Debt Questions

So far people have been saying what I said but they are all intrigued so Specialist Support are looking into it - but I cannot hurry them!

i have sold with "charging orders". it was jointly owned and i had 25k of orders with my share of equity being only 2k.the co's simply revert to being unsecured again. a restriction means that when you go to sell the solicitor must notify the other party that is all. you will lose your equity to pay off the charges and what is left if any is yours, your partners equity is safe!!

Which goes back to my belief that the joint tenancy is irrevocably severed so that the partner's share of the equity is safe.

So would this apply to a remortgage as well - ie going from Joint Owners to Single Owner - ie Wife Buys husband out ?

Also if a solicitor only has to notify the other party - how do you lose your equity.

As I understood the whole point of this "dodge" was if the Solicitor had to inform the other party ie chargeholder that the property was to be sold they had to do something rapidly or all your share of the ackers would go to you and not to them

We definitely need a definitive answer in "Laymans Terms" of how the process works (for thickos like me)

Is this a branch of MI5

Thought I'd chip in from the peanut gallery!

1)You buy a house with a mortgage in both names - mortgage is a joint mortgage and land registry shows that you are joint tenants, the mortgage provider has a 'charge' on the land registry as its a secured loan. You both own 100% of the property

2)You buy a house with a mortgage in both names but because one of you is ponying up the lions share of the deposit you agree that this person will have 60% of the equity and you will have 40% of the equity - the land registry is set up to show that you are tenants in common - both of you have a stake but not the same stake - the % split would be defined in the conveyancing by the solicitor and would not be shown on land registry. Mortgage provider has a charge on property because its a secured loan

One of you hits skid row and wants to transfer owner ship of all equity to the other partner to avoid another 3rd party obtaining a charge on the property

First obstacle to overcome is the mortgage provider you need their permission because it will alter the ownership of a property that they have a charge on and it is illegal for them to aid in any action that removes an asset from creditors in any future bankruptcy.

If they agree then the land registry entry is changed to remove the debtors name - job done and only 1 person is shown on the land registry along with the mortgage providers 'charge'
This is true for both scenarios (1 &2 )

For scenario 1 debtor gets a CCJ which leads to a charging order on the property.

Creditor files a claim and at the same time an interim charging order which places a restriction on the land registry. You can still sell the house the restriction is meaningless but will show up in the land registry search done by the purchasers solicitor - should not affect the conveyancing at all.

If the CO is given by the judge either as part of the original claim or at a subsequent redetermination this is then entered on the land registry which changes the joint tenancy to tenants in common. The house is sold - first to get paid is the mortgage, then the equity is split in half , from the debtors half the debt (charge) is either paid off with the balance being left for the 'tenant in common' or there is not enough to pay off the debt and the balance of the debt reverts to unsecured. This would occur as part of conveyancing. During the conveyancing process the creditor with the CO would be notified by the land registry. I am assuming that both people are still together and that the house sale is not part of a divorce - if a divorce settlement has 'divvied' up the asset otherwise it would in normal circumstances overwrite the CO - but at this point the legal side of this becomes muddy and things like timing of the divorce agreement vs CO come into play.

Yes, Mrs Duff, that is what we have been saying:) Knackered however found a post that seemed to contradict this and talked about restrictions only.

The discrepancy is where the poster on Money Savings Expert says that there is never a full charge on a jointly owned property. I say that is because the joint tenancy is severed and has become a tenancy in common (ie a and b and perhaps even c have equal or different shares) and the poster on the other site was saying it was not.

So I have sent a message to Citizens Advice Specialist Support and asking the expert there to put it down in black and white so we know exactly what to say.

I must be going a little thicker (than usual) here

I had a charging order applied to a property I jointly own with my wife for a debt of mine.

As I mentioned before the CO was made final but the entry in The Land Registry just shows a restriction and there is no mention of a change in the tenancy to tenants in common etc.

Duff are you saying that this is purely cosmetic and does not prevent a sale or remortgage of the property without the consent of the Chargeholder ......

And furthermore is there a compulsion for them to be paid out of the proceeds or is this discretionary.

Sounds to good to be true

Heee heeee you jammy codger - whoever is/was responsible for sending the CCJ/CO paperwork to the land registry after the CO was awarded seems to have made a horlicks of things

With only a restriction showing in theory the house could be sold and the creditor gets naff-all. What I'm not sure of is whether or not during the conveyancing the solicitor or the Land Registry would notify the creditor; but if they did with only the restriction in place all they could do would be to holler and yowl and scrabble around looking for the CCJ/CO to send in to the Land Registry - sweeeet!

Well I sincerely hope that is correct Duff

As it is Sunday I feel it my christian duty to inform the creditor / court of their error first thing on the morrow in order that they can address the situation in their favour forthwith......

But as I am an atheist...............fat chance

Oh go on, you know you want to

Here is the reply from Specialist Support:

"I think both positions are correct.

You are correct in saying that the effect of a charging order is to sever any joint tenancy so that the owners now have a tenancy in common. This means that the right of survivorship is lost, that is, the process whereby if a joint tenant dies, her/his beneficial interest automatically passes to the survivor(s) and does not form part of the deceased's estate. The main practical effect of this is that, on the death of the first one, there is an estate and so this may have to be realised by a sale of the property in order to pay off the debts of the deceased (unless of course there are other assets such as a life policy).

On the other hand, the creditor's interest is protected only by a restriction on the register of title which requires them to be notified of any proposed disposition of the legal estate eg, on a sale of the property. As you say, the creditor can then object to the transfer but in practice the purchaser is going to want to know that the restriction will be removed before handing over the purchase money.

I hope that clarifies things for you."

This does not make sense.....

From what you say in theory if someone buys a property with a restriction on it - how can it be a restriction if they are able to complete the transaction.

What effect would the restriction have once someone else has bought the property - ie how does it effect the new owner is it transferred from the original owner to the new one.

This could go on forever passing down the line !!

Surely in plain English the purpose of a Charging Order must be to prevent the chargee being able to dispose of the property (or their share) without the holder of the CO being paid.

Otherwise what is the point of a CO

So, the charging order makes the debtors equity available for his charge holders claim, in front of next of kin or what has been willed to others after his death. Therefore, for the creditor, that is one benefit of securing his charging order.

The other being he may be able to use his charging order to force a sale to get his charge paid sooner,should the opportunity present itself.


BUT THAT IS 'IF' HE GETS A FULL CHARGING ORDER GRANTED

Right???


What I still don't get is what the restriction is restricting??

As I see it, a restriction simply means that the creditor is made aware that the debtors asset has been sold.

I would like to know...

1. Can a restriction stop a sