Paying off charging order/restriction & transfer of equity

[exa3z]

I agree with you - however some dca's prefer a regular monthly income stream than a lump sum - I know - daft .... yes you would likely be dead with a large whack outstanding - but it's secured on the house - so they'll get it then ( in their minds ).

Im not sure what the original debt was or who holds the judgment and charge but if it's a third party debt purchaser then I might start a settlement offer at £5400 (30%) expecting it to be negotiated up to nearer your £10k.

I don't know your other financial circumstances so if there literally are no other debts other than the mortgage stick with your direct f&f offer but ( because you mentioned making them a priority I'm guessing there are others)so if there are others do some maths to see what pro rata offers across the board using your maximum (£10k) to see how it would work out. Then, if you did have other debts you might be able to get those cleared similarly out of the same sum you were going to throw at this one. Obvs don't do anything until this one is sorted as it IS your priority but if you can show it IS a pro rata offer there's more chance of it being accepted. I hope that makes sense.

Hi @Amethyst,

Thanks again for your response. Yes, I fully understand what you're saying.

Unfortunately (or fortunately?) there are other debts yes, but they are unsecured (no charges) so they are not stopping me dealing with what I want to deal with, so I was going to deal with these in a similar fashion afterwards. Can't remember the exact details right now (at work), but i owe MBNA circa £3000, and a failed car higher purchase around £7000. I think both of these were sold to debt collection agencies.

With regards to the 18k, this is still held by NatWest, and was never sold to an agency, and is being managed by their solicitor. If you are saying there is more of a chance of me getting all of this sorted in one lump rather than deal with these (what I call, "minor" debts) later, then maybe it is in my best interest to do this?

Ideally though as you understand, I want to remortgage the property from joint names into my sole name, so i can start paying off the capital, and the restriction on the property is stopping me from doing so, so as you can appreciate, this is my absolute main priority. Apart from that, I couldn't really care less and would happily continue paying them the £50 a month!

I will update this thread with further details later on, but to answer your question, yes there are two other outstanding debts.

Many many thanks for your advice so far, it is very useful. Hopefully I can finally see light at the end of the tunnel now.

Regards,

[Amethyst]

The current outstanding balance is 18k. The original was a lot more. See the issue that I'm trying to make aware here is yes, they certainly could reject the offer and I will carry on paying them £50 a month. But the likelihood is, I would be dead before they ever get their money that way.

I agree with you - however some dca's prefer a regular monthly income stream than a lump sum - I know - daft .... yes you would likely be dead with a large whack outstanding - but it's secured on the house - so they'll get it then ( in their minds ).

Im not sure what the original debt was or who holds the judgment and charge but if it's a third party debt purchaser then I might start a settlement offer at £5400 (30%) expecting it to be negotiated up to nearer your £10k.

I don't know your other financial circumstances so if there literally are no other debts other than the mortgage stick with your direct f&f offer but ( because you mentioned making them a priority I'm guessing there are others)so if there are others do some maths to see what pro rata offers across the board using your maximum (£10k) to see how it would work out. Then, if you did have other debts you might be able to get those cleared similarly out of the same sum you were going to throw at this one. Obvs don't do anything until this one is sorted as it IS your priority but if you can show it IS a pro rata offer there's more chance of it being accepted. I hope that makes sense.

[Amethyst]

Re the credit file - no they can't add anything back but your original letter was making it a term of settlement that they mark your credit file ....

You will also make an entry on my credit reference agency file relating to the above account as having been fully satisfied and the current balance and default balance will be set to £0.00 on all credit reference agencies where my account has been recorded.

as it has fallen off already and long beyond 6 years since default there is simply nothing for them to mark as satisfied and you e basically asked them to 'make an entry' .... thus I wouldn't even mention the credit file.

[exa3z]

Hi Amethyst, many thanks for taking the time to look at this.

Just going through this, you do have the issue that there is a Court Judgment against you for the full debt, and of course that is secured by the charging order ( restriction ).....so they may be happy to keep the £50 a month steady income ( or even come back and ask to reassess your financial circumstances to increase the monthly amount ) until such time as the property is sold. I'm not sure how much you are thinking of offering, or what the current balance owed is, if it was £18k originally then should be about £12k remaining? (10 years old?) (and unless there is interest added of course).

The current outstanding balance is 18k. The original was a lot more. See the issue that I'm trying to make aware here is yes, they certainly could reject the offer and I will carry on paying them £50 a month. But the likelihood is, I would be dead before they ever get their money that way. Also like I have tried to explain in my letter, the property is mortgaged on an interest only basis, so for the foreseeable future there will be £109,000 owing on that mortgage, and unless the property value increases quite a bit (which would be their only saviour, and which is unlikely to do so), they will effectively never get their money at all. £109,000 mortgage owed. Property valued at £118,000. That means £9000 equity. The property is jointly held and the charge is against my name only, so they would have access to £4500 equity on my share. For them to get their £18,000 the property would have to increase in value by £32,000, making it market value of £145,000. There is no way on this earth that is going to happen (it's a 2 up 2 down).

