Charge on a house

pauljason

Hello
Please, can someone advise?
My father borrowed money off of a friend. The friend loaned him the money in the form of a check from XYZ.ltd with a 'charge' against the house if it was not paid back within 8 years. During this time xyz.ltd has gone into liquidation. The liquidators have not contacted my father. The friend of my father, we now know, transferred the charge from xyz.ltd to abc.ltd a few weeks before going into liquidation.

My questions are:–
1) Can you legally move a charge as described above?
2) Won't the charge always be with xyz.ltd as THAT is where the money originally came from?

Any advice greatly appreciated.
Thanks

davidmcn

pauljason wrote: »

1) Can you legally move a charge as described above?

Yes, perfectly commonplace for lenders to sell their interest to another party.

2) Won't the charge always be with xyz.ltd as THAT is where the money originally came from?

Not if it's been assigned to another party, no.

It might be possible for the liquidators to challenge the assignment if xyz didn't get an adequate consideration for selling the loan (i.e. if your father's friend was trying to give away everything owned by xyz ltd to save it from the liquidators), but that isn't something your father needs to get involved in.

pauljason

Thank you David

He didn't sell the charge, he moved it a few weeks before liquidation.

If the money is from xyz.ltd, who would he pay the money to now?

davidmcn

If they've assigned the loan to abc ltd then he now owes the money to abc ltd.

parkrunner

Providing there is only one charge on the property for the same amount what's the problem?

Herbalus

parkrunner wrote: »

Providing there is only one charge on the property for the same amount what's the problem?

Probably the uneasy suspicion (though without evidence from what's written so far), that the "friend" who lent the money is doing something untoward to move assets out of the company that failed.

My question is around the charge against the house "if not paid back within 8 years". A charge secures a debt, but doesn't require payment within a timeframe. Unless you mean the "friend" will seek to repossess the house after 8 years and is secured by a charge to enable that to happen?

pauljason

'If they've assigned the loan to abc ltd then he now owes the money to abc ltd.' - this was done without consent - can that happen?

'Providing there is only one charge on the property for the same amount what's the problem?' not a problem as in what is owed, more a problem as to who should be paid.

'Probably the uneasy suspicion (though without evidence from what's written so far), that the "friend" who lent the money is doing something untoward to move assets out of the company that failed.

My question is around the charge against the house "if not paid back within 8 years". A charge secures a debt, but doesn't require payment within a timeframe. Unless you mean the "friend" will seek to repossess the house after 8 years and is secured by a charge to enable that to happen?' Yes, I'm suspicious that the friend moved the money knowing he was liquidating the business so don;t want the liquidators to come back and ask for the money if my father pays the friend first! Also from a legal POV is that legal to move assets out of a business you know is going into liquidation?

As for the reprossesion, no, that won;t happen as they have the money to pay back - it's just WHO do they pay and DO they need to pay if the money came from the company that went into liquidation? It wasn't a private personal loan of money but a business loan from a company that went into liquidation.

foxy-stoat

If you are trying to find ways for your Father not to pay the debt back then I don't think you can.

If you know who the liquidator was you could advice them accordingly and if the first company ended up owing money to third parties and the company moved an asset to another company for less or no consideration days before they went pop then they may of committed fraud or deprivation of assets.

davidmcn

pauljason wrote: »

this was done without consent - can that happen?

Yes, there's no need for the debtor to consent. Like I said, this is pretty standard for any "normal" lender - your bank etc doesn't have to ask your permission if they want to sell your loan to another lender, just tell you once they've done it.

don;t want the liquidators to come back and ask for the money if my father pays the friend first!

If that's the case then the liquidators would have to chase the friend for the cash.

Also from a legal POV is that legal to move assets out of a business you know is going into liquidation?

Like I said above, not if the company isn't being paid adequate consideration in return. But that's a problem for the liquidators (and your dad's friend), not your dad.

DO they need to pay if the money came from the company that went into liquidation

If there wasn't an assignment then yes, it's an asset of the company and therefore the liquidators would be entitled to be repaid the loan. Your dad doesn't get out of it just because the company has gone bust.

pauljason

“DO they need to pay if the money came from the company that went into liquidation”
If there wasn't an assignment then yes, it's an asset of the company and therefore the liquidators would be entitled to be repaid the loan. Your dad doesn't get out of it just because the company has gone bust.

Apologies David, what do you mean 'assignment'? Also, what would happen if the liquidators closed the proceedings now?

davidmcn

pauljason wrote: »

Apologies David, what do you mean 'assignment'?

The transfer of the lender's right in the loan from xyz to abc (or whatever).

Also, what would happen if the liquidators closed the proceedings now?

Not sure what you mean by "close the proceedings". On the face of it, abc ltd are now the lender, following a transfer which took place before xyz went into liquidation. Your father needn't know anything about the background to that transfer, so can assume it was above board and that abc ltd are now the lender. If the liquidators want to challenge that transfer, they'll need to take it up with abc ltd.