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  • FIRST POST
    blueback
    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

    Quote:

    Restriction


    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
Page 179
    • omariqy
    • By omariqy 9th Mar 18, 9:43 AM
    • 133 Posts
    • 12 Thanks
    omariqy
    No the creditor is not a tenant in common and your Mom is entitled to be the sole owner. The debtor still only has a legal interest in the "beneficial interest" of the debtor and that will now have passed to the, legal estate, your father has left though his passing.



    You can contact the creditor at anytime to see if they are willing to accept a reduced amount to settle the debt in full and final settlement.

    Its won't be possible for the creditor to transfer the debt to another property, in your circumstances, as the debtor wouldn't be able to have an interest in the property through being deceased.
    Originally posted by eggbox
    Thank you eggbox. Is there anyway that, now my father has passed away, the debt does not need to be paid back? Or am I being unrealistic?
    • eggbox
    • By eggbox 9th Mar 18, 10:35 AM
    • 1,296 Posts
    • 662 Thanks
    eggbox
    omariqy

    You would be unrealistic to think the creditor would just drop the debt so, if that is you're intention; you need to ensure you limit the creditor being able to reclaim the money (which is what this thread is highlighting)
    • omariqy
    • By omariqy 12th Mar 18, 4:42 PM
    • 133 Posts
    • 12 Thanks
    omariqy
    omariqy

    You would be unrealistic to think the creditor would just drop the debt so, if that is you're intention; you need to ensure you limit the creditor being able to reclaim the money (which is what this thread is highlighting)
    Originally posted by eggbox
    Thanks eggbox. Sorry I need to read through the thread properly. I have read the first page and from what I can gather we can sell the property and not pay any money to the creditor? Will that be a debt on my mother then?
    • eggbox
    • By eggbox 12th Mar 18, 5:01 PM
    • 1,296 Posts
    • 662 Thanks
    eggbox
    omariqy

    This thread highlights that a CO can only be notified on the deeds of a property, that the debtor jointly owns, by way of a Restriction. As such, if the joint owners then decide to sell the property; then its possible the property can be sold without having to pay the CO debt at the point of sale.

    If that is achieved the debt will not be on you Mother as its, legally, not her debt. If your Mother received your father's share of the equity then its possible the creditor could be able to make a claim for the money owed? But it would be a very difficult and long winded process and, as such, I'd say the chances of it happening would be nearly zero.

    Especially, if the proceeds from the sale have, shall we say, gone elsewhere?
    • omariqy
    • By omariqy 15th Mar 18, 11:09 AM
    • 133 Posts
    • 12 Thanks
    omariqy
    omariqy

    This thread highlights that a CO can only be notified on the deeds of a property, that the debtor jointly owns, by way of a Restriction. As such, if the joint owners then decide to sell the property; then its possible the property can be sold without having to pay the CO debt at the point of sale.

    If that is achieved the debt will not be on you Mother as its, legally, not her debt. If your Mother received your father's share of the equity then its possible the creditor could be able to make a claim for the money owed? But it would be a very difficult and long winded process and, as such, I'd say the chances of it happening would be nearly zero.

    Especially, if the proceeds from the sale have, shall we say, gone elsewhere?
    Originally posted by eggbox
    How do I go about asking the solicitor to put the restriction in place?
    • Taylor.richard25
    • By Taylor.richard25 23rd Mar 18, 12:05 AM
    • 2 Posts
    • 0 Thanks
    Taylor.richard25
    Hi I am looking for some advice please.

    Me and my partner have been searching for help and we are coming across problems along the way.

    The situation is this;

    2005 - my partner bought a property with her ex
    2008 - They split up and agree to sell the property however the credit crunch then hit taking the property into negative equity. My partner agreed to move out and her ex agreed to pay the mortgage each month until the house came back into positive equity.
    2011 - My partner receives a call from her ex asking for help with the mortgage payments. It turns out he has been paying random small payments over the course of the two years (barely anything!) and the house was under a repossession order. My partner and I had 7 days to find money to pay off all the arrears to prevent this from happening. We agree with her ex that he would move out and would not stake a claim in the future when we came to sell.
    2018 - We now have a family and need a bigger home. When we have requested a copy of the land registry as my partner knew she had 1 debt in her sole name that became a charging restriction it turns out her ex also had x2 charging restrictions against the property we were unaware of in his sole name. We are very concerned about this as we are very much relying on the equity to be able to use it as a deposit for a bigger house. My partners ex will be cooperative in terms of signing away his equity (if there is any) however it!!!8217;s unlikely he will pay his debtors now or in the future.

