Banks wants a charging order on my property

[dontletthem]

Hi everybody, my business has recently failed and I had signed a personal guarantee on the company overdraft plus used personal credit cards to keep the company going. The credit card companies have both agreed to freeze interest and accept an affordable montly payment based on my income. I've offered the same deal to the bank but they are asking for a voluntary charge on a second property I own and are charging interest at 3%. They have said that if I don't agree they will go through the courts and I will have to pay the statutory 8% interest if they win. Part of the charging order is an agreement not to force a sale as long as the agreed payments are maintained.

I'm inclined to reluctantly accept their terms but does anyone have any experience or advice they can pass on? I'm concerned that I will be giving preferetntial treatment to a creditor and that I'm turning an unsecured loan into a secured loan.

The amounts we are talking are aprox. £10k for the overdraft and £30K for the cards and the property is in my sole name and not the one I live in.

According to Business Debt Advice, the law changed in October and now charging orders are being asked for all the time and if I contested in court I would be one of the first to do so under the new law!

Any advice appreciated. Thanks.

[wales01man]

Re: Banks wants a charging order on my property

I had this when i lost a Ltd company the bank obtained a CCJ against me i could not pay so they put a second charge on our house despite me telling them it was being repossed they went ahead and got the order dated 4 days before eviction notice so they never got the money,
I wpuld say if you can agree a payment plan with them do it from experience banks will not worry about you but an agreement to pay and keeping to it would be a good defence if they tried for a CCJ

[dontletthem]

Re: Banks wants a charging order on my property

Thanks, they have agreed to my monthly payment offer it's just the charge on my house that woriies me as it makes the unsecured loan into a secured one.

[labman]

Re: Banks wants a charging order on my property

It is very common and shouldn't cause you any problems as long as you stick to the agreed repayment arrangement.

[Nikolai]

Re: Banks wants a charging order on my property

I've been in your position. It's not pleasant but with perseverance and integrity you can get through it. Banks are all the same - they want their pound of flesh, or in your case security for it.
The law was amended on 1st October this year, making it easier for creditors to get charging orders. See this link to CAB website which gives a very clear summary of the changes: http://www.adviceguide.org.uk/englan...ing_orders.htm
Don't forget if you don't agree to give a voluntary charge, the bank will have to commence a claim against you in the County Court, obtain a judgement (or CCJ), and only then can it apply to the court for a charging order. It's not an instant process for the bank, especially if you defend the proceedings, so there may be some leverage for you to negotiate with them if you are agreeing their proposals.
Why not take some advice from a professional before you agree anything - try a debt specialist from CAB for example, or maybe a solicitor. If a solicitor, get someone who knows what they're on about and try to agree a fixed fee or a reduced fee for a one-off interview.

[labman]

Re: Banks wants a charging order on my property

I've just posted on your other thread. Is it possible to keep to one thread please to avoid confusion. If any admin are around I'll see if they can be merged.

[dontletthem]

Re: Banks wants a charging order on my property

Hi, I posted on the CCA section as I had a specific question as to whether a failed business overdraft that had become the responsibility of an individual (the guarantor) would gain the CCA protection. I didn't meant to cause any confusion but I'm only a Beagle Puppy.

[labman]

Re: Banks wants a charging order on my property

No problem, and I'm no different just cos I've been here longer lol! Just trying to help you get as much advice and help as possible! :beagle:

[dontletthem]

Re: Banks wants a charging order on my property

Thanks. I had a look at the document you posted on my other post and I read that the signature on a Guarantee agreement needs to have been witnessed and mine was not. However, the document you posted me to is Malaysian. Do you think it applies to UK guarantees too?

[labman]

Re: Banks wants a charging order on my property

However, the document you posted me to is Malaysian. Do you think it applies to UK guarantees too?

PMSL!!!!! What the ***** did I think I was doing? Sorry! :lol::mmph::mmph:


I think the bank is being reasonable, and post judgment interest could, I believe, be charged at 8%.

[IanM]

Re: Banks wants a charging order on my property

I've offered the same deal to the bank but they are asking for a voluntary charge on a second property I own and are charging interest at 3%. They have said that if I don't agree they will go through the courts and I will have to pay the statutory 8% interest if they win. Part of the charging order is an agreement not to force a sale as long as the agreed payments are maintained.


If the bank was happy to accept your signature as personal guarantor for your business debts without asking for any security at the time of signing i would be very wary of agreeing to anything at the moment.

