Is a Final Charging Order worth defending

[ivorbiggun]

Brief case:

 

Husband taken to court by Debt Company. CCJ obtained. Interim Charging Order obtained. House is owned by husband and wife with mortgage. Hearing date given for Final Charging Order.

 

Is it worth turning up in Court to defend it or to accept it?

 

Thanks.

[harrassed senior]

I think that those in the know would need a little more information.

 

Was the CCJ not complied with, was the debt for the CCJ ever CCA'd, Not sure about CO if in joint names.

[ivorbiggun]

I think that those in the know would need a little more information.

 

Was the CCJ not complied with, was the debt for the CCJ ever CCA'd, Not sure about CO if in joint names.

 

Hi HS,

 

The debt for the CCJ was CCA'ed but rejected by the judge who had a hissy fit.

 

The solicitors for the DCA have issued letters and documents to the wife of the husband informing her of the ICO and the FCO.

[debt4get]

as to whether the charging order is worth defending or not...have a look at this...if the house is jointly owned but the debt is only in the name of one of the owners then the charging order becomes virtually useless

http://www.bllaw.co.uk/pdf/financeandrecoveries_0806_charging%20orders%20on%20property.pdf

[ivorbiggun]

Thank you debt4get. Very interesting reading.

 

But my question is that if we did appear in Court, what would our arguments be against the FCO, if any?

[debt4get]

it depends...have you young children? is the debt totally out of proportion to what the property is worth? would it mean that other creditors would be disadvantaged? is the property in negative equity...there are many if's and but's you could try....it depends on the dj at the time etc

[ivorbiggun]

it depends...have you young children? is the debt totally out of proportion to what the property is worth? would it mean that other creditors would be disadvantaged? is the property in negative equity...there are many if's and but's you could try....it depends on the dj at the time etc

 

It's not my debt, just trying to help someone else.

 

Couple are in their mid 40's, no young children - all children are adults, no other debts so no other creditors to disadvantage, mortgage £200k I believe and my guesstimate of property value at £350k.

[debt4get]

unless you get a sympathetic dj gonna be difficult to stop final charging order....if the original ccj is being complied with then you could argue that there is no need for the charging order as the debt is being paid....but obviously without knowing all the details it is difficult to advise

[twofoot]

Needs checking out this one as I'm fairly sure they cannot get a charging order if it's defended due the the property being jointly owned. Could be wrong but certainly worth looking into. Of course if it's not defended they would get one. Suggest you look up charging orders on here.

[rebel11]

Hi ivor

 

HOW CAN I STOP A CHARGING ORDER?

 

 

The court must consider whether it is reasonable to make a charging order. Under the Charging Orders Act 1979 the court has to consider all the circumstances of the case and in particular:

• the personal circumstances of 'the debtor';
  
• whether any creditor would be 'unduly prejudiced'. This means the court has to decide if making a charging order would disadvantage other creditors.
  

The arguments you can use against the order being made will vary depending on your circumstances, whether you have any other debts, whether you have equity in your house and own your home in joint names or on your own. If you have to go to a hearing phone us for advice.

 

These are some of the factors that the court may consider.

• Does any member of your family have a disability or serious illness?
  
• If you have a number of debts and making a charging order in favour of one creditor would give them unfair priority over the other unsecured creditors. It is particularly useful if you can show you already have a payment arrangement in place with your other creditors. This would be upset by an order being made. Point out if any of the debts are larger than this debt and if any other creditors have frozen the interest.
  
• Your creditor is supposed to list all the other creditors that they are aware of in the application for an interim charging order.
  
• The court can order the interim order to be sent to the other known creditors but does not have to do this. This means that creditors who may want to object to the final charging order being made will not know about the hearing. You can raise this in your written objections and at the hearing if you think a creditor may be 'unduly prejudiced' by the charging order being made.
  
• Could the creditor have given you a secured loan when you first took out the loan? If they decided to offer an unsecured loan instead, this could be particularly relevant if you have other unsecured creditors who may be disadvantaged by a charging order being made.
  
• There are other ways the court could enforce payment of the debt. You could ask the court to make an instalment order so you make monthly payments you can afford, or an attachment of earnings order so that the instalments would come directly from your wages. This is only useful if you are employed and your employment would not be at risk.
  

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=15_charging_orders_in_the_county_court

[jimbo45]

This now depends on how much you owe.

