When is a Charging Order not a Charging Order?

[calamity jane]

Apparently when it's a Restriction Order.


Found a link OTR to a thread on MSE which states that if a property is jointly owned, a creditor can only obtain a Charging Order if the debt is in both names. If the debt is owed by only one of the joint owners, they can only obtain a Restriction Order on the property. This means that on selling the property, there is no obligation for you to pay any of the proceeds to the creditor.

Is this correct?

http://forums.moneysavingexpert.com/...html?t=1839539




CJ

[shas]

Re: When is a Charging Order not a Charging Order?

Thats interesting.
I have 3 charging orders on my house....3 debts in my name. The mortgage is in joint names but the ex has signed the equity over to me so im guessing the charging orders in my case are on the equity because i dont own all of the property :-/

[Amethyst]

Re: When is a Charging Order not a Charging Order?

I think this only applies where joint owners are tenants in common rather than beneficial joint tenants. Tenants in common own specific shares in the property and charges/restrictions can be put over just their share of the property. Beneficial joint tenants (BJT's) act as a whole.
Things changed a bit in Nov 08 I think.

[Kafka]

Re: When is a Charging Order not a Charging Order?

Apparently when it's a Restriction Order.

Found a link OTR to a thread on MSE which states that if a property is jointly owned, a creditor can only obtain a Charging Order if the debt is in both names. If the debt is owed by only one of the joint owners, they can only obtain a Restriction Order on the property. This means that on selling the property, there is no obligation for you to pay any of the proceeds to the creditor.

Is this correct?

http://forums.moneysavingexpert.com/...html?t=1839539

CJ

This not correct and courts casually grant COs for unsecured debt if you don't know how to fight them (it happened to me 4 years ago).

However, particularly where the property providing the security is jointly owned, a court would be very unlikely to grant an Order of Sale, because that would unfairly disadvantage someone who had no part in the debt. The DJ at the time told me that the only couple of occasions where he had ever granted Orders of Sale were ones where the debtor had sat in court and totally refused to repay the debt.

[calamity jane]

Re: When is a Charging Order not a Charging Order?

I think this only applies where joint owners are tenants in common rather than beneficial joint tenants. Tenants in common own specific shares in the property and charges/restrictions can be put over just their share of the property. Beneficial joint tenants (BJT's) act as a whole.
Things changed a bit in Nov 08 I think.

This not correct and courts casually grant COs for unsecured debt if you don't know how to fight them (it happened to me 4 years ago).

However, particularly where the property providing the security is jointly owned, a court would be very unlikely to grant an Order of Sale, because that would unfairly disadvantage someone who had no part in the debt. The DJ at the time told me that the only couple of occasions where he had ever granted Orders of Sale were ones where the debtor had sat in court and totally refused to repay the debt.

Thought it was to good to be true.

Ah well we can but dream.(Would have been nice to have sold up and turned to a certain Building Society and told them they'd have to wait to get their mitts on our money)

CJ

[hollyb]

Re: When is a Charging Order not a Charging Order?

Are you saying therefore that a charging order, whilst it only applies to one party could result in al the equity of both parties going to pay the debt on a sale?

[Amethyst]

Re: When is a Charging Order not a Charging Order?

Yes. I have a CO on a debt which was solely in my name. The house is owned jointly and the CO will come off the equity. The original debt was built up whilst I was with my husband and we considered all debts to be both of ours. He might make an issue of it when he sells the house and splits the equity (as we're now seperated) in which case its negotiation time, but legally its correctly applied against the house and its up to us to split the rest.

In other joint ownerships of property where you arent a financially tied couple or something then you should have the property registered as tenants in common so each part of the value is your own and any debtscan only be charged against each individuals part of the property.


This is what the insolvency service say on the issue

The house is in joint names but the debt is in my name

If the debt is in your sole name, but you own the house in joint names with someone else, they have the right to tell the court all the circumstances and why they would suffer hardship if a charging order is made. They should have been sent a copy of the interim charging order and given an opportunity to go to the hearing to put their points. For example:

• Who paid for the deposit to buy the home?
• Who has made the mortgage payments since?
• If there are children at home, ask the court to put a condition that the house cannot be sold by the creditor until the children have grown up.
• The co-owner will need to file and serve written evidence of their objections at least 7 days before the hearing.

