Threshold introduced for charging orders

[Adinuff]

Re: Threshold introduced for charging orders

CAGNIDDY
What we all think of CAG
And more.....

Basically Niddy was doing a better job than they were doing and they didn’t like it so they banned him (as they do with most other members they find out are on here also)
So he created AAD to help people.

Hi everyone,
I get the picture now. I'm soo glad I was saved from CAG by one of our members. Was getting contrasting advice and sometimes no advice. You would think CAG would look after there valued members not ban them. As too the charging order debate I didn't think there was threshold before and creditors and DCA's just did as they pleased. I only wish I had AAD 5 years ago when I had a charging order put on my property. Was advised by Payplan at time just too turn up and accept everything because it was my fault. At the time I was just happy not too lose my house. Just a question my wife and I are carers from my brother who has severe learning disabilities. Could we have the charging order removed because of danger of losing house and him being vulnerable?

Adinuff

[greymatter]

Re: Threshold introduced for charging orders

Signed

[SaltnVinegar]

Re: Threshold introduced for charging orders

Does this have an effect on property held in joint names I wonder? As I pointed out in another thread I have it on good authority from our solicitor (recently moved house) that its is not possible. They can only obtaina restriction which ain't worth jack shite.

As far as I'm aware as soon as the interim Charging Order is obtained it should be protected by registration at the Land Registry.

The protection offered by the registration then depends on whether the property is solely owned by the debtor or jointly owned.

If owned solely by the debtor then the Charging Order takes effect as an equitable charge over the estate and takes priority over a subsequent legal mortgage.

If, however, the property is owned jointly then the Charging Order cannot takes effect as an equitable charge over the estate but over the debtor’s beneficial interest in the property which means that it can be overreached.

In laymans terms this means, theoretically, that the property can be sold free of the Charging Order and there is very little that can be done to protect the creditor’s interest.

There is also a priority which ranks equitable charges such as Charging Orders in order of the date of creation so if you have more than one CO then the time of the Order will be relevant and first in time will rank in priority over those granted later.

Of course if you defend an application for a CO then one of the arguments should be that other creditors could be "unduly prejudiced".

There is also an interesting argument which you could use in conjunction with the "undue prejudiced" argument, relevant to this thread and the e-petition, which is could the creditor have offered or given you a secured loan when the loan was given in the first place, and, instead, offered you an unsecured loan?...........................

However.................when you sell your home you need to get a solicitor who either understands this, and will follow the process so that the creditor only gets informed of the sale when its too late.

I hear of many cases where solicitors are unaware of how it works, or perhaps are just 'anti - debtor'.

Best
SnV

[greymatter]

Re: Threshold introduced for charging orders

Hi SaltnVinegar
I have read similar,and agree.
So the bastewards have not got it all their own way.
If you have a joint property and no CCJ/CO and no mortgage,whats stopping a simple transfer to your spouse of the property.
Dont forget the loans/credit cards were taken out as Unsecured!!

[Scrappy Coco]

Re: Threshold introduced for charging orders

Evening SnV and GM

You are both correct in what you are saying. You just explained it better than me.

This should clear it all up though.

Just thought I should add this piece of information with regards to UE comments on "House Ownership" especially if it is owned in joint names.

I have had a very indepth conversation on this subject with my solicitor before the bank allowed us to port our mortgage to our New Property even with all the shit on the CF. Happy fucking days

According to my brief it is a myth that creditors can obtain CO against jointly owned propert owners.

The creditor can only get what is called a restriction which if played right see's them never getting a bloody penny out of you.

Thought this might be helpful in case Marlin try this bollocks with any of you. Then you have something to go back with and really shut them up. Jointly owned remember

The growth in personal debt, together with property prices, has meant that charging orders have become a popular debt recovery tool. A creditor obtains a judgment against a debtor and then a charging order on the debtor’s property. A number of creditors, particularly in the finance and
debt purchase sectors, having converted an unsecured debt to one with some security, sit back and wait for the debtor to pay the debt off as and when the debtor tries to sell the property. Unfortunately, sitting back and waiting for payment carries a number of risks:

A mortgagee with an earlier charge on the property might repossess and sell the property at a time when there is insufficient equity in the property to pay all or even part of the debt to the creditor.

