Charging Order on an Unenforceable Debt?? Help/advice required.

[snickers]

Hi,

A Charging Order was set against my home in late 2011 for the sum of approx 3K by HFO Capital for a Credit Card debt of £1600 (for a credit card which was allegedly taken out in 2002 and used up until early 2006).

I honestly knew nothing of the 2011 Charging Order or HFO Capital's debt proceedings for this CC debt until November this year (2013), as a result of receiving a Land Registry document as a result of trying to sell my house. I did not reside at the address where HFO Capital sent letters/charging order documents back in 2011. A paying tenant lived at the property instead and claimed Housing and Council Tax benefit for their tenancy whilst I resided 85 miles away to care for someone as their full-time, daily carer. Because I didn't live at the property, I didn't receive notification of the charging order or any HFO Capital debt documents back in 2011, I was therefore unable to contest the Charging Order or debt and the Charging Order was thus approved and applied.

As soon as I found out about the 2011 Charging Order in November of this year, I immediately contacted HFO Capital's legal representatives Turnbull Rutherford explaining I did not reside at the address they sent documentation to in 2011 and also requested information about the debt and credit agreement under Section 78 of the Consumer Credit Card. Despite sending several request letters over the past 5 weeks, they have yet to produce a reconstituted copy of the credit agreement (or any other document referred to in it). They have also not produced any documentation which proves they purchased the alleged debt from the CCC. Do they need to produce this?

I also requested information under Section 78 of the Consumer Credit Act from the credit card company directly.
They replied with a photocopy of a small 1-page signed credit card application leaflet and a 'reconstituted copy' of the CCA. The signed application form is not 100% eligible. However, the CCC said in an accompanying letter they are: "currently unable to provide a copy of the terms of your credit agreement as varied in accordance with section 82(1) of the Act. We accept that we are therefore prevented from enforcing our agreement with you while this state of affairs continues. Notwithstanding that we cannot currently enforce the agreement, our rights continue to exist under the agreement. You should therefore continue to pay the debt that has accrued on your account. We can and will continue to take any action short of enforcement."

If I had known about the Charging Order back in 2011, I would have contested it, asked for all of the CCA documentation and would have asked the court to consider a monthly repayment plan instead. I would never have wanted a Charging Order to be set against my home!

To date, HFO Capital Limited/Turnbull Rutherford have failed to provide any of the CCA documents requested. I have not taken responsibility for the CC debt or made any instalment payments to either HFO Capital or the CC company. To date, I have merely confirmed to both parties that I didn't receive any Charging Order court documents and made a request for information under Section 78 of the Consumer Credit Act 1974.

Is a Charging Order an 'enforced' method of debt recovery? If so, is this debt and Charging Order unenforceable? If the credit card company say they are "prevented from enforcing the agreement" - where do I stand legally with HFO Capital/Turnbull Rutherford in regards to the CC debt and the Charging Order they've secured against my home?

I don't know where I stand or what I can do next. HFO Capital's legal reps Turnbull Rutherford are not being very helpful!! Ideally I'd like to get the Charging Order set aside... Any advice would be greatly appreciated about where I stand legally.

Thank you so much!

[Spent2much]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

I think once a charge is on your property there is no going back, and even if it is UE the charge is now on there and stays until you pay it off.

Yours might be different as you were not resident but I wonder if because it was your registered address ? then they will say the were correct in sending the information to that address unless you notified the post office to redirect your mail .

I might be wrong so don't take my word for it .

[Undercover Elsa]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

I'll leave a message for ATW our Legal Expert to take a look at your thread, Snickers. Obviously due to the holiday season it may not be immediate so please bear with us

Elsa x

[Never-In-Doubt]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

I'll ask Andrew to look in and see what he says.

[PlanB]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

A Charging Order was set against my home in late 2011 for the sum of approx 3K by HFO Capital for a Credit Card debt of £1600 (for a credit card which was allegedly taken out in 2002 and used up until early 2006).

