Credit card company placing a charge against my property

ChrisZX

I have a substantial credit card and tax debt from a business going under about 4 years ago. Following that I worked for another company but was made redundant mid December 2019 so I went self employed in January 2020 just in time for the Covid lockdown. My income has been a third of what was expected based on contract values due to my main customer and others being in the leisure industry and shut down. I've not had a penny of support from the government due to me being newly self employed (after a lifetime of paying high rate tax) as none of the schemes or grants are available to me. I've taken a 6 month mortgage holiday which adds thousands to my mortgage term. I've been unable to meet some debt repayments and now Barclaycard have sold my debt to a third party company who have involved a solicitor to put a charge against my property. This then sits there until I either remortage or sell the property at which point they get their money. The issue is I was about to remortgage to get a better rate and to borrow to consolidate the urgent tax debt and make an arrangement to pay the credit card when work picks up again. By adding this charge on the property in the next 30 days it will make the mortgage unaffordable and I may end up losing my home in a few months unless I can defer it. My question is, is this legal them securing the debt against my property when the Barclaycard credit card was taken out as an unsecured debt and at a high rate of interest because of this. I had the card around a decade paying it off in full monthly until the business went downhill. They are effectively changing an unsecured debt to secured after the event and this is not something I signed up to. Are they just chancing it and hoping I allow this to be lodged with the court without objection so they can get the money back? I have 30 days to reject it, but then they may come after the money earlier anyway when I was hoping to get to the end of the year and back on my feet. If it wasn't for my need to remortgage just as this has come through I wouldn't mind, as I fully intend to pay it back it's just that due to Covid I have no way of doing it right now.

sparelogin

Yes, it's legal.  There will have a been a long process of trying to get you to settle the debt before they ended up with the CCJ.


 

zzyzx1221

ChrisZX said:

My question is, is this legal them securing the debt against my property when the Barclaycard credit card was taken out as an unsecured debt and at a high rate of interest because of this. I had the card around a decade paying it off in full monthly until the business went downhill. They are effectively changing an unsecured debt to secured after the event and this is not something I signed up to. Are they just chancing it and hoping I allow this to be lodged with the court without objection so they can get the money back? I have 30 days to reject it, but then they may come after the money earlier anyway when I was hoping to get to the end of the year and back on my feet. If it wasn't for my need to remortgage just as this has come through I wouldn't mind, as I fully intend to pay it back it's just that due to Covid I have no way of doing it right now.

Well, there would be little point in charging orders existing if they couldn't be used on unsecured debts as secured debt, by definition, already has a charge on something.

phillw

Unfortunately for you, yes, it's legal.
https://www.thisismoney.co.uk/money/cardsloans/article-2211657/Lenders-given-fast-track-make-charge-borrowers-homes-unpaid-debts.html

https://www.citizensadvice.org.uk/debt-and-money/action-your-creditor-can-take/charging-orders/

ChrisZX

zzyzx1221 said:

ChrisZX said:

My question is, is this legal them securing the debt against my property when the Barclaycard credit card was taken out as an unsecured debt and at a high rate of interest because of this. I had the card around a decade paying it off in full monthly until the business went downhill. They are effectively changing an unsecured debt to secured after the event and this is not something I signed up to. Are they just chancing it and hoping I allow this to be lodged with the court without objection so they can get the money back? I have 30 days to reject it, but then they may come after the money earlier anyway when I was hoping to get to the end of the year and back on my feet. If it wasn't for my need to remortgage just as this has come through I wouldn't mind, as I fully intend to pay it back it's just that due to Covid I have no way of doing it right now.

Well, there would be little point in charging orders existing if they couldn't be used on unsecured debts as secured debt, by definition, already has a charge on something.

Well I would have thought this was the process carried out for a secured debt, not an unsecured one, hence my question. My previous low offers of repayment have been refused. Had my income not been so massively impacted this year I could have paid it off in full as I had arranged with them but I have been unable to do it. I've had 4 years of employment upheaval and a divorce to deal with so my household income has dropped from around £80K to £12K in that time and all savings have gone.

zzyzx1221

ChrisZX said:

zzyzx1221 said:

ChrisZX said:

My question is, is this legal them securing the debt against my property when the Barclaycard credit card was taken out as an unsecured debt and at a high rate of interest because of this. I had the card around a decade paying it off in full monthly until the business went downhill. They are effectively changing an unsecured debt to secured after the event and this is not something I signed up to. Are they just chancing it and hoping I allow this to be lodged with the court without objection so they can get the money back? I have 30 days to reject it, but then they may come after the money earlier anyway when I was hoping to get to the end of the year and back on my feet. If it wasn't for my need to remortgage just as this has come through I wouldn't mind, as I fully intend to pay it back it's just that due to Covid I have no way of doing it right now.

Well, there would be little point in charging orders existing if they couldn't be used on unsecured debts as secured debt, by definition, already has a charge on something.

Well I would have thought this was the process carried out for a secured debt, not an unsecured one, hence my question. My previous low offers of repayment have been refused. Had my income not been so massively impacted this year I could have paid it off in full as I had arranged with them but I have been unable to do it. I've had 4 years of employment upheaval and a divorce to deal with so my household income has dropped from around £80K to £12K in that time and all savings have gone.

You mention this is stoping you remortgaging but was that ever really on the cards anyway with a 6 month mortgage holiday being taken?