The new Coalition Govt is thinking of changing the whole law of charging orders so that they won't work for debts of under 20,000 GBP.

 

Once a Charging order IS in place that's it -- I don't think any more charges can be added to the debt including interest etc etc, so it *could* be a decent tactic to sit it out and let the debt be eroded by inflation which is bound to rise fairly soon.

 

After a year or two you could go for a Full and Final settlement saying --they could wait another 50 years before you sell the house or they could get some money (although a lesser sum) much quicker.

 

VERY VERY FEW ORDERS FOR SALE are made these days --judges don't like this particular Back Door trick into turning "Unsecured" Loans into "Secured one's" especially for smaller amounts of money.

 

The whole use these days of Charging Orders is really overblown as the companies making them won't get any money back quickly and the weight of JUDICIAL as well as PUBLIC opinion does not like the idea that the fact that an UNSECURED loan can be turned into a SECURED one without ANY mention of this on either the application form or the CCA.

 

Cheers

jimbo

[debt4get]

even if a charging order is in force they can still apply interest believe it to be at 8% if they apply to the court at the time of the order....however as you have read from my link if the property is jointly owned then they cannot get a charging order in effect they only get a 'restriction' this can easily be circumvented if the person/s wish to sell their home simply by the solicitor informing the creditor 2 weeks after sale that the house has been sold...and the new owners are now registered as the owners

[Ford]

re interest etc see link below for eg

http://www.insolvencyhelpline.co.uk/debt_factsheets/charging_orders_in_the_county_court.php

 

If a creditor has taken the debt to the county court, they may be able to add extra interest once a charging order is made. Interest cannot be added if:

• the debt is for an agreement regulated by the Consumer Credit Act. This includes most ordinary credit agreements, including bank overdrafts.
  

..............

Edited September 21, 2010 by Ford
quote

[jimbo45]

Hi there

if the debt is for LESS than 5000 GBP then they CANNOT add interest for a Credit card or "Bank Loan".

 

The logic is that the Charging order can only demand the amount that an unsatisfied CCJ is for and for amounts of less than 5000 GBP INTEREST CANNOT BE CHARGED on a CCJ.

 

Anybody who'se got a CCJ for 5,000 GBP or less whose being charged INTEREST should get the CCJ OVERTURNED as THIS IS NOT ALLOWED.

 

Cheers

jimbo

[loanbuster]

I can assure you that Charging Orders continue to attract interest for as long as the charge is in force. This has been tested in The High Court and The Court of Appeal, and has been upheld. See ezekiel v orakpo.

 

The leading case on this topic is Ezekiel v Orakpo [1997] 1 WLR 340, which emphasised that, in seeking to enforce the charging order, the judgment creditor was not seeking to enforce a judgment – he had already done that when he got a charging order. Accordingly, the enforcement of a charging order was not affected by section 20(1) or section 24(1). If the charging order were enforced, all arrears of interest could be recovered, not merely six years’ arrears.

 

http://www.lawgazette.co.uk/in-practice/benchmarks/enforcement-charging-and-third-party-debt-orders

 

I am aware of a case at the moment where a Judgment was obtained in 1986, and enforced by way of charging order shortly after. Charging Orders are exempt from The Limitation Act as this has been held by various Courts in recent years.

 

In this case the final charge value was circa 75,000, but with HC Stat Interest of 15% to 31.03.1993, and then reducing to 8% which it still currently is, this has now escalated over 25 years to around 275,000. I know this person, it is in current litigation and he will win the case. I am 500% sure of this, as Ive been privy to this persons case.

 

You want my advice, do all you can to get it removed at whatever cost !!

 

Look at this case also, Mullhall v Yorkshire Bank Finance re life of charging orders.

Edited September 21, 2010 by loanbuster
spelling error

[Ford]

loanbuster

 

according to this link below, a cca regulated debt cannot be transferred to the HC to be enforced?

http://www.insolvencyhelpline.co.uk/debt_factsheets/dealing_with_debts_in_the_high_court.php

Edited September 21, 2010 by Ford
typo

[loanbuster]

Brief case:

 

Husband taken to court by Debt Company. CCJ obtained. Interim Charging Order obtained. House is owned by husband and wife with mortgage. Hearing date given for Final Charging Order.

 

Is it worth turning up in Court to defend it or to accept it?

 

 

 

 

 

 

 

 

 

 

Thanks.

 

 

Who is the original creditor and what was the chain of events up to now ??