First off i would ask them to put their proposal in writing including the bit about taking you to court and asking for a different interest rate, from 3% to 8%, if they have to do that to enforce a charging order because you refuse to voluntarily sign the order and you could argue in court that they are blackmailing you into agreeing the charging order under the threat of paying more even though they did not ask for security at the time of agreeing to allow the overdrafts on your personal guarantee even though the Ltd company no longer exists.

The part of the charging order where they say payments must be maintained to stop them enforcing a sale is almost the same as having a suspended possession order on a secured mortgage so i wouldn't agree to that personally just in case something unexpected happened and you missed a couple of payments, you never know!

This letter will be important for your defense if they take you to court and you may find they will not write it but even so you must already have something in writing from them agreeing to accept 3% so that may be enough to keep the interest at 3% even if you do go to court.

Tell them they have to accept your offer without you agreeing to a charging order or you will take your chances in court.

Contest the charging order, be the first!

[IanM]

Re: Banks wants a charging order on my property

"""extortion"""

noun (Concise Encyclopedia)

[[[Unlawful exaction of money or property through intimidation or undue exercise of authority. It may include threats of physical harm, criminal prosecution, or public exposure. Some forms of threat, especially those made in writing, are occasionally singled out for separate statutory treatment as blackmail. See also bribery.]]]

[[["""Extortion (also called blackmail*, shakedown, outwresting, and exaction) is a criminal offence of unlawfully obtaining money, property, or services from a person, entity, or institution, through coercion. Refraining from doing harm is sometimes euphemistically called protection. Extortion is commonly practiced by organized crime groups. The actual obtainment of money or property is not required to commit the offense."""]]]



If the bank take you to court and try to claim 8%, when they were happy to accept 3%, on a charging order just because they had to force you to sign it, it could be interpreted as Extortion but you have to point it out to a judge that by allowing them to claim 8% instead of 3% the judge would be allowing a criminal offense to be carried out in his court room i'm sure that would stir up a whole hornets nest of trouble for lenders.

Not 100% sure about it but as you say, nobody has yet challenged them under the new laws, so maybe now is the time.

Always get specialist legal advice but don't be put off if they don't agree they just don't want to try,try to find someone who does.

To be honest you don't have much to lose if they are going to get a charging order either way!

[labman]

Re: Banks wants a charging order on my property

I'm not keen on encouraging people to be guinea pigs. I'd rather rely on safer methods. Each to their own, of course. 'Extortion' is a VERY serious word to bandy around a court room, and IMO the OP may find they have more than they think to lose if they start accusing a bank of that. It is a criminal offence, thus tried in at least a Magistrates' Court, so costs enter the issue, and these rise very quickly indeed.
Again, purely my opinion.

[ed.]

Re: Banks wants a charging order on my property

Sorry I assume they were happy to accept 3% on pre court settlement, that doesn't mean that applies post court settlement.

Fraud/Exortion just no.

If it gets that far you can mitigate they would accept 3% but it was their terms and conditions on the settlement that made it impossible, you offered the fairest amount you could and that is replicated by your offer in court etc. Then it's down to the judge to rule.

But you never accuse lightly fraud or extortion just as retaliation because you had a better offer that you couldn't meet.

Unless you can show the claim for secured on unsecured...and in my opinion unsecured loans being turned into secured loans and charges is a joke but the only recourse seems to be a total revisement of the interest rate in your favour...is otherwise unfair, make the deal you agree with.

If they do it, make sure the life of the loan in interest terms reflects the further strength they now have. They hit you with higher interest because it was unsecured...if they now secure it, why should you not gain the benefit of the better interest rate over the course of the loan?

I might not be being PC here, but you had the money mate, don't just do the right thing, but make sure they do in your favour as well.

At the end of the day if you keep payments the charging order is a fantasy...don't blow a deal that suits because of it.

[wales01man]

Re: Banks wants a charging order on my property

Reading this thread interesting the word Extortion coming into it im not a fan of the banks but to accuse a bank of extortion seems a little over the top remember as in my case WeW owe them moneyand they will always have the advantage asking for things in writing to try and get the proof you would need to accuse them would be futile the bank has access to in house legal people and a wealth of experience in dealing with people who owe them they can and will take any action they want it sometimes looks like they would spend a tenner to get a pound they dont vare fore the mug owing the money maybe best to accept what you think you can afford as the debt has been accepted by the debtor the bank has many options most suit them not you