I honestly knew nothing of the 2011 Charging Order or HFO Capital's debt proceedings for this CC debt until November this year (2013), as a result of receiving a Land Registry document as a result of trying to sell my house. I did not reside at the address where HFO Capital sent letters/charging order documents back in 2011. . . . . Because I didn't live at the property, I didn't receive notification of the charging order or any HFO Capital debt documents back in 2011, I was therefore unable to contest the Charging Order or debt and the Charging Order was thus approved and applied.

. . . I also requested information under Section 78 of the Consumer Credit Act from the credit card company directly.
They replied with a photocopy of a small 1-page signed credit card application leaflet and a 'reconstituted copy' of the CCA. The signed application form is not 100% eligible. However, the CCC said in an accompanying letter they are: "currently unable to provide a copy of the terms of your credit agreement as varied in accordance with section 82(1) of the Act. We accept that we are therefore prevented from enforcing our agreement with you while this state of affairs continues. Notwithstanding that we cannot currently enforce the agreement, our rights continue to exist under the agreement. You should therefore continue to pay the debt that has accrued on your account. We can and will continue to take any action short of enforcement."

Hello Snickers and to AAD

If you are successful in getting the original CCJ set aside then the Charging Order should be removed automatically. No one can have a charge over a property for a debt which doesn't exist. To get the CCJ set aside you would have to prove to the court that you didn't get the original county court summons so were denied the opportunity to file your Defence. You would also have to prove to the court that you would have had a reasonable chance of winning the case if you had filed your Defence. I think that letter from HFO Capital which admits that they can't comply with your section 78 request and also admits that they accept it is unenforceable in court is helpful to say the least.

However, you may also need to prove to the court that HFO Capital would have known that you were not living at that property when they served the papers. Ideally you should have sent them a change of address when you moved out and let the property. It may depend on what happened prior to 2011. When was the last time you heard from them before that date and what did the correspondence say at that point. If you were given the impression that the creditor wasn't going to pursue the debt then you may be forgiven for not telling them how to pursue you with a change of address.

So post up a bit more background to help Andrew when he reads this. When did you last pay anything to the account (and so lost touch with the creditor) and when did you last receive any communication from the creditor and what did it say? How long before 2011 did you move out of the property?

[PlanB]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

I honestly knew nothing of the 2011 Charging Order or HFO Capital's debt proceedings for this CC debt until November this year (2013), as a result of receiving a Land Registry document as a result of trying to sell my house.

. . . . Is a Charging Order an 'enforced' method of debt recovery? If so, is this debt and Charging Order unenforceable? If the credit card company say they are "prevented from enforcing the agreement"

Has the sale of your house fallen through or are you seeking to get this problem sorted so the sale can proceed? The process for getting a set aside is not quick. If there's a house sale at risk and you're losing rent from your tenant (if they've moved out prior to the imminent sale) then you may want to consider a deal with the creditor based on the pressure of a potential set aside hearing and the costs involved which they may not get to recover. You will need to ask Andrew's advice on litigation vs settlement if the loss of your house sale outweighs the gain of not paying a £3k CCJ.

When the creditor admitted the credit card account was "unenforceable" they meant that they would be unable to get a judgment in the county court due to non compliance with section 78. But that's now water under the bridge since they already have the CCJ in the bag.

A creditor can seek an Order for Sale on the basis of a Charging Order but it's rare. Is the house in your sole name?

Has there been no attempt by the creditor to recover the sum due under the CCJ since 2011? I presume your tenant has not been forwarding your mail which hasn't helped matters.

[snickers]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

Hi everyone,

Thank you for the welcome. Glad to be here! And thank you all for the advice so far.