Property prices might go down, wiping out any equity in the property. If the original judgment does not attract interest – as could be the case for debts less than £5,000 or given in proceedings relating to the Consumer Credit Act 1974 – the value of the debt will be eroded over time by inflation.

Some creditors will perhaps apply for an order to sell the property rather than wait and take the risks.
However there is another, more fundamental, risk which creditors are beginning to come across in respect of charging orders obtained after April 2003. Where a debtor owns property with another person, for example husband and wife, the debtor and the other person can, despite the charging order, easily sell the property and pay nothing to the creditor.

Before April 2003
Once a charging order was obtained against a debtor over his interest in a property, whether he owned it solely or jointly, the charging order was registered as a caution at the Land Registry. This meant that the creditor or his solicitors would get 14 days’ notice from the Land Registry that the debtor and other
owner or owners were trying to get rid of the caution, probably with the aim of selling the property.
The fact that such notice had to be given meant that a debtor knew he could not sell the property before the creditor knew about it and took steps to prevent the sale. So the debtor would usually pay the creditor before selling the property.

Cautions which were registered prior to April 2003 still remain effective and the creditor will get 14 days’ notice of any attempt to get rid of the caution.

April 2003 and afterwards
The Land Registration Act 2002 (LRA) and Land Registration Rules 2003 (LRR) introduced significant changes to land registration procedures. Cautions were no longer to be used. Instead when a creditor obtained a charging order against a debtor:

If the property was solely owned by the debtor, or all owners of the property were debtors, for example husband and wife owning the property jointly and being joint debtors, then an ‘agreed
notice’ was to be filed at the Land Registry by the creditor. Effectively this was almost as good as
having a mortgage. The debtor could not realistically sell the property without repaying the debt to the creditor.

However, if the property was jointly owned by the debtor with other nondebtors, for example husband and wife owning the property and only one of them being the actual debtor, the creditor was not entitled to enter an agreed notice. Instead the creditor could only file a ‘restriction’ at the Land Registry in the
following terms: “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 creditor...] being the person with the benefit of an interim/final charging order on the beneficial interest of [name of... debtor].”

This restriction was, and remains, practically useless.

The effect of the restriction
The debtor and his joint owner’s freedom to sell the property is not affected by such a restriction. They could sell the property as if there was no charging order against the debtor. All that was required was that the new buyers or their solicitor write to the creditor informing them that they now owned the property and then confirm to the Land Registry that they had given that notice. Then the buyers could register the property with no further complications. The creditor, who is sitting back, waiting to get paid, instead just receives a letter confirming that a sale has already taken place, typically a week or two after
the sale so there is little they can do to get the debt paid. In theory the creditor could apply for a freezing order against the debtor to try and obtain the cash from the sale proceeds. However, most creditors will
never make such an application:

The cost of applying for such a freezing order would run into thousands of pounds.
The debtor might have spent the cash from the sale of the property before the freezing order was obtained, so there is little, if anything, for the freezing order to bite on.

An effective restriction
A restriction worded as follows would provide a creditor with sufficient protection: “No disposition of the
registered estate is to be completed by registration without a certificate signed by [name the creditor with the benefit of the charging order and their address], being the person with the benefit of an interim/final charging order on the beneficial interest of [name of judgment debtor], or his solicitor that he was given written notice of the disposition at least 14 days prior to the disposition or without an order of the court which granted the interim/final charging order.”
If the wording suggested above were to be allowed, a creditor would have the right to be notified before a sale. The fact that such notice has to be given would mean that a debtor will know he cannot sell the property before the creditor finds out about the potential sale – and of course takes steps to prevent the sale until the debt is paid.
So the debtor will pay the creditor before selling the property. Perhaps at some stage, the LRA will
be amended to allow such an effectively worded restriction. In the meantime, a creditor which obtains a charging order against a debtor who owns property jointly could try to persuade the Land Registry to allow the more effectively worded restriction set out above. If that attempt fails then the creditor could apply to the court for an order that the Land Registry must allow that wording.