For the record, I have access to circa £10,000, and I was going to offer them that in full and final settlement of the account. Understanding the above, it would be very foolish of them to decline it don't you think? Maybe I should explain exactly this in my letter?

It can't go back onto your credit file now, the default marker has long since fallen off, and the CCJ has come off the register ( still exists but doesn't affect your credit file any more ) so the last thing you want is them adding anything back to your credit file.

This is contradictory. So are they able to "add anything back" to my credit file which would negatively affect it?

I have changed it to pro-rata as well, I don't know if you do have any other debts.... and realise you are only bothered about getting this one settled off, however if the creditor thinks that your limited surprise lump sum of money is being split evenly across creditors and if they don't accept it will be simply spread out across others, they may be more inclined to accept. Again they may come back asking for a new income and expenditure sheet to potentially increase your monthly payment ( as you no longer have the other creditors to allocate payments to monthly ).

There's no right way to go about it with partial settlements I'm afraid. Your first offer is unlikely to be accepted in any event.

You may be well advised to have a chat with Stepchange or CAB on what approach they would advise you to take ( as you'd be able to discuss your overall circs and any other debts with them so they could take that into account in advising you )

Oh I took out penny v cole too - no point GIVING them an argument to use lol.

To get around that you would have to get someone else ( a third party) to make the settlement offer and make the payment, but I don't like doing that unless it is the truth as it can just come back to bite you later.







Dear Sirs

Your client: xxxxx
Account number: xxxxx
Your ref: xxxxx

I write with reference to the outstanding balance on the above account and would like to make an offer to resolve the matter.

I am in a position where I have a sum of money available which I intend to use to settle my debts on a pro-rata basis. I wish to offer the amount of £xxxxx as payment in full and final settlement of the above account. This offer is made on the clear understanding that, if accepted, neither you, nor any associate company will take any other action to enforce or pursue this debt in any way whatsoever, that I will be released from any liability and that you will notify the Land Registry that the balance on the account has been paid in full and that the restriction placed against xxaddressxxx should be removed.

May I draw to your attention that there is modest equity in the property, and the property is mortgaged on an interest only basis. Therefore the capital owed has been and will be constant for the foreseeable future. The restriction placed upon the title deeds brings the property into significant negative equity, therefore I believe it is in your best interest to consider this offer.

Payment can be made within 14 days of receiving your written acceptance of my offer detailed above.

Should you not accept I will reallocate the fund to those creditors that accept a full and final settlement offer, and my offer to you will be withdrawn, the funds will no longer be available to settle this account and I shall continue making the agreed payments of £50 per calendar month until such time as the debt is extinguished.

I look forward to your response within 14 days.

Yours faithfully,

Xxxxx

Ok that's great. I would like to iron out the above first before chucking this in the post, so any further advice you could give on the above would be very much appreciated.

Thanks,

[Amethyst]

Just going through this, you do have the issue that there is a Court Judgment against you for the full debt, and of course that is secured by the charging order ( restriction ).....so they may be happy to keep the £50 a month steady income ( or even come back and ask to reassess your financial circumstances to increase the monthly amount ) until such time as the property is sold. I'm not sure how much you are thinking of offering, or what the current balance owed is, if it was £18k originally then should be about £12k remaining? (10 years old?) (and unless there is interest added of course).

It can't go back onto your credit file now, the default marker has long since fallen off, and the CCJ has come off the register ( still exists but doesn't affect your credit file any more ) so the last thing you want is them adding anything back to your credit file.

I have changed it to pro-rata as well, I don't know if you do have any other debts.... and realise you are only bothered about getting this one settled off, however if the creditor thinks that your limited surprise lump sum of money is being split evenly across creditors and if they don't accept it will be simply spread out across others, they may be more inclined to accept. Again they may come back asking for a new income and expenditure sheet to potentially increase your monthly payment ( as you no longer have the other creditors to allocate payments to monthly ).

There's no right way to go about it with partial settlements I'm afraid. Your first offer is unlikely to be accepted in any event.

You may be well advised to have a chat with Stepchange or CAB on what approach they would advise you to take ( as you'd be able to discuss your overall circs and any other debts with them so they could take that into account in advising you )

Oh I took out penny v cole too - no point GIVING them an argument to use lol.

To get around that you would have to get someone else ( a third party) to make the settlement offer and make the payment, but I don't like doing that unless it is the truth as it can just come back to bite you later.