If a charging order is made by the court, then it will only apply to your share of the property.



.

[maruvian]

Re: When is a Charging Order not a Charging Order?

Found this contains some useful info.

[calamity jane]

Re: When is a Charging Order not a Charging Order?

Found this about changes to The Land Registration Act 2002 and the Land Registration Regulations 2003


http://www.bllaw.co.uk/pdf/financean...20property.pdf



CJ

[cadbury1879]

Re: When is a Charging Order not a Charging Order?

Have a look at this from hmrc the goverment.
Jointly owned property
It is not possible to register a charging order as an ‘equitable charge’ on a jointly owned property unless all the owners / registered proprietors are judgment debtors. Where only one of the owners / registered proprietors is the judgment debtor, the order will be registered as a ‘restriction’.
Agreed notices or restrictions
Since the Land Registry Rules 2003 took effect in October 2003, a charging order is registered as either an ‘agreed notice’ (shown on the register as an ‘equitable charge’) or a ‘restriction’. Prior to October 2003 where only one of the owners / registered proprietors was the judgment debtor, the order was registered as a ‘caution’. A caution served much the same purpose as a restriction. Any cautions registered before October 2003 will remain on the register.
A notice or restriction does not impose an obligation to make payment when the property is sold. However if the judgment debtor (or any one of the co-proprietors) attempts to dispose of the property, the District Land Registry will advise the claimant of the interest in the property. Prospective purchasers will be wary of buying a property subject to a notice or restriction and, more often than not, will want the notice or restriction removed before completing the sale. This is normally sufficient incentive for the judgment debtor to pay the judgment debt. Even where they do not do so voluntarily, the fact that they have received money and have failed to pay the judgment debt is valuable evidence in support of a request for a judgment summons.
Do not agree to have the notice or restriction removed until the judgment debt has been paid.
Top of page

Use of charging order in the longer term
A charging order on property protects a debt in the longer term. It rarely secures early payment unless the property is sold in the immediate future. You should only consider a charging order if other enforcement methods would not be effective.
Do not discount a charging order because of the lack of, or even negative, equity in the property when you consider the matter, because the equity position will usually improve with time.

[Ihaterbs]

Re: When is a Charging Order not a Charging Order?

Have a look at this from hmrc the goverment.
Jointly owned property
It is not possible to register a charging order as an ‘equitable charge’ on a jointly owned property unless all the owners / registered proprietors are judgment debtors. Where only one of the owners / registered proprietors is the judgment debtor, the order will be registered as a ‘restriction’.
Agreed notices or restrictions
Since the Land Registry Rules 2003 took effect in October 2003, a charging order is registered as either an ‘agreed notice’ (shown on the register as an ‘equitable charge’) or a ‘restriction’. Prior to October 2003 where only one of the owners / registered proprietors was the judgment debtor, the order was registered as a ‘caution’. A caution served much the same purpose as a restriction. Any cautions registered before October 2003 will remain on the register.
A notice or restriction does not impose an obligation to make payment when the property is sold. However if the judgment debtor (or any one of the co-proprietors) attempts to dispose of the property, the District Land Registry will advise the claimant of the interest in the property. Prospective purchasers will be wary of buying a property subject to a notice or restriction and, more often than not, will want the notice or restriction removed before completing the sale. This is normally sufficient incentive for the judgment debtor to pay the judgment debt. Even where they do not do so voluntarily, the fact that they have received money and have failed to pay the judgment debt is valuable evidence in support of a request for a judgment summons.
Do not agree to have the notice or restriction removed until the judgment debt has been paid.
Top of page

Use of charging order in the longer term
A charging order on property protects a debt in the longer term. It rarely secures early payment unless the property is sold in the immediate future. You should only consider a charging order if other enforcement methods would not be effective.
Do not discount a charging order because of the lack of, or even negative, equity in the property when you consider the matter, because the equity position will usually improve with time.

Is there a link to this?

[cadbury1879]

Re: When is a Charging Order not a Charging Order?

HM Revenue Customs: Error page could not be found -
here's the link

[cadbury1879]

Re: When is a Charging Order not a Charging Order?

Tried copy and pasting link , obviously didn't work.
Google Charging orders restrictions and it's easy to find
As is Charging orders the myth.