such as copies of all letters from and to you as well as dates and times of all phone calls (you did write them all down with notes on what was said, didn't you?).
    In your circumstances you want to show that you are doing your best to meet repayments. Show them your budget and prove your offer is as good as it can be. Try to show that the debt collection agency is being unreasonable IE they rejected several lower offers or didn't reply to letters. If there are a lot of additional charges or interest tell the court this is haf the problem and ask for interest to be frozen and charges annulled. Magistrates can't do this only county courts, but ask anyway. If it looks bad then ask for a 48 hour adjournment to seek advice with the CAB. If you get it, go back and try it all again. NEVER give up without a fight.

    I twice issued a summons for the secretary of state for health to come to the local magistates court in connection with the CSA. First time they wrote to the court two days before the hearing and caved in. Second time they sent a very unhappy flunky with minimal paperwork. I presented a huge stack of wageslips plus about 9 years worth of letters to and from me. This included a summary (done by me) of all my payments showing I was not in arrears. The magistates didn't even look at it all, just the fact I had it was enough.

    I was also taken to court over a loan of 5000 I had taken out. I argued that I was desperate and had been stupid in taking out this loan. I showed my copy of the application form where I had truthfully detailed my outgoings and that the Lender had acted irresponsibly in lending the money. The court accepted that I had no money, froze the interest and I had to pay £15 a month and not the £250 the creditor wanted.
    I also successfully fought off an attempt by an insurance company against my (then) partner. I'll keep this short. I had a house repossessed after I went bankrupt and the insurance on the loan (10K including 1K for ins) paid out 22K to the second charge holder. I argued that this was unreasonable and that the amount payable should be reduced to 10K at most. I also argued that she had no income so interest and charges should be frozen. Lastly I argued that I took out insurance for just this sort of eventuality and they should grin and bear it. Their solicitor didn't agree so I asked for an exact breakdown of the charges, specificly the administration charge IE how many letters / phonecalls had they tried. As the solicitor didn't have this a 7 day adjournment was ordered. 4 days later I recieved a letter from the court, the complaint had been withdrawn. We never heard from them again.

    Xbigman's guide to a happy life.

    Eat properly
    Sleep properly
    Save some money
  • livilou
    livilou Posts: 148 Forumite
    this happened to us recently, we had offered a smaller payment amount and the credit card company would not accept it, so they took us to court, you get issued with an interim order with a court date, prior to that we received a determination ordering us to pay £10.00 a month, joke being we had already offered to pay £70.00 a month ont he debt, so they kind of shot themsleves in the foot really. However circumstances took over and we never had to go to court as my husband was declared bankrupt shortly after so i can offer any advice on experience of attending court. Don't be frightened , act quickly, write to the company offering an amount with justification i.e. budget summary. Keep copies and if it does go to court, you will be in a better position if you can prove that you have nmade every effort to repay the debt. Also look at the national debtline info, is your mortgage jointly owned? and the debt only in one partners name, as I found after reading some info that if the debt is in one persons name but the mortgage is jointly owned it is worth writing to explain that.good luckx
  • stellagypsy
    stellagypsy Posts: 416 Forumite
    Just popped back to see how Bagpuss is getting on - please keep posting, we will all try and help you through this.

    Thanks for clarifying that about the second charge, Margaretclare, that makes the position a lot clearer. The danger with these charges of course is that the interest keeps accumulating (BTW, this is charged at "Court rate" of 8%) and depending where you live, the house prices might not be so strong and could actually fall - this can be a very dodgy scenario if you have a low amount of equity in your property. So it is well worth putting up a fight to prevent them getting their claws in to your home.

    Stella xx
  • kaznelson
    kaznelson Posts: 463 Forumite
    First Post First Anniversary Combo Breaker
    Hi, I would start to make monthly payments TODAY. Send what you can £5 or £10 but make sure you do it on a regular basis & make sure you keep accounts of everything you send.

    For the debt recovery company to be able to put a Charge on your Property they must first get a County Court Judgment. Then they have to proceed with the charge. All this takes time and by the time you get to court you position will be better as you have shown a willing to pay off the debt.

    Like the others say once you get to Court stand your ground and fight!! I know it sounds scarey but it will only be you, the Debt Recovery Company (if they show) and the Judge in a small room. From experience (Im a Debt Recovery Manager) the Judge will opt in you favour if you have shown willing.

    You can also ask that the interest be frozen.
  • bagpuss
    bagpuss Posts: 124 Forumite
    Thank you everyone for your help - it has made me feel so much better. I was going to do a budget outline as on the CCCS website and tell the company that I had done this and was getting assistance from them in the hope that they could see I was attemping to clear the debt.

    Unfortunately I had ignored the debt as I had lost two grandparents recently within less than a week of each other and couldn't face dealing with things. As you can imagine this got no compassion from the company concerned. Thank you all though once again for this advice - I am so glad that I become a member of this site as it makes you realise you aren't the only one!

    Will keep you all informed about what happens.

  • margaretclare
    margaretclare Posts: 10,789 Forumite
    Hi Bagpuss

    Condolences on the loss of your grandparents - these things always seem to happen at the worst possible time. As the saying goes, 'S**t happens'.

    I would endorse all the good advice you've been given. It will take an awful long time for court proceedings to go through, and even if they try to slap a charge on your house, the fact that you've really tried your best to pay what you can, will very much count in your favour.

    From what I see and hear at CAB, the people who are really <i>not</i> liked by the courts are those who've managed to ignore and ignore everything in the hope that it will go away. Like a woman I saw just before Christmas - she'd bought some clothes from a high street store on a storecard, hadn't paid, had ignored everything from the storecard's monthly statements right through to a court summons, ignored even that, got a judgment slapped on her in her absence, THEN she thought of asking for advice, the day before Christmas Eve!!

    Best wishes

    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • Spendless
    Spendless Posts: 24,138 Forumite
    Name Dropper First Post First Anniversary

    I don't want to hi-jack this thread or get it off-topic so it doesn't help the OP but i wondered if someone could answer me this.

    The original debt is a credit card so wouldn't this be an unsecured debt? So how can a charge be put on the house for an unsecured debt? If it can doesn't it change this unsecured credit card debt into a secured one?

    I ask because on many times i have seen posts by people who have run up debt but have equity in their house? Often they ask if they should put the debt onto their mortgage instead and frequently they are told no as this changes an unsecured debt into a secured one and so they put their house at risk if they don't keep up the repayments?

    Isn't putting a charge on the house from a credit card debt the same thing?
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