HELP Wrong advice given by charity and now even Bankruptcy looks like it won't help

ccastley

Hi all,

I really hope someone reads this who can help.

We've been in serious trouble since last year due to many things going wrong which I'm happy to go into if you think it's relevant.

In the main, we are 4 months in arrears with our mortgage and secured loan and we have just had 2 charging orders granted on the house (debts my husband had before he met me, never mind before we bought the house).

Just to briefly give you a picture of where we are:

House is worth approximately 100k
Mortgage is 89k
Secured loan is 18k
Charging order 1 is 14.5k (granted a week ago)
Charging order 2 is 9.5k (granted today)
Approximately 14k in unsecured debt

We wanted to contest the charging orders (there are various reasons for this which again we're quite happy to elaborate on if anyone who could advise us needs us to) and were working with a local debt charity who told us not to worry about it, that they would come along to the court with us and sort it all out, so in good faith, we didn't lodge the appeal we could have with the land registry and when my husband went to court, the charging orders were granted and weren't permitted to have any say.

We've now realised we've been given nothing but duff advice and instead of the charity looking at the more sensible options of and IVA or bankruptcy they were working on a DMP and have told us to sell up and pay off the debts. If we did this we would be paying more rent than we are on our interest only mortgage at present, and probably end up in a very bad area which I would not be happy to bring up my son in, as well as being in loads of debt still. Admittedly we're not left with a lot of choice, but I just don't know what to do.

Does anyone have experience of a similar situation?

In an ideal world, we'd like to go bankrupt and keep the house, as I know can happen in some cases, but I'm not sure if we could?

My husband has just managed to get a permanent job but as of six months ago I have been unable to work due to ill health and will be unable to work for the forseeable future (don't imagine this stress aids my recovery...:rolleyes: )

I suppose the help I'm looking for is to see if there is any way to appeal against charging orders after the fact, as in our case we in good faith thought the charity were doing it for us, so would have of course done it ourselves had we realised that they were not. In case you're wondering why it got to this stage, basically the first we heard was from the Land Registry notifying of us of the interim charging order that had been granted (2 days before Christmas no less) - I'd never even heard of one. They had been writing to my husband's former address even though it was 200 miles away and they clearly knew where we were now as the interim order was granted at our local court. One of the many reasons we were appealing.

I really hope there is someone out there who can give us some advice. We put our situation in the hands of the people we were advised to and they have really made it worse, and we're just not sure where we go from here.

Thanks in advance

Crystal

Scarlett.1974

Hi Crystal,

It sounds like a rather complicated situation, one which I'm afraid I know nothing about, but I'm sure someone will be able to advise you soon.

One thing though - which debt charity was it you went to? One of the others may be able to advise you further - CCCS, National Debtline, Payplan or even the CAB.

Re bankruptcy - if you house is in negative equity then you should be able to remain in it if you were to chose to go BR, as long as you could still afford the repayments to your mortgage and SL (and as long as the OR didn't think these amounts weren't too high). I don't know about the charging order debts though, if you would be able to have these included in the BR or if you would still need to keep paying them to ensure your house remains safe.

As I said, I'm sure someone more knowledgable will be along soon.

Scarlett

silvercar

In an ideal world, we'd like to go bankrupt and keep the house, as I know can happen in some cases, but I'm not sure if we could?

Have a read of this thread:

http://forums.moneysavingexpert.com/showthread.html?t=663547&page=2&highlight=secured+bankruptcy

In particular post #24 by Richard_S explains which loans/ mortgages the Official Receiver is likely to allow and which he won't.

If you defaulted on the loans connected with the charging orders but kept up with repayments on the mortgage and secured loan, the charging order creditors would be unlikely to repossess as they would not get any money from the sale of your house.

If you went bankrupt and didn't keep the house, all the debts that weren't paid off by the house sale would be included in your bankruptcy, so you would be rid of them.

While your property value is outranked by the mortgage and secured loan, the charging orders are pretty meaningless and I would suggest you concentrate energiees on sorting out your finances rather than worry about the legalities of them.

Hopefully your recent increase in income will give your a more positive outlook.

Richard_S

Hi Crystal,

The only thing I can add to Scarlett and Silvercars' post is that you probably could stay in the house, and if house prices stay as they are or fall, you may well be able to stay there for a number of years.

The problem is the secured loan and the charging orders are always going to be there, and if there's ever enough equity in the property then that's likely to prompt one of them to enforce their security and respossess.

Richard

Conor_3

Just to add, why do you think you'll end up in a bad area if you rent? My parents and in-laws are in very nice houses far better than they could afford to buy.

ccastley

Hi all,

First of all thank you for all the helpful and illuminating responses.

Scarlett - In answer to your question, it was none of the charities you've named, but it was an MSE recommended one (even though they've screwed things up sooo badly I don't want to name and shame as I am the only one on these boards that I think has had problems with them and I don't want to put anyone else off getting help...). CCCS weren't much cop when I spoke to them, just kept telling me to sell the house and I suppose that's not what I want to hear. I'm now talking to Clearstart who are not a charity but do not charge us anything. If anyone has anything bad to tell me about them now would be the time! lol

Silvercar - thanks for the info; I've read girlie's thread with interest...a few things to mull over there.

Richard_S - thanks for the info, not only here but on girlies thread. It's helping me to understand the process a bit more though I'll still confess myself to be in over my head.

