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    Charging Order? The myth
    • #1
    • 26th Jul 09, 11:28 AM
    Charging Order? The myth 26th Jul 09 at 11:28 AM
    I feel that this is so important that I thought a new thread should be made to highlight the importance of understanding the law on Charging Orders and how many people are stuck with their property in the false believe that they have had a Charging Order put on their property.

    In particular the thousands of Northern Rock customers that have had unsecured debt turned into secured debt by their tactics.

    If your property is jointly owned a creditor will not be able to obtain a CO against you, they can only get what is called a restriction.

    The laws on Restrictions are totally different to Orders, the most important being there is NO OBLIGATION for you to pay any of the proceeds of the sale to the creditor.

    However, during the whole court process you go through the reference from all parties (especially the creditor) will be to charging order and NOT to restriction. This is done in order to decieve you believing you are stuck with a CO.

    However, not all solicitors are aware of the law in this regard and it is important that you raise this point with them in the first instance before proceeding with them



    The restriction which can be entered on the register where a charging order is made against one of joint proprietors is in the following form :-
    No disposition of the registered estate is to be registered without a certificate signed by the applicant for registration or his conveyancer that written notice of the disposition was given to [name of person with the benefit of the charging order] at [address for service], being the person with the benefit of [an interim] [a final] charging order on the beneficial interest of (name of judgment debtor) made by the (name of court) on (date) (Court reference.).
    You are therefore correct in saying that when the Land Registry receives an application to register, for example a transfer, we will not ask to see the consent of the person who has the benefit of the charging order. We will only want a certificate from the applicant for registration or his conveyancer that the person who has the benefit of the charging order has been given written notice of the transfer.

    If both joint owners sell the land to a third party the restriction will be cancelled when the transfer to the purchasers is registered.

    So I hope I have provided benefit to everyone who has had a restriction entered against them (especially NORTHERN ROCK CUSTOMERS) who believe wrongly that they are Charging Orders.

    You now have the freedom to go and sell your houses with the knowledge that the vultures can do nothing

    I also think this VERY IMPORTANT point needs highlighting by the moderators as many many people are stuck with houses that they believe they cannot sell
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    • Davidallen
    • By Davidallen 21st Oct 19, 10:43 PM
    • 7 Posts
    • 0 Thanks
    Things are changing rapidly , now out of the blue they are chasing all 4 of us by serving a s268 notice on the basis of my wife's account being some form of joint account of the family. Accordingly, they are pursuing each one of us for a sum of 1m each. This was served over the weekend. Please advise. Any guidance would be appreciated as we are totally stressed as to our legal options.
    • eggbox
    • By eggbox 21st Oct 19, 10:58 PM
    • 1,506 Posts
    • 742 Thanks
    An s268 notice is more commonly known as a Statutory Demand. It's the precursor to making an application to pursue bankruptcy (as I previously warned of) if not responded to within 21 days.

    At this stage you need to consult a specialist solicitor, rather than advice from an internet forum, on how best to defend the application.
    Last edited by eggbox; 21-10-2019 at 11:07 PM.
    • elbirch
    • By elbirch 22nd Oct 19, 3:52 PM
    • 1 Posts
    • 0 Thanks
    Hi just after a bit of advice please, my husband recently received a forwith CCJ for a credit card debt we quickly submitted an N245 to pay by installments which was granted. first payment to be made by the 7th November so we haven't even missed a payment and his just received a letter from the solicitors informing him they have requested a charging order against our home. The debt is in his name only but the house is jointly owned with myself. We have 4 young children aged 3 to 11 and it is our family home.

    We have no plans to sell in the future we still have 23 years left of the mortgage and there is very little equity in the house. I know if an interim charging order is granted which it more than likely will be we have the opportunity to argue against it being made final by going to court. Would it be worth while doing so, is there anything to be gained by taking it to a hearing. We would have to arrange childminders for the children and my husband would have to take time off work loosing money to attend. I know its very unlikely we would be able to prevent it being made final but by going to court we would have the opportunity to request that they could not force sale as long as we are maintaining the agreed payments and as long as the children are in school.

    Having read through the thread though its my understanding that they could only place a restriction on my husbands share of the equity and its very unlikely they would be able to force us to sell. So would it be worth while arguing against it? or should he just leave it and continue to pay the agreed payments.
    • eggbox
    • By eggbox 22nd Oct 19, 6:42 PM
    • 1,506 Posts
    • 742 Thanks

    Firstly, since 2012 creditors are able to apply for a Charging Order immediately if they are granted a forthwith CCJ. This change, however, removed any incentive to pay the debt off in installments to avoid having a CO placed on the property.

    Secondly, it's nice that someone has actually read the thread to understand their position and you are correct in your understanding that you have virtually no chance of avoiding a CO being granted. So its not worth attending if your husband will lose money, however, you have nothing to lose by sending a letter to the hearing explaining why you have been unable to attend and requesting the CO is not granted as you have applied to pay by installments? (Don't hold your breath as the chances of it working are 99% against; but sending no letter ensures its 100% against? If you do send a letter make sure you also explain you have very little equity in the property.)

    Thirdly, you are also correct that a creditor can't proceed with an OFS whilst you are up to date with an agreed installment plan. But you should also understand that the creditor has absolutely no chance of obtaining an OFS sale even if they applied for one as your property is a family home.

    Therefore, if the repayments you have agreed put a burden on your family finances then don't hesitate to drop the repayment to just a 1 a month as there is nothing further your creditor can, or will do, to try and collect the debt. Your creditor ceased being reasonable by moving for a CO after you agreed an installment plan to repay the debt. So their is absolutely no reason for you to be reasonable with them.
    • BrunoWales
    • By BrunoWales 23rd Oct 19, 1:07 PM
    • 4 Posts
    • 1 Thanks
    Updating the thread for reference. I have just remortgaged with a type K restriction and can confirm what eggbox has stated numerous times on this thread - the restriction will need to be removed. I used monies from the remortgage for this and the conveyancing solicitors sorted out the restriction on completion.

    The restriction was in the name of the original creditor not the new owner (DCA) but this makes no difference.

    I hope this information is of use to anyone in a similar position.
    • damstac
    • By damstac 8th Nov 19, 10:38 AM
    • 2 Posts
    • 0 Thanks
    Got a charging order placed on my property for 1500 , is it worth me trying to pay this debt off quickly or does it make no difference when I pay it off? I have 8 years mortgage left and have approximately 150,000 equity and no plans to re mortgage. Also does the debt have any interest added or just stay at 1500?Thanks
    • eggbox
    • By eggbox 8th Nov 19, 2:49 PM
    • 1,506 Posts
    • 742 Thanks

    Assuming the debt is for a CCA regulated loan or credit card then no interest is allowed to be added (but you need to check as Judges often don't know this) and the following applies:

    If you are a joint owner (and the debt is only yours) then you will have a "restriction" placed on your deeds. It doesn't make any difference how quickly you choose to pay off the debt as it doesn't impact on your credit file. It will just show on your deeds until paid off or is automatically removed (as this thread explains) when you sell.

    If you are a sole owner then you should have a notice placed on your deeds which will restrict you being able to sell the property if not paid off before or during any sale. But, again, when you choose to pay off the debt is inconsequential.

    If the debt is not for a CCA regulated loan or credit card, however, then assume interest will have been added and it will, therefore, make a difference to the amount to be repaid the longer you take to pay off the debt.
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