Northern Rock CCJ and charging Order

[spongebob64]

Hi everyone

 

I'm new to this forum, but I hope someone can help me.

 

I have a pro-rata agreement with Northern Rock and 3 other creditors. The debt owed to Northern Rock in in the region of £10,000

 

A few months ago I rang Northern Rock to negotiate an extension to the agreement and the adviser asked if I could increase the amount I was paying. At the time I was paying £30 a month and I explained to the adviser that as I was on a pro-rata agreement I would have to review my finances and if I could increase my payments to Northern Rock that I would also need to increase my payments to my other creditors. The adviser at Northern Rock claimed that the pro rata agreement was no longer in force and I should try and increase my payments to Northern Rock.

 

After reviewing my finances and taking my other creditors into account I offered to increase my payments to £40 a month. Northern Rock have refused my offer and are taking me to court to obtain a CCJ and a charging order.

 

Please can someone advise me how to proceed. I believe I have acted reasonably and fail to understand how Northern Rock can accept my original offer of £30 a month, but refuse an increase to £40 a month. I would also like to avoid the charging order if possible as I have 4 young children, all 7 and under, one of which is autistic and we may need to move in the near future. I have kept up with the payments and have continued to make payments while the dispute has been going on.

 

Any help would be appreciated.

 

Thanks

 

Spongebob64

[paulwlton]

Firstly, is the debt a loan agreement, secondly have they started legal action.

[spongebob64]

Yes, the debt is for a loan agreement and yes they are taking me to court. I've tried negotiating with them but they don't seem interested and I fail to understand why they can accept a reduced payment of £30 a month, but take me to court when I offer to increase it.

[paulwlton]

Do not offer any more than what you can afford, if the creditor obtains the CCJ make sure you send a budget sheet into court with your offer of payment.

 

The creditor cannot enforce a judgment with a charging order if you keep upto date with instalments set by the court.

 

In the meantime i would CCA them.

 

Paul

[spongebob64]

I've offered what I can afford and sent a SOA to them. When I originally spoke to the adviser I got the impression that if I'd offered the increase there and then they probably would have accepted it. Instead I went away, took my other creditors into account, made the offer in writing and ended up in court.

[powelll]

Could a mod move this to a new thread pleasse?

 

Meantime I will advise as best I can.

 

An unsecured loan is just that - unsecured. But if you do not keep up payments as laid out in your original agreement then under CCA rules ( if it's CCA regulated - most loans under £25k will be covered ) the creditor must issue a default notice which advises you that you are in default of the original agreement ie by not paying. It also advises what you need to do to remedy this ie pay the arrears. You are usually given either 7 or 14 days to do this ( depending on when the agreement was taken out.

 

If you do not pay the arrears the creditor has the right to pursue you for this money through the county court. If you don't have a defence to the claim ie you do owe the money then you would usually make an offer of payment based on what you can afford after essential bills etc are covered. If the creditor refuses this offer it's up to the court to decide what they feel is reasonable.

 

So if you offer say £50 pm on a £15k debt it would take over 25 yrs to pay off ( remember statutory interest at 8% will usually be claimed as well ). The court need to weigh up your offer and circs against the creditors interests.

 

If you get a CCJ and pay as ordered then no enforcement action can be taken. It's only once you default on a CCJ that the creditor has the option of further enforcement with includes going for a charging order.

 

But this is the same position with an individual you owe money to. So, say if I lent you £2k and we had a verbal agreement I would get it back in a few weeks and I didn't I would be entitled to take you to court. I would have to satisfy the court you owed the money but if I got a CCJ against you and you didn't pay then I as an individual could go for a charging order as well.

 

Thats why the creditors don't have to specifically highlight the fact that your home is at risk because it isn't directly at risk ie with a mortgage or other secured loan once you get to 2 months arrears they can go to court for repossession of the property.

 

It's worth bearing in mind that if you default on a CCJ and a CO is applied for then there will always be a hearing so you have the chance to argue against it. If the judge agrees that a CO is 'reasonable' and it's made final then you can ask for conditions to be added.

 

A creditor cannot repossess a property they have a charging order against. They can only apply for an Order for Sale via the court. It is VERY VERY unlikely that this would ever be granted. Judges often see it as reasonable to give a creditor security for the debt they do not want to see people on the street for an unscured debt.

 

Moorcroft are a debt collection agency. So they have no legal powers and are not bailiffs they will just chase you for money. Don'y bother speaking to them on the phone try to keep everything in writing.

 

You may benefit from getting some free advice on your whole situation from somewhere like National Debtline on freephone 0808 808 4000 as well.

 

I hope this helps to clarify some points