[ Post New Message | Post Reply to this One | Send Private Email to M Amos | Help ]

Response to Charge on new house

from M Amos (idgroms@hotmail.com)
Jeanie,

You may find the following advice from a very kind solicitor of interest....

"Yes, the court can make a charging order in respect of a CCJ owed by one of two joint owners of a house. An order for sale can be applied for under s14 Trusts of Land and Appointment of Trustees Act 1996. In relation to this, under s15 TLATA, the court has discretion to balance the competing interest of a creditor with a CO on one hand and families and occupiers on the other. The court has more flexibility than if an order for sale is applied for in respect of a debtor who is the sole owner of the charged property.

It is worth noting that the White Book ('Civil Procedure') states that: "It is one thing to make a charging order giving security to the judgment creditor and quite another to order a sale of the judgment debtor's property. Just as the court has a discretion whether or not to make a charging order so it has discretion to order the sale. It would be an extreme sanction and all circumstances would have to be considered... To order sale is a draconian step to satisfy a simple debt and is likely to be ordered only in the case of the debtor's contumelious ('insolent, disgraceful, scornful') neglect or refusal to pay. Even where a sale is ordered the court could suspend* the on terms of payment by instalments" (Civil Practice 1993, pp1499 @73.10).

In one recent case the judge adjourned the order for sale application on the payment of instalments (which is better than suspending it on instalments)

Once a charging order has been made, the court may be more likely to consider an instalment where the creditor has real security (i.e. there is plenty of equity) but some return will be expected for the creditor. Ideally, the instalment should at least cover any interest that is accruing (statutory interest is currently 8%).

If the debtor cannot get the creditor's or the court's agreement to an affordable instalment, there is a real possibility that an order for sale will be made. A number of people have dealt with this situation by remortgaging to clear the CCJ but this is not always practical or possible.

Good legal advice is needed here. Relevant cases include: Bank of Ireland Home Mortgages Limited v Bell and Bell, Court of Appeal, 4th December 2000; The Mortgage Corporation v Lewis Silkin and another and The Mortgage Corporation v Shaire, 2 F.C.R. 2000 (both cases heard together). These cases should be available on the Court Service website. (If you want these cases but can't obtain them from the aforementioned site, please contact me, I may be able to get them. (Mark Amos))

I want to emphasize once again that, ideally, good legal advice is needed, as the law is far from simple, although in practice it is probably not a good idea to try to argue case law unless one has a very competent solicitor or barrister."

Jeanie, the only other thing that I can add is that I think you should still try and put the lender to strict proof of the debt.

It's a lousy situation, I know, and I wish you the very best of luck.

Mark.

(posted 7286 days ago)

[ Previous | Next ]