    Firstly - does anyone know how we can find out how much they amount to? We need to know what we are working with here. The charging restrictions for him were registered in November 2007 & 2010.

    Secondly - based on what we have read on this forum, are we correct in thinking that we may be able to notify the debtors during the exchange and then not necessarily have to pay them (We plan to pay my partners - through negotiating a final settlement afterwards and are aware we need to be careful where the funds are placed).

    The land registry has the following wording;

    !!!8216;Restriction, 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 (details of the creditor) being the person with benefit of an interim charging order on the beneficial interest of (persons name, court, date)

    &

    !!!8216;Restriction, no disposition of the registered estate other than a disposition by the proprietor of any registered charge, registered before the entry of this restriction, 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 (details of the creditor) being the person with benefit of an interim charging order on the beneficial interest of (persons name, court, date)

    We have tried to ring so many solicitors and we are being given the same stock response on that they are not sure but it!!!8217;s likely they have to be paid. Can anyone recommend any solicitors that understand the law and what can/cannot be done to help us? We are really struggling to find someone who knows about this to help us.

    We are becoming increasingly worried that the debts are going to take all equity and more so that at any point more can be added. We have tried the mortgage company to switch his name with my own however they no longer take on new business and cannot arrange to have any changes made to the current mortgage.

    Your advice is very much appreciated.
    • eggbox
    • By eggbox 23rd Mar 18, 1:47 PM
    • 1,296 Posts
    • 662 Thanks
    eggbox
    Taylor.richards25

    Unless you are selling the property (whereby your solicitor can ask for a settlement figure) the only person who will be able to find out what is owed is the debtor?

    Switching your name for the debtor's also wouldn't affect (or remove) the validity of the Restriction which would still be registered on the deeds.

    You also won't be able to make any changes to your current mortgage without dealing with the Restrictions, either?

    But, as you have gathered there is an opportunity to sell the property without settling the debts at the time of completion as long as you have a Solicitor with the right knowledge?

    I hope to have the details of a Solicitor who understands the limitations to give out shortly but we need to see if they do help the current person they are acting for first?
    • Taylor.richard25
    • By Taylor.richard25 23rd Mar 18, 9:00 PM
    • 2 Posts
    • 0 Thanks
    Taylor.richard25
    Thank you for the reply eggbox! Yes if you can provide details of a solicitor who understands this in the future then that would be great as this seems to be the stumbling block for us at the moment.
    • simmian
    • By simmian 26th Mar 18, 4:38 PM
    • 24 Posts
    • 1 Thanks
    simmian
    Hi,

    I recently found out that I have a charging order against my property. I have a letter from HSBC saying they have sold the order to a company called Cabot. Is this allowed? What will be the consequences? Are they able to raise another CCJ another charging order. This was from debt from around 8 years ago. How can I dispute the charging order because I didn't receive any papers as I was not living at the address and I closed my account with First Direct years ago. I can only assume that it was for overdraft fees as I cannot remember having a loan with them.

    Also is it possible that I can add my wife to property deeds with this in place?
    • eggbox
    • By eggbox 26th Mar 18, 9:44 PM
    • 1,296 Posts
    • 662 Thanks
    eggbox
    simmian

    Yes it is possible to sell a debt to a third party. The CCJ is re-asigned by a Court so Cabot become the legal owner of the CCJ and therefore the beneficiary of the Charging Order. There are no other consequences you just owe the money to another creditor.

    It's not the CO you need to dispute it's the CCJ that was originally granted by the Court for the debt. A court has discretion to set aside a judgment if there is a good reason. This can include a situation where the defendant didn!!!8217;t receive the court papers, however, be aware the CCJ will be valid if sent to the last known address the claimaint had for you?

    The first step will be to make an application to have the judgment set aside. This is done on court form N244 (fee unless exempt is 255.) The application should also be supported by a witness statement.

    The court will need some explanation as to why the court papers were not received. They will also want some idea of whether or not you are likely to have a good defence to the claim? (It's no good, for example, if you have ignored letters from the creditor explaining you owe money that can easily be provided as evidence in court?)

    But if you closed the account and were unaware of any fees added after closing the account, then this should be included in the witness statement. You should also explain how the default judgment has affected you such as being unable to obtain a mortgage?