I only lived away from the property for a year. I couldn't afford the daily travel in and out of London to fulfil my full-time carer duties, so the person I cared for said I could stay with them to save on travel time and expense. I then had a tenant stay in my property for the duration. I didn't bother having my mail forwarded because I wasn't receiving much at the time. Just utility bills.. And the utility bills (council tax and electric) were changed over to the tenant, so I saw no need to get a mail re-direct.
I never received any documents from HFO Capital for the duration of the time I lived away, including the Charging Order court documents or any CCJ ones. The HFO Capital letters would have been sent in my married surname (as the Charging Order is in that name) and the tenant only knew me under my maiden surname (as I got divorced), so I'm presuming she wouldn't have known the letters were for me! That's the only reason I can think of as to why she didn't keep the letters for me, as she did keep letters in my maiden name. If I had received any documents from HFO Capital, I would have certainly replied - especially to a Charging Order or CCJ letter. I'm still in touch with the tenant and I'm sure she'd provide a statement if you think that would help matters? Is it worth contacting HFO Capital and sending them evidence of all of this? or should I keep this tenancy matter proof to myself in case there's anything legal I can do?

I am the sole owner of the property.
I recently had an interested buyer for it and the Charging Order put them off. Even though I know a CO doesn't affect buyers, it seems some people are concerned about CO on property they're interested in purchasing. Very frustrating!

How can I go about getting a CCJ removed? Any advice?

The creditor hasn't made any attempt to recover the debt since the Charging Order was granted in 2011. I stopped using the credit card in early 2006 due to losing my job. I was in severe debt, on Jobseekers Allowance and stopped making payments eventually. I've not made any payments to the card/debt since late 2006. The DCA just offered me a settlement figure of £1300 (after I contacted them about the CO) if I paid it in full by the end of January but I'm on a low income (Carer's Allowance) and can't raise that amount by then. Seeing as HFO Capital offered me this reduced settlement figure, do you think it's because they know they don't have the CCA and not a strong case? The credit card company also offered me the chance to make payments direct to them. Is this allowed considering they sold the debt to HFO Capital? I'm happy to make payments towards clearing the debt but want to know if it's wise to do that in light of them not having a CCA?

Thanks for all your advice with this :-)

[PlanB]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

I am the sole owner of the property. I recently had an interested buyer for it and the Charging Order put them off. Even though I know a CO doesn't affect buyers, it seems some people are concerned about CO on property they're interested in purchasing.


. . . The DCA just offered me a settlement figure of £1300 (after I contacted them about the CO) if I paid it in full by the end of January but I'm on a low income (Carer's Allowance) and can't raise that amount by then. Seeing as HFO Capital offered me this reduced settlement figure . . . . . The credit card company also offered me the chance to make payments direct to them. Is this allowed considering they sold the debt to HFO Capital? I'm happy to make payments towards clearing the debt but want to know if it's wise to do

Andrew will tell you what's wise to do

Are you selling your house because you want to or are you selling it under pressure from other creditors which is something else we may be able to help you with? Would you prefer to stay in your home if we could sort out this situation for you? Selling a property is a big step. Do you have an unmanageable mortgage on the house or was it part of a clean break divorce settlement? A Carer's Allowance isn't great money

[ATW]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

It sounds like they have judgment in default because you didn't reply to the claim form. You are in an odd position because you now potentially have a defence that you didn't have when the judgment was entered against you. Your defence has come to life as a result of the s78 CCA request that you have done. It didn't exist at the time that judgment was entered as the request had not been made at that stage. Time is not on your side here. The judgment is around 2 years old so going to court asking for it to be reconsidered will be an uphill task and I expect that faced with such an application HFO will put a bit more effort into finding the paperwork that they need. Its a Small Claims Track judgment so you will have to pay legal fees as they cant be recovered from an opponent in that track. The financial risk is pretty big I reckon and the prospects are shaky and changeable- they can have several goes at finding the right bits of paper. It might well be quicker and cheaper to make a short settlement offer so you are free of this.

[snickers]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

Hi PlanB,
I'm selling because I want to... It's too difficult keeping up with a mortgage and running costs of a 4-bedroom house! I'd prefer to sell, downsize and start afresh. Selling the house will allow me to clear old debts and pay for some private medical treatment which I need (and can't get on the NHS!). So I'm happy to sell.

