Can creditor get a Charging Order if there is no equity left?

[bob shaw]

Hi All,

 

 

I had a business back in 2007 and when it went pear shaped a lot of people helped me out on the basis that I would pay them back when I could.

 

 

Sadly things have not gone well. Bad to worse really. I have been unable to repay significantly anyone that helped me.

 

 

That apart, no one except one creditor seems to be worried about it.

 

 

This guy wants a charging order on my house. I cannot at the moment make any sensible offer of payment and I am concerned that the charging order is the first step to an order for sale.

 

 

Now there's not that much equity in my home. I could voluntarily grant my eh.. non-combative creditors a second charge collectively in the amount of the equity in the house.

 

 

My question really is... can this guy get a charging order once there's no equity or can he make other trouble for me if he can't get the charge?

 

 

Thanks,

 

 

Bob.

[dx100uk]

simply ans is yes

 

 

but he'd need a CCJ first

 

 

tell us the story bob

[bob shaw]

so he gets his CCJ... what then? He applies for bankruptcy?

[bob shaw]

Sorry I just noticed you said "simply ans is yes"

 

 

Yes to which question?

 

 

He can make more trouble

 

 

or

 

 

He can get a charging order even if there's no equity left?

 

 

 

 

Thanks,

 

 

Bob.

[AndyOrch]

https://www.nationaldebtline.org/EW/factsheets/Pages/15%20EW%20County%20court%20-%20charging%20orders/Page-03.aspx

 

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 circumstances of the person owing the debt; and whether any creditor would be ‘unduly prejudiced’. This means the court has to decide if making a charging order would disadvantage other creditors.

 

Also, if:

 

your creditor applied for the county court judgment on or after 1 October 2012;the court ordered you to pay the debt in instalments; and you are up to date with the instalments;

the court must take this into account when considering whether to make the charging order final. This means that you can argue that it would be unfair for the court to allow the creditor to get a final charging order if you have not defaulted on any instalments that the court set on the county court judgment. However, under the law, the court does not have to accept this argument and can still choose to make the charging order final.

 

The other arguments you can use against the order being made final will vary, depending on:

 

Information:

 

equity in your home'Equity' means the profit you would have left if you sold your home and paid off your mortgage and secured loans.

your own circumstances;

whether you have any other debts;

whether you have ‘equity’ in your house; and

whether you own your home in joint names or on your own.

[bob shaw]

OK, I'll take my chances with the CC. I can't see how you can get a CO on equity that's set aside against a previous CO.

 

 

So that leaves... other action... I'm thinking bankruptcy but if I have no income to speak of & no assets and I don't contest the bankruptcy he'll end up paying all the costs and won't get a penny. He could still do it out of spite I suppose...

[citizenB]

bob, if you are considering BR, then it might be worth waiting until the creditor instigates it - that way the cost of the BR will be left to them and not you.

 

Are these all business debts ?

[bob shaw]

Well, all the money was spent in the business (which is Ltd) but I wasn't thinking forward.

 

 

I didn't think it was going to fail (actually I was stiffed by my US based partner) so I borrowed the money as an individual and put it into the company.

 

 

With hindsight I should have asked people to put the money directly into the company.

 

 

I don't think my creditor can instigate a BR. It'd be foolish. With no chance of money from the house that leaves my earnings which are then split x ways between all creditors. I very much doubt his share would cover the cost of the BR.

 

 

Would a judge even grant a BR under those circumstances?