Couldn't you just change the deal with your existing mortgage provider?

Thrugelmir

ChrisZX said:

zzyzx1221 said:

ChrisZX said:

My question is, is this legal them securing the debt against my property when the Barclaycard credit card was taken out as an unsecured debt and at a high rate of interest because of this. I had the card around a decade paying it off in full monthly until the business went downhill. They are effectively changing an unsecured debt to secured after the event and this is not something I signed up to. Are they just chancing it and hoping I allow this to be lodged with the court without objection so they can get the money back? I have 30 days to reject it, but then they may come after the money earlier anyway when I was hoping to get to the end of the year and back on my feet. If it wasn't for my need to remortgage just as this has come through I wouldn't mind, as I fully intend to pay it back it's just that due to Covid I have no way of doing it right now.

Well, there would be little point in charging orders existing if they couldn't be used on unsecured debts as secured debt, by definition, already has a charge on something.

my household income has dropped from around £80K to £12K in that time 

Then remortgaging is highly likely to be an option once all your financial circumstances are factored in. Releasing equity to repay debt on top of everything else isn't an option either. Lenders are risk adverse. 

pbartlett

i have read a few articles over the years aboit the perceived unfairness of unsecured debt generally having higher interest rates than secured because of the risk factor, but then a charging order is used making it secured.

ChrisZX

zzyzx1221 said:

ChrisZX said:

zzyzx1221 said:

ChrisZX said:

My question is, is this legal them securing the debt against my property when the Barclaycard credit card was taken out as an unsecured debt and at a high rate of interest because of this. I had the card around a decade paying it off in full monthly until the business went downhill. They are effectively changing an unsecured debt to secured after the event and this is not something I signed up to. Are they just chancing it and hoping I allow this to be lodged with the court without objection so they can get the money back? I have 30 days to reject it, but then they may come after the money earlier anyway when I was hoping to get to the end of the year and back on my feet. If it wasn't for my need to remortgage just as this has come through I wouldn't mind, as I fully intend to pay it back it's just that due to Covid I have no way of doing it right now.

Well, there would be little point in charging orders existing if they couldn't be used on unsecured debts as secured debt, by definition, already has a charge on something.

Well I would have thought this was the process carried out for a secured debt, not an unsecured one, hence my question. My previous low offers of repayment have been refused. Had my income not been so massively impacted this year I could have paid it off in full as I had arranged with them but I have been unable to do it. I've had 4 years of employment upheaval and a divorce to deal with so my household income has dropped from around £80K to £12K in that time and all savings have gone.

You mention this is stoping you remortgaging but was that ever really on the cards anyway with a 6 month mortgage holiday being taken?

Couldn't you just change the deal with your existing mortgage provider?

I had to take a 6 month mortgage holiday due to no income coming in for 5 months. I started a new business in January and put what money I had into it, not knowing that by March we would be in lockdown and contracts that were due to be signed were delayed a few months as nobody wanted to commit. Things have picked up considerably since then but it's put me in a massive financial hole. My first years profits are going to show I've earned less than in my first job after leaving school 40 years ago. Not much use for a mortgage application but my parents are going to act as guarantor. I may well end up with a deal with my current lender but I need additional borrowing to clear the debts.

zzyzx1221

ChrisZX said:

zzyzx1221 said:

ChrisZX said:

zzyzx1221 said:

ChrisZX said:

My question is, is this legal them securing the debt against my property when the Barclaycard credit card was taken out as an unsecured debt and at a high rate of interest because of this. I had the card around a decade paying it off in full monthly until the business went downhill. They are effectively changing an unsecured debt to secured after the event and this is not something I signed up to. Are they just chancing it and hoping I allow this to be lodged with the court without objection so they can get the money back? I have 30 days to reject it, but then they may come after the money earlier anyway when I was hoping to get to the end of the year and back on my feet. If it wasn't for my need to remortgage just as this has come through I wouldn't mind, as I fully intend to pay it back it's just that due to Covid I have no way of doing it right now.

Well, there would be little point in charging orders existing if they couldn't be used on unsecured debts as secured debt, by definition, already has a charge on something.

Well I would have thought this was the process carried out for a secured debt, not an unsecured one, hence my question. My previous low offers of repayment have been refused. Had my income not been so massively impacted this year I could have paid it off in full as I had arranged with them but I have been unable to do it. I've had 4 years of employment upheaval and a divorce to deal with so my household income has dropped from around £80K to £12K in that time and all savings have gone.

You mention this is stoping you remortgaging but was that ever really on the cards anyway with a 6 month mortgage holiday being taken?

Couldn't you just change the deal with your existing mortgage provider?

I had to take a 6 month mortgage holiday due to no income coming in for 5 months. I started a new business in January and put what money I had into it, not knowing that by March we would be in lockdown and contracts that were due to be signed were delayed a few months as nobody wanted to commit. Things have picked up considerably since then but it's put me in a massive financial hole. My first years profits are going to show I've earned less than in my first job after leaving school 40 years ago. Not much use for a mortgage application but my parents are going to act as guarantor. I may well end up with a deal with my current lender but I need additional borrowing to clear the debts.

I doubt you're going to get additional lending with your current financial situation.

eskbanker

ChrisZX said:
I need additional borrowing to clear the debts.

No desire to provoke in a stressful situation but 'borrowing to clear debts' is something of an oxymoron so best think about how that comes across if negotiating with prospective lenders....