Dear Sirs

Your client: xxxxx
Account number: xxxxx
Your ref: xxxxx

I write with reference to the outstanding balance on the above account and would like to make an offer to resolve the matter.

I am in a position where I have a sum of money available which I intend to use to settle my debts on a pro-rata basis. I wish to offer the amount of £xxxxx as payment in full and final settlement of the above account. This offer is made on the clear understanding that, if accepted, neither you, nor any associate company will take any other action to enforce or pursue this debt in any way whatsoever, that I will be released from any liability and that you will notify the Land Registry that the balance on the account has been paid in full and that the restriction placed against xxaddressxxx should be removed.

May I draw to your attention that there is modest equity in the property, and the property is mortgaged on an interest only basis. Therefore the capital owed has been and will be constant for the foreseeable future. The restriction placed upon the title deeds brings the property into significant negative equity, therefore I believe it is in your best interest to consider this offer.

Payment can be made within 14 days of receiving your written acceptance of my offer detailed above.

Should you not accept I will reallocate the fund to those creditors that accept a full and final settlement offer, and my offer to you will be withdrawn, the funds will no longer be available to settle this account and I shall continue making the agreed payments of £50 per calendar month until such time as the debt is extinguished.

I look forward to your response within 14 days.

Yours faithfully,

Xxxxx

[Peridot]

Hi,
apologies for the delay. I have asked Amethyst to take a look at the letter. She's the guru on the debt bits and pieces. She should be along soon.

[exa3z]

Further to this, I would be grateful if your could advise me on my draft below @Peridot.



The debt is that old that is no longer appears on my credit file, therefore is it advised to include the below, seeing as it is no longer on there? Im concerned that maybe it will affect my credit rating?



Many thanks,

Anyone please?

I have been following this with interest, as stated I have a similar situation, with advice given, I now see a way forward in my case.

[exa3z]

Further to this, I would be grateful if your could advise me on my draft below @Peridot.

Dear Sirs

Your client: xxxxx
Account number: xxxxx
Your ref: xxxxx

I write with reference to the outstanding balance on the above account and would like to make an offer to resolve the matter.

I am able to raise the sum of xxxxx and I wish to offer this amount as an ex-gratia payment in full and final settlement of the account. This offer is made on the clear understanding that, if accepted, neither you, nor any associate company will take any other action to enforce or pursue this debt in any way whatsoever and that I will be released from any liability, with no reference or future ability to quote or use Penny v Cole [Pinnel 1602] in trying to recoup any written off balance.

I also request that, if accepted, you will notify the Land Registry that the balance on the account has been paid in full and that the restriction on xxxxx should be removed. You will also make an entry on my credit reference agency file relating to the above account as having been fully satisfied and the current balance and default balance will be set to £0.00 on all credit reference agencies where my account has been recorded.

May I draw to your attention that there is modest equity in the property, and the property is mortgaged on an interest only basis. Therefore the capital owed has been and will be constant for the foreseeable future. The restriction placed upon the title deeds brings the property into significant negative equity, therefore I believe it is in your best interest to consider this offer.

Payment can be made within 14 days of receiving your written agreement of this offer. I am using these funds to pay this account as a priority over other creditors, however if it's not acceptable, my offer will be withdrawn and the funds will no longer be available to settle this account.

I look forward to your response within 14 days.

Yours faithfully,

Xxxxx

The debt is that old that is no longer appears on my credit file, therefore is it advised to include the below, seeing as it is no longer on there? Im concerned that maybe it will affect my credit rating?

You will also make an entry on my credit reference agency file relating to the above account as having been fully satisfied and the current balance and default balance will be set to £0.00 on all credit reference agencies where my account has been recorded.

Many thanks,

[exa3z]

Any transfer/sale and associated mortgage is going to require the restriction removed first.

Absolutely, I am totally aware of this, hence this post.

They don't need to know what your next plan is but looking at the figures there wouldn't be sufficient to clear both the mortgage and the debt in any event.

I think I did state that i am now "in a position to sort this out" i.e. I have the cash to sort out the shortfall.

If there is insufficient funds to change mortgage or remortgage and clear the debt you may have difficulties. I would settle the debt first and have the restriction removed. The creditors have to complete a form that goes to the HM Land Registry to have the restriction removed. They often need a bit of a chase to make sure it is done, once the debt is paid off.

Ok, thanks for the heads up.

It is always worth talking to the creditor pointing out you will continue at £50 pm (they don't need to know your plans) or that you can make a full and final payment of £x.xx

I will make sure to state this in my full and final letter to them.

Hope that helps?

Absolutely! Would you mind casting a quick eye over my full and final letter to the creditor if I post it here or PM it to you when I've drafted it. It would be most helpful.

And I will make sure to update my progress on this thread as I go.

