Ground Rent Service Charge Debt

yankee77

Hi

I am £800 behind with my Ground Rent Service Charge. I own my own flat, and they debt company are demanding now a £1000 including charges to be paid within about a week.

It says if not paid then court action will be taken and court costs etc added. It also says my lease has a right of fofeiture does that mean bailiffs can they take my flat?

I am worried as I cannot get that amount of money within a week, also I tried offering debt company low amount but said they cannot accept that.

I also have a loan with my bank and they have been kind to help me with that side of things it is just this debt company for ground rent service charge. They will also need another £500 by September.

Can someone please advice me. I have sorted my bank side of things out. Stepchange would say IVA I think but that would mess up what I sorted with my bank account.

Thank You

Lioness_Twinkletoes

Yes, service charge and ground rent arrears can result in forfeiture of the lease but it rarely, if ever, happens. No judge is going to take your home because of a relatively small debt. I worked in income recovery for eight years and we never forfeited a lease. So I'd stop worrying about that. However, what might happen is that the management company will take you to court, get a CCJ and then ask your lender to pay the debt and add it to your mortgage. They will, in all likelihood, pay it as they have a vested interest in the property (your mortgage). You'll then owe the money to your lender, which does put your home at risk if you cannot pay them.

What you need to do is either contact the management company and make an arrangement to pay. I usually calculate the arrears + ongoing charges to end March 2017 and then divide that by the number of months left (9). This will clear the debt, plus the arrears by the end of the financial year. It's a reasonable offer and the management company would be foolish to reject it. If it is referred to court, such an offer would almost certainly be accepted - although you'd have a CCJ.

If you cannot afford this, you should contact Stepchange for advice and look to set up a DMP or similar. If you cannot manage your outgoings you have little choice.

yankee77

Hi

Thank you for your reply. I do not have a mortgage as I paid it a while ago so own it now. Are you saying that the debt will just go back to the ground rent company because they have a vested interest in it?

Also could they get bailiffs?

Lioness_Twinkletoes

yankee77 wrote: »

Hi

Thank you for your reply. I do not have a mortgage as I paid it a while ago so own it now. Are you saying that the debt will just go back to the ground rent company because they have a vested interest in it?

Also could they get bailiffs?

No, if there is no lender the management company will look to recover another way. Once they have a CCJ they may request an oral examination to interrogate your finances. They could request an attachment of earnings if you are working. They could put a charge on your home - and then consider forcing a sale. They could even try and declare you bankrupt. They might indeed instruct bailiffs.

These are all fairly extreme methods of debt recovery and if you can demonstrate that you've tried to make an agreement with the company and are willing to work with them to clear the debt it's unlikely to happen - but you must deal with this now.

I'd suggest you speak to Stepchange. They are far more experienced than I am.

National_Debtline

Lioness_Twinkletoes wrote: »

No, if there is no lender the management company will look to recover another way. Once they have a CCJ they may request an oral examination to interrogate your finances. They could request an attachment of earnings if you are working. They could put a charge on your home - and then consider forcing a sale. They could even try and declare you bankrupt. They might indeed instruct bailiffs.

Some of the points raised are valid, but perhaps a little bit extreme and could be worrying for the OP. Just to clarify, if the debt is for less than £5000 then they cannot declare you bankrupt - so try not to worry about that. Once a CCJ is obtained a charging order would be the most likely first step - if the judgement exceeds £1000. And try not to worry too much about Orders for Sale because there are applications you can make to the court to prevent an such action (which is rare anyway).


If this debt was passed to high court then the creditor could considered the charging order plus bailiffs or an attachment of earnings order. The best thing you can do is stay on top of your post and seek independent free advice if you get court papers.

Don't rush into options like IVA's - they are very restrictive. Instead, do a SOA, perhaps post it here and let people see what your living expenses are and what other debts you may have because re-prioritising the debt arrangements could be part of the answer. Good luck,


Laura
@natdebtline

Lioness_Twinkletoes

National_Debtline wrote: »

Some of the points raised are valid, but perhaps a little bit extreme and could be worrying for the OP. Just to clarify, if the debt is for less than £5000 then they cannot declare you bankrupt - so try not to worry about that. Once a CCJ is obtained a charging order would be the most likely first step - if the judgement exceeds £1000. And try not to worry too much about Orders for Sale because there are applications you can make to the court to prevent an such action (which is rare anyway).


If this debt was passed to high court then the creditor could considered the charging order plus bailiffs or an attachment of earnings order. The best thing you can do is stay on top of your post and seek independent free advice if you get court papers.

Don't rush into options like IVA's - they are very restrictive. Instead, do a SOA, perhaps post it here and let people see what your living expenses are and what other debts you may have because re-prioritising the debt arrangements could be part of the answer.

I have made it absolutely clear that the debt recovery actions are extreme and unlikely - but the OP needs to be in no doubt as to the seriousness of the potential action. However, the rest of your post does echo mine.

I also advised, more than once, that the OP speaks to a debt charity.