Charge on new house

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In 1994 I moved out of the flat i shared with my ex partner with our two children. Well actually he through me out! I moved into rented accommodation and he stayed in the flat. I did go to a solicitor to ask to have the place signed over to him but never replied and I simply didn't have the money to pursue it. My rent was significantly more than the mortgage and he was earning more money but he refused to move out and I had absolutely NO IDEA that he wasn't paying the mortgage. In hindsight I was a complete fool but I was in such a state at the time. I rebuilt my life, met and married my partner and bought a house together. It turns out that he was reposessed, I had little contact with him and when I did he deliberately deceived me. Now the lenders have come after me for 28,000 and have a court date for putting a charge on our house. I was told to ignore the letters from Halliwell on behalf of Nationwide that started arriving probably a year ago or so. I have never responded to any of them. What do I do now? Do I go to court and plead my case? Will they make me sell the house. I didn't know that I had this around my neck when we applied for our mortgage 7 years ago. I'm at my wits end. The stress of it all is unbearable and the injustice is even worse.

Please HELP!

-- Jeanie Mullane (weaniemullane@aol.com), April 15, 2004

Answers

Hi Jeanie

Sorry to hear of your situation. Mine was similar.

You received bad advice if you were told to just ignore letters for the past year or so.

Given the fact that a court date is set to put a charge on your new property, the best advice I can give you is to contact IBAS (Independent Banking Advisory Service) to see if they can help you in any way. Their website is www.ibas.co.uk. They are listed on this site as being someone who can help, see Who Helps? section, and I have to say they worked wonders to resolve my shortfall.

Good Luck and best wishes.

Claire

-- claire (claire@no-spam-please.com), April 15, 2004.


GO SEE A SOLICITOR AS SOON AS POSSIBLE.

First off, they are after you for 28000 - how is that made up - can you contest it? Have they a county court judgment for the shortfall and costs etc.? Or are they just jumping the gun and going for the charge without a CCJ - the judge won't give them one automatically if you can show grounds for the amount being contested.

So far as the letters go - plead depression at the time. Go to court, armed with a solicitor if you can get one who will appear at short notice - apply for legal aid.

I am going to shout at you now:-

YOU MUST GO TO COURT - OTHERWISE THE JUDGE WILL GIVE THEM A CHARGE AUTOMATICALLY!

GET THAT APPOINTMENT BOOKED WITH YOUR SOLICITOR TODAY!

ALSO, GET IN TO THE LOCAL CAB AND TELL THEM THE STORY - SEE IF YOU CAN NEGOTIATE A LOWER SETTLEMENT FIGURE.

The finally, come back on here please and let us know how it all went off!

Best of luck

David

-- David J. Button (davidjohnbutton@supanet.com), April 16, 2004.


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.

-- M Amos (idgroms@hotmail.com), April 16, 2004.


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