Many thanks,

[Peridot]

Hi again,
Any transfer/sale and associated mortgage is going to require the restriction removed first.

They don't need to know what your next plan is but looking at the figures there wouldn't be sufficient to clear both the mortgage and the debt in any event.

If there is insufficient funds to change mortgage or remortgage and clear the debt you may have difficulties. I would settle the debt first and have the restriction removed. The creditors have to complete a form that goes to the HM Land Registry to have the restriction removed. They often need a bit of a chase to make sure it is done, once the debt is paid off.

It is always worth talking to the creditor pointing out you will continue at £50 pm (they don't need to know your plans) or that you can make a full and final payment of £x.xx

Hope that helps?

[exa3z]

Hi all,
Sorry for delay. In my opinion you need to see how much is owed now. The restriction won't be lifted until the sum is paid is the usual course of things.
If you are also indicating that you are buying the other co-owner's share I suspect they won't have much sympathy if you don't clear the debt with them too.
Have you had confirmation from the mortgage lender that they will agree to the mortgage being transferred into your sole name?
The debt is almost a separate issue as far as getting it negotiated to a settlement is concerned. In any event even though the debt is yours without the restriction being removed and the mortgage lender's agreement to transferring to a sole person you can't really move forward. The restriction won't be removed by the creditor until it is dealt with I would suspect.
Sorry may not be as positive a response as you wanted.

Hi @Peridot,

Many thanks for taking the time to read my post and for your reply.

I believe I may have not provided enough information to begin with, so apologies, I will hopefully clear this up now.

In my opinion you need to see how much is owed now.

The current owned balance is £18,000.

The restriction won't be lifted until the sum is paid is the usual course of things.

Which is, paid off in full?

If you are also indicating that you are buying the other co-owner's share I suspect they won't have much sympathy if you don't clear the debt with them too.

Fair point, however If i deal with the debt first as a separate entity, they don't need to know that i am also planning on buying the other half of the property right?

Have you had confirmation from the mortgage lender that they will agree to the mortgage being transferred into your sole name?

Yes and No.
I spoke to my lender about this issue 3 years ago. They claim that there is no such thing as "transferring" a mortgage into a sole name. One mortgage has to be paid off and another started, effectively a remortgage. So "we" sell the house, and "I" purchase it back in my own name. As you state, yes i would need confirmation from the/a mortgage lender that they would lend me the money to purchase the property, but this is no different to me purchasing another property. Yes I have had an agreement in principle in the past, but it expired as the whole lot fell through due to the restriction being found. So I see no problems getting another offer in principle again. I think a "transfer" of ownership is only possible when no mortgage is involved, and is more of a land registry thing. However any further information on this scenario would be greatly appreciated!

The debt is almost a separate issue as far as getting it negotiated to a settlement is concerned.

This was mainly my question. Is is advised to deal with this debt first as a single entity, i.e. pay it off and have the restriction lifted off the title deeds. Is the creditor likely to accept a F&F on £18,000 if i state I may be able to raise some money to have it paid off? (yes this is todays balance and also bear in mind that this debt is nearly 10 years old, and I have been making a token payment of £50 a month towards it for this time).

In any event even though the debt is yours without the restriction being removed and the mortgage lender's agreement to transferring to a sole person you can't really move forward.

Agreed, hence this post. I am now in a position where I can raise funds to have this debt paid off and to buy the joint owners half of the property. However what I am looking for is advice on how best to go about this. Sort the debt first, or sort everything as a whole.

To put things into perspective, the property is worth £118,000. The mortgage balance is £109,000. This means there is £9000 equity in the property. This means I would need to raise £4500 to buy the second share of the property. However, the £18,000 debt secured against the property (on my half) means that effectively it is in negative equity, so without a cash injection from somewhere I have been unable to do anything about this situation at all for a very long time.

Look forward to your reply,
Many thanks.

[Peridot]

Hi all,
Sorry for delay. In my opinion you need to see how much is owed now. The restriction won't be lifted until the sum is paid is the usual course of things.
If you are also indicating that you are buying the other co-owner's share I suspect they won't have much sympathy if you don't clear the debt with them too.
Have you had confirmation from the mortgage lender that they will agree to the mortgage being transferred into your sole name?
The debt is almost a separate issue as far as getting it negotiated to a settlement is concerned. In any event even though the debt is yours without the restriction being removed and the mortgage lender's agreement to transferring to a sole person you can't really move forward. The restriction won't be removed by the creditor until it is dealt with I would suspect.
Sorry may not be as positive a response as you wanted.

I'll make sure to update my progress on this post then. It's always interesting to understand what approach others have taken and what's been successful for them.

Many many thanks.Life is a learning curve.

[MIKE770]

await Peridot to pop in and comment? seems you may have missed my point of interest regarding a safety net for you whilst a joint account?