Application to the Land Registry
The Land Registry may approve an application to allow a restriction in non-standard wording if it appears:

That the terms of the proposed restriction are reasonable, and That applying the proposed restriction would be straightforward, and not place an unreasonable burden on him. In our view, the Land Registry should allow a restriction which actually gives some protection to creditors. However,
we have yet to make such an application and suspect that the Land Registry will not readily allow such non-standard wording.

Applications to the court
If the Land Registry refuses to allow a non-standard word restriction, then a creditor may wish to consider making an application to the court. Inevitably there are risks with this:
Creditors should bear in mind that if the application is unsuccessful then they will have wasted the costs of making the application.
So far as we can ascertain, an application along the lines suggested has not yet been made. A court may adopt a restrictive view and state that a creditor may have nothing other than the standard-worded restriction set out in the LRA.

Conclusion
The current protection afforded to creditors who have a charging order on property owned jointly by a debtor with others is useless.
Unless the creditor can persuade the Land Registry or the courts to allow a more effectively worded restriction, the creditor must look at other ways of recovering the debt.


Hope that sort of helps anyone who is worried about this sort of thing


Thanks as always

Scrappy Coco

[pompeyfaith]

Re: Threshold introduced for charging orders

Thanks Scrappy Coco very informative will now have to get my CO papers out from the land registry and check the wording as our home is jointly owned between me and the wife and her mum although she pays nothing but had to be on the mortgage as a joint owner because it was an ex council purchase using mums 60% discount.

Thank You.

[pompeyfaith]

Re: Threshold introduced for charging orders

Maybe a good idea to remove personal info then scan and upload them for the benefit of others.

Ill do that in the morning.

[greymatter]

Re: Threshold introduced for charging orders

Many thanks Scrappy Coco,most enlightening.
Our laws are at best,complicated and in many cases totally confusing,so its very much appreciated having problems such as the CO stuff being rolled out in such a clear manner.Thanks
GM

[Scrappy Coco]

Re: Threshold introduced for charging orders

Thanks Scrappy Coco very informative will now have to get my CO papers out from the land registry and check the wording as our home is jointly owned between me and the wife and her mum although she pays nothing but had to be on the mortgage as a joint owner because it was an ex council purchase using mums 60% discount.

Thank You.

No worries PF.

I hope it helps.

I had to do my homework and quickly a few months before we sold our house as I had Cabot banging on my door threatening all sorts but mainly a CO.

It started with we can send you a recon which will forefill your request. I said be my guest and accidently on purpose let slip I happened to actually have the original. Cheeky sods asked to see a copy to which I told them I'd happily show them in court.

Then I recieved a letter from the ICO slamming Barclays for failing to forefill my request and selling the account.

Cabot then backed off and I got a letter from them advising it was unrecoverable blah blah blah at a later date etc etc.

No doubt I will hear from them about 6 months from SB as its for a serious amount of money. High 5 figures so watch this space in about 18 months.

Once we had sold I spoke to our solicitor to make sure what I had investigated was true and he confirmed every word of it.

He did say that not alot of solicitors or judges are aware and it has to be pointed out in plan simple english

Thanks as always

Scrappy Coco

[Scrappy Coco]

Re: Threshold introduced for charging orders

Many thanks Scrappy Coco,most enlightening.
Our laws are at best,complicated and in many cases totally confusing,so its very much appreciated having problems such as the CO stuff being rolled out in such a clear manner.Thanks
GM

No worries. Hope it can help in some way either now or in the future.