[snickers]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

Hi ATW,

Thanks so much for the feedback. If I offer a short settlement, am I best doing it direct with the credit card company? Or the DCA? And what do you think would be a fair offer (the original cc debt was just under £1600, but the DCA have put a sum of 3K on the Charging Order). Do you think they'd accept a monthly repayment offer? I'm not in a financial position to make a lump sum payment because I'm on Income Support & Carer's Allowance... And should I use the facts that they can't comply with a Section 78 of the Consumer Credit Act and that I couldn't defend the CCJ or Charging Order (due to me residing elsewhere) as a reason for offering a short settlement agreement?

[PlanB]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

Selling the house will allow me to clear old debts.

Would you like us to help you get rid of those old debts so you won't have to pay them out of the proceeds of the sale Your credit rating is already shot to pieces if you've got a CCJ so no harm in looking into unenforceability on the other debts. Were any of them started before April 2007?

[Never-In-Doubt]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

Hi ATW,

Thanks so much for the feedback. If I offer a short settlement, am I best doing it direct with the credit card company? Or the DCA? And what do you think would be a fair offer (the original cc debt was just under £1600, but the DCA have put a sum of 3K on the Charging Order). Do you think they'd accept a monthly repayment offer? I'm not in a financial position to make a lump sum payment because I'm on Income Support & Carer's Allowance... And should I use the facts that they can't comply with a Section 78 of the Consumer Credit Act and that I couldn't defend the CCJ or Charging Order (due to me residing elsewhere) as a reason for offering a short settlement agreement?

The original creditor won't take an offer as they will see it as having a judgment hence 100% return? That said, chances are it was sold to a DCA so best to check who it is that writes to you about this debt and then make an offer to them using our template - http://www.all-about-debt.co.uk/old/...egal-f-f-offer

However bear in mind once they have judgment you don't have anything to play with, they will only accept an offer if they want to - forget the old CCA arguments, they already have judgment so you cannot argue much at all cos they'll just say "well why didn't you defend the claim then?".... So based on what you've said it might be worth trying to get a £1600 settlement based on that being the original debt - I'd not go lower as they'll likely just say no.....

[snickers]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

PlanB,
Yes, I would love that! I'm eager to sort my debts asap. It's very stressful. Most of the the debts are from after April 2007. How do I go about getting your help?

One point I'd love to quickly query is another Charging Order/enforced debt matter. I actually have some council tax arrears of approx £2000 from late 2011-present date. I have a court hearing next week for a Charging Order application for that.
I was on very low income and in debt when the council tax arrears built up but wasn't aware I could claim council tax support at the time. (I just buried my head in the sand and ignored the bills, which was stupid).
Now I've found out I do qualify for CT support, it seems I can only back-date CT support for 6 months, so can't get a reduction on the majority of the arrears and am stuck with the debt for the council tax full amount.

Also, the council tax arrears was for a joint liability bill but the council's Charging Order is in my sole name (the joint liable person is not on my mortgage deeds or my husband). The other person who is jointly liable wants to pay their share of the CT joint liability arrears by a monthly plan (they don't want their share of the debt secured against my home as they believe it's unfair for me to incur the debt solely when it's a joint bill to be paid by us both). They're prepared to write a letter to the judge about this. They have also contacted the council but are awaiting a response. Is it likely the Judge will agree to a monthly payment for them? Or will the judge just put the full amount on the Charging Order in my sole name, even though the other person takes responsibility for their share of the joint liability bill - seeing as CT is severally liable?
I really don't want a Charging Order set against my home for the council tax arrears but I presume it's too late to do anything now, as it's gone past the stage where I could have made a defence?
You're all so helpful on this site. Thanks again. It's truly appreciated.

[snickers]

Re: Charging Order on an Unenforceable Debt?? Help/advice required.

Hi NID,

When I contacted the DCA about the Charging Order and their lack of CCA, they responded saying they'd be prepared to accept a reduced settlement sum of £1300 if I paid by the end of January 2014. I can't raise that amount of money in one month, so can't accept their offer sadly. Do you think it's worth getting a solicitor to send them a one-off letter with a settlement offer of £1300 payable by instalments in return for setting aside the Charging Order and halting interest? Or is it likely they just say no because they have 3K secured against my home and will only want lump sum of some kind?