    A CO won't affect you adding your wife to the deeds.
    Last edited by eggbox; 26-03-2018 at 9:46 PM.
    • simmian
    • By simmian 28th Mar 18, 2:25 PM
    • 24 Posts
    • 1 Thanks
    simmian
    Eggbox your advice is much better than what I have got from my CAB. Do you know what actions they can take? i/e can they raise another CCJ ? Can they come to my property and recover goods?
    • eggbox
    • By eggbox 29th Mar 18, 9:05 AM
    • 1,296 Posts
    • 662 Thanks
    eggbox
    simmian

    If a creditor has a CCJ against you then they can try to enforce the CCJ, at any time, by whatever method is available to them. So its a possibility that they could apply to the Court for a "Warrant of Execution" (which allows baliffs to try and recover the debt) and also apply to the Court for an "Attachment of Earnings" (which forces your employer to deduct a weekly amount, set by the court, to pay the debt?) However, in reality, if they have a CO in place then the overhwelming evidence is the creditor has ruled out those methods as effective so don't try to enforce debts by those methods? So I wouldn't lose any sleep about them doing so.

    I'm unsure what you mean by "can they raise another CCJ" so if you can explain that, please?
    • dongagon
    • By dongagon 3rd Apr 18, 11:47 PM
    • 14 Posts
    • 1 Thanks
    dongagon
    Solicitor
    Taylor.richards25

    Unless you are selling the property (whereby your solicitor can ask for a settlement figure) the only person who will be able to find out what is owed is the debtor?

    Switching your name for the debtor's also wouldn't affect (or remove) the validity of the Restriction which would still be registered on the deeds.

    You also won't be able to make any changes to your current mortgage without dealing with the Restrictions, either?

    But, as you have gathered there is an opportunity to sell the property without settling the debts at the time of completion as long as you have a Solicitor with the right knowledge?

    I hope to have the details of a Solicitor who understands the limitations to give out shortly but we need to see if they do help the current person they are acting for first?
    Originally posted by eggbox
    Hi egg box

    Are you able to provide the solicitors details?

    Many Thanks
    • Sparkles69
    • By Sparkles69 13th Apr 18, 3:13 PM
    • 19 Posts
    • 1 Thanks
    Sparkles69
    Hi all,
    I've not been on for a while, but would just like to say that the charge on my property is for 35,000. Just remember that the creditor is usually willing to negotiate a settlement. I have had an offer of 8000, to settle the debt accepted. A lot of money, I know, but it will draw under it & I can finally move on, which is what is most important to me. Good luck to everyone else in resolving their issues, but think of negotiating, as it's an option not usually mentioned on this thread.
    S69.
    • eggbox
    • By eggbox 13th Apr 18, 3:47 PM
    • 1,296 Posts
    • 662 Thanks
    eggbox
    Sparkles 69

    Negotiating a lower settlement has been discussed on the thread (but I know its a long thread!) but its good to remind people of this.

    Most CO holders are not the original creditor as they sell off the debt to a DCA. Typically, the debt is bought for 4-10% of the debt value meaning a 35000 debt will have been bought for no more than 3500?

    So even on 8000 they make over 100% profit? So never be afraid to offer a low settlement if it helps you move on but take on board the low cost the creditor will have paid for the debt into your offer?
    • Sparkles69
    • By Sparkles69 13th Apr 18, 6:45 PM
    • 19 Posts
    • 1 Thanks
    Sparkles69
    Hi Eggbox,
    What you are doing on here is brilliant & well done. They wanted 13,500 at the start & it took hard negotiations to get to 8, which is less than a quarter of what was owed. 8k is a hell of a lot of money & I'm not enjoying handing it over, but I can now move on.
    Many thanks, Paul.
    • eggbox
    • By eggbox 13th Apr 18, 7:18 PM
    • 1,296 Posts
    • 662 Thanks
    eggbox
    Sparkles 69

    No problem and the important thing is that you can move on.
    • Slamdunk
    • By Slamdunk 16th Apr 18, 12:21 PM
    • 1 Posts
    • 0 Thanks
    Slamdunk
    congrats s69
    Congrats s69, now that the amount has been setlled has the charging order also been removed from land registry register of title? and if yes what was the process to have it removed from the title? and how long did the whole process take?
    • Sparkles69
    • By Sparkles69 18th Apr 18, 11:03 AM
    • 19 Posts
    • 1 Thanks
    Sparkles69
    Hi Slamdunk,
    I haven't made the payment yet, as I want a guy from, CAB to have a look & give me the go ahead to ensure how they have worded the e-mails, means that they will have to remove the charge. Take nothing at face value, when handing over large amounts of money. Trust only those you know you can!!! If you are going to offer a payment, start LOW & be patient let them stew before raising it.
    S69
    • eggbox
    • By eggbox 18th Apr 18, 11:43 AM
    • 1,296 Posts
    • 662 Thanks
    eggbox
    Sparkles69

    You need to ensure the payment is agreed as a "Full and Final" settlement for the debt concerned.
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