Thanks as always

Scrappy Coco

[nanna58]

Re: Threshold introduced for charging orders

i deffo want to sign petition can you confirm that our details remain secure ?many thanx xx

[pompeyfaith]

Re: Threshold introduced for charging orders

Yes they remain secure on the .gov.uk petition site and cannot be viewed

[nanna58]

Re: Threshold introduced for charging orders

off to do it now then cheers pomp xx

[Adinuff]

Re: Threshold introduced for charging orders

Evening SnV and GM

You are both correct in what you are saying. You just explained it better than me.

This should clear it all up though.

Just thought I should add this piece of information with regards to UE comments on "House Ownership" especially if it is owned in joint names.

I have had a very indepth conversation on this subject with my solicitor before the bank allowed us to port our mortgage to our New Property even with all the shit on the CF. Happy fucking days

According to my brief it is a myth that creditors can obtain CO against jointly owned propert owners.

The creditor can only get what is called a restriction which if played right see's them never getting a bloody penny out of you.

Thought this might be helpful in case Marlin try this bollocks with any of you. Then you have something to go back with and really shut them up. Jointly owned remember

The growth in personal debt, together with property prices, has meant that charging orders have become a popular debt recovery tool. A creditor obtains a judgment against a debtor and then a charging order on the debtor’s property. A number of creditors, particularly in the finance and
debt purchase sectors, having converted an unsecured debt to one with some security, sit back and wait for the debtor to pay the debt off as and when the debtor tries to sell the property. Unfortunately, sitting back and waiting for payment carries a number of risks:

A mortgagee with an earlier charge on the property might repossess and sell the property at a time when there is insufficient equity in the property to pay all or even part of the debt to the creditor.

Property prices might go down, wiping out any equity in the property. If the original judgment does not attract interest – as could be the case for debts less than £5,000 or given in proceedings relating to the Consumer Credit Act 1974 – the value of the debt will be eroded over time by inflation.

Some creditors will perhaps apply for an order to sell the property rather than wait and take the risks.
However there is another, more fundamental, risk which creditors are beginning to come across in respect of charging orders obtained after April 2003. Where a debtor owns property with another person, for example husband and wife, the debtor and the other person can, despite the charging order, easily sell the property and pay nothing to the creditor.

Before April 2003
Once a charging order was obtained against a debtor over his interest in a property, whether he owned it solely or jointly, the charging order was registered as a caution at the Land Registry. This meant that the creditor or his solicitors would get 14 days’ notice from the Land Registry that the debtor and other
owner or owners were trying to get rid of the caution, probably with the aim of selling the property.
The fact that such notice had to be given meant that a debtor knew he could not sell the property before the creditor knew about it and took steps to prevent the sale. So the debtor would usually pay the creditor before selling the property.

Cautions which were registered prior to April 2003 still remain effective and the creditor will get 14 days’ notice of any attempt to get rid of the caution.

April 2003 and afterwards
The Land Registration Act 2002 (LRA) and Land Registration Rules 2003 (LRR) introduced significant changes to land registration procedures. Cautions were no longer to be used. Instead when a creditor obtained a charging order against a debtor:

If the property was solely owned by the debtor, or all owners of the property were debtors, for example husband and wife owning the property jointly and being joint debtors, then an ‘agreed
notice’ was to be filed at the Land Registry by the creditor. Effectively this was almost as good as
having a mortgage. The debtor could not realistically sell the property without repaying the debt to the creditor.

However, if the property was jointly owned by the debtor with other nondebtors, for example husband and wife owning the property and only one of them being the actual debtor, the creditor was not entitled to enter an agreed notice. Instead the creditor could only file a ‘restriction’ at the Land Registry in the
following terms: “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 creditor...] being the person with the benefit of an interim/final charging order on the beneficial interest of [name of... debtor].”

This restriction was, and remains, practically useless.