Bearing all I have read in mind (and thank you again for responding and pointing me in the direction of such useful information - you've been more help than everyone else put together!) I still have a few concerns:

As far as you know is there any way to get charging orders overturned? I'm so angry we misplaced our trust, but we were misadvised and the first we heard of the applications was from the land registry, thus not even giving us the opportunity to come to an arrangment prior to applying to the courts.

To explain the charging orders in further detail so you can see where we are coming from with our appeal, this is what happened - charging order 1 (14.5k) was a car loan my husband took out with Honda prior to us even meeting. The total amount of the loan was a little over 20k. Not long after we met, Aaron lost his job and had at that point paid approximately 10.5k off and I phoned on his behalf and enquired about the possibility of giving back the car and nulling the debt. Unfortunately I was wrongly advised that he couldn't and didn't have his paperwork to confirm this. By the time I read the paperwork over I saw that when the car was less than 3 years old and had less than 36000 miles on the clock he could have returned it without penalty, and at this point the car had around 39000 miles on the clock. I phoned and argued the toss but they wouldnl't have it. My husband couldnlt even afford to run the car so he put it off the road at his Mum and Dad's and told Honda to come and take it, and they just dragged their feet for another year and then collected it. The car was in great nick and had expectional mileage (after all it had been off the road for a year) and they never confirmed how much they got for it whether it was sold at auction or via a dealership. It was a very nice car and if they got less than 4k for it (and that is a VERY pessimistic estimate - it was a 2002 Civic Type-R with only 39000 miles on the clock and this was a couple of years ago). So bear all this in mind, and then look at what they're asking - 14.5k, of which the first we heard was when the land registry contacted us in December 07. I think we have every right to appeal but I'm not sure that we haven't missed the boat because of the bloody advisor at the charity; I fell so naive.

The second charging order is for a bank loan that my husband, again, took out long before he met me and I knew nothing of it until all this kicked off. With the best will in the world we can't deny he owes them it, but again the first we heard was from the land registry as they had not been writing to us. I telephone the company and told them that we hadn't heard anything prior to the interim charging order being granted and shouldn't we have been given a chance to negotiate, but she argued they had been writing to us since April 2007 at our address. I contacted the courts who told me this was utter BS as their court clerk had in fact changed the address on the case files on the 12 December 2007. I phoned them back and told them this and they would not have it. So though we can't contest the debt itself (though we've never received a breakdown) I feel they certainly went about it in an underhand way.

The crux of it all was is that the orders were granted only on my husband's share of the property - so I've been thinking, could he go bankrupt and not me?

At the moment, I just don't know what to do...we haven't got enough money coming in for a deposit anywhere if we did have to sell, and as for the selling fees, I have no idea where we'd find them, and our credit record is so bad that we'd fail on Landlord credit checks too.

I just don't know what to do and as yet I feel no further on.

If we manage to get the charging orders set aside and get them unsecured again and become bankrupt, and the rent on another suitable house would amount to the same as the mortgage and secured loan, is it sensible, or safe, to stay put? I know this is all very hypothetical, but this is what I'd like to work towards.

I probably sound mad, but if the alternative is renting in Liverpool, we'll end up somewhere awful where I certianly would not want to bring my son up and we're really part of the community where we live now...

The only light I can see at the end of the tunnel is that my husband is suing is former employer over a serious head injury he sustained at work when a colleague dropped a sheet of steel on his head in 2006 (the start of our financial worries) and that is hoped to be paid out this year in the sum of at least 15k...I know the debts will swallow this up but at least we can make offers to some creditors then.

I'm sorry for the veritable essay - and I know there are so many ifs, buts and maybes but if there's anything you can recommend beyond what you have already so kindly suggested, we would be very grateful.

Thanks again for all your responses.

Crystal

ccastley

Hiya Conor,

Bearing in mind our current financial situation private landlords would be reluctant to touch us as our credit record is obviously not too good, and prior to buying the house we rented in some truly dire areas. Where we live now isn't fantastic, but it's better than most places we would likely end up renting and we are part of the community here. In Liverpool most rented houses tend to be grouped together and there are usually serious problems in those areas, it being the ASBO generation and so on. It was fine when we weren't parents (or as fine as it can be) but now we are I want to avois it at all costs.

If it's what we have to do, then so be it but I'd rather exhaust my other options first, which I'm sure you understand.

Crystal

Bluebelle72

Just to pick out the fact that you don't think you can rent privately cos of failing checks, there are others on here who have called round estate agents and more than a couple had said that they had no problem taking on bR's as long as they put up a few months rent in advance, and also perhaps provided a guarantor, but not always both. Renting privately at least you can choose where you wish to go. HTH

tigerfeet2006

Sorry I can't help with the charges etc. not my forte I'm afraid but you have been given brilliant advice so far.

Have a read of Scarlett's thread http://forums.moneysavingexpert.com/showthread.html?t=596237

ccastley

Hi bluebelle,

As I said above, unfortunately I'm having enough difficulty getting together a deposit, never mind a few months rent and we don't have anyone who would act as guarantor, but if things get better and this is the route we have to take I will look into it further.

Thanks

Broken_hearted

Conor wrote: »

Just to add, why do you think you'll end up in a bad area if you rent? My parents and in-laws are in very nice houses far better than they could afford to buy.

Because you could be kicked out at the end of your tenancy even if you've paid on time and kept everything perfect.