[loanbuster]

loanbuster

 

according to this link below, a cca regulated debt cannot be transferred to the HC to be enforced?

http://www.insolvencyhelpline.co.uk/debt_factsheets/dealing_with_debts_in_the_high_court.php

 

I wasnt saying it was. Youve missed the point of the post Ive made.The example Ive posted is regarding whether CO's attract interest. In this example instance it is a HC case and not CC. Believe me this is fact, its one of my friends who is just about to enforce by order for sale. He has Blue Chip solicitors on it and success is beyond dispute.

[Ford]

ok, but re a cca regulated debt then! , it cannot go to the HC, and therefore cannot attract HC stat interest? so, is the 'insolvencyhelpline' correct in saying that extra interest cannot be added re a CO if debt is regulated?

Edited September 21, 2010 by Ford
typo

[Basil Fawlty]

If there is already a charge on your house from another debt, and it covers the equity, can another creditor still put on a charge, and could that second creditor apply for an order of sale, knowing all the money would go to the first creditor?

[loanbuster]

ok, but re a cca regulated debt then, it cannot go to the HC, and therefore cannot attract HC stat interest. so, is the 'insolvencyhelpline' correct in saying that extra interest cannot be added re a CO if debt is regulated?

 

Ill have a read of it and see for myself. My post was merely an example albeit in the HC. Im sure that sooner or later a posting will come along here with a CO for over 5k or HC case, which will then make that example a valid comment.

[Ford]

.......... Im sure that sooner or later a posting will come along here with a CO for over 5k......

 

you're not wrong there! see post #78 on in this thread!?

http://www.consumeractiongroup.co.uk/forum/showthread.php?272306-Need-to-get-judgment-set-aside-plus-final-charging-order-please-can-you-help&p=3128593&highlight=#post3128593

[loanbuster]

If there is already a charge on your house from another debt, and it covers the equity, can another creditor still put on a charge, and could that second creditor apply for an order of sale, knowing all the money would go to the first creditor?

 

There is no restriction on the number of charges that can be placed provided that they are all valid debts and the CO's were properly and lawfully obtained. We then go into pecking order. First mortgage company, then maybe a second mortgage charge for example, and then the other creditors in order of date of charging orders registered with LR. In effect anyone could apply to the Court for an Order for Sale, so the last man on the list would have to be absolutely sure that there was enough cash left in the pot, cos even though he instigated the sale proceedings, the other creditors would rank before him. Then of course, is the house jointly owned or solely owned by the debtor. After the mortgage is paid off (1st charge) the equity would be divided between the husband and wife, and if only one party was the charged debtor, then the creditors are only able to receive half of the equity. If the debt is joint and several, then all of the equity will go to the creditors. In the case of charging orders obtained when the property is jointly owned and only one person is the debtor, the land regsitry entry will usually be marked with the words "Caution Against Dealings", and not the word "Restriction" as is the case when there is only one proprietor to the title deed / LR entry. Im quite confident that this is how the law still is. For clarification see Charging Orders Act 1979

 

http://www.opsi.gov.uk/acts/acts1979/pdf/ukpga_19790053_en.pdf

 

Just one other thing that I will point out, a Mortgage Charges has the right to possession under the terms of the original agreement. Unlike these, Charging Orders (usually granted post - Judgment) do not have the right of possession. A creditor can only apply to the Court or an order for sale. There are many reasons why a Order application will fail, e.g. children, ageing relatives, disabilities etc etc

Edited September 21, 2010 by loanbuster

[Basil Fawlty]

Thanks for that loanbuster, very useful info. So if I owed my wife, or another family member money, they could put a charge on the house, and if that was the first charge and happened to be for the amount of my equity, nobody else would be entitled to any money, therefore an order for sale would be a waste of time.

[loanbuster]

Thanks for that loanbuster, very useful info. So if I owed my wife, or another family member money, they could put a charge on the house, and if that was the first charge and happened to be for the amount of my equity, nobody else would be entitled to any money, therefore an order for sale would be a waste of time.

 

In effect yes, but it would have to be a justifed debt. If the amount of the charge was very close to the equity value, and depending upon whether the individual circumstances meant that there were a lot of creditors sniffing about etc. It could come under concealment of assets, but the legal implications would depend on the circumstances. Any "debt" which led to the "convenient charging order" shall we call it, being made would come under scrutiny at a later date. Its a ruse and excercise that would need very cleverly concealing. Possible legal implications.