The effect of the restriction
The debtor and his joint owner’s freedom to sell the property is not affected by such a restriction. They could sell the property as if there was no charging order against the debtor. All that was required was that the new buyers or their solicitor write to the creditor informing them that they now owned the property and then confirm to the Land Registry that they had given that notice. Then the buyers could register the property with no further complications. The creditor, who is sitting back, waiting to get paid, instead just receives a letter confirming that a sale has already taken place, typically a week or two after
the sale so there is little they can do to get the debt paid. In theory the creditor could apply for a freezing order against the debtor to try and obtain the cash from the sale proceeds. However, most creditors will
never make such an application:

The cost of applying for such a freezing order would run into thousands of pounds.
The debtor might have spent the cash from the sale of the property before the freezing order was obtained, so there is little, if anything, for the freezing order to bite on.

An effective restriction
A restriction worded as follows would provide a creditor with sufficient protection: “No disposition of the
registered estate is to be completed by registration without a certificate signed by [name the creditor with the benefit of the charging order and their address], being the person with the benefit of an interim/final charging order on the beneficial interest of [name of judgment debtor], or his solicitor that he was given written notice of the disposition at least 14 days prior to the disposition or without an order of the court which granted the interim/final charging order.”
If the wording suggested above were to be allowed, a creditor would have the right to be notified before a sale. The fact that such notice has to be given would mean that a debtor will know he cannot sell the property before the creditor finds out about the potential sale – and of course takes steps to prevent the sale until the debt is paid.
So the debtor will pay the creditor before selling the property. Perhaps at some stage, the LRA will
be amended to allow such an effectively worded restriction. In the meantime, a creditor which obtains a charging order against a debtor who owns property jointly could try to persuade the Land Registry to allow the more effectively worded restriction set out above. If that attempt fails then the creditor could apply to the court for an order that the Land Registry must allow that wording.

Application to the Land Registry
The Land Registry may approve an application to allow a restriction in non-standard wording if it appears:

That the terms of the proposed restriction are reasonable, and That applying the proposed restriction would be straightforward, and not place an unreasonable burden on him. In our view, the Land Registry should allow a restriction which actually gives some protection to creditors. However,
we have yet to make such an application and suspect that the Land Registry will not readily allow such non-standard wording.

Applications to the court
If the Land Registry refuses to allow a non-standard word restriction, then a creditor may wish to consider making an application to the court. Inevitably there are risks with this:
Creditors should bear in mind that if the application is unsuccessful then they will have wasted the costs of making the application.
So far as we can ascertain, an application along the lines suggested has not yet been made. A court may adopt a restrictive view and state that a creditor may have nothing other than the standard-worded restriction set out in the LRA.

Conclusion
The current protection afforded to creditors who have a charging order on property owned jointly by a debtor with others is useless.
Unless the creditor can persuade the Land Registry or the courts to allow a more effectively worded restriction, the creditor must look at other ways of recovering the debt.


Hope that sort of helps anyone who is worried about this sort of thing


Thanks as always

Scrappy Coco

Holy Shmoley ,
Thx SC. That was one heck of a explanation. Still trying to digest. Im trying to upload a copy of our Land Registy title deeds and its not working. comes up with "Database error" Please refresh. try and refresh and still nothing. Anyone help please?

Adinuff

[Adinuff]

Re: Threshold introduced for charging orders

Hey SC,
just read the deeds and mine indeed says "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 HFC Bank Ltd at care of weightmans LLP being the person with the beneifit of an interim charging order on the beneficial interest of xxxxxxx xxxxxxxx xxxxxxxxxxx made by the xxxxxxxxxxx xxxxxxxxxxx Court on xxxxxxxxxxx court reference xxxxxxx" This charging order was imposed on my debt against a joint property held by my wife and i. She is not a debtor, so technically we can sell as we please and they can go xxxx themselves i take it?? This has made my day if it is the case and i have understood it right?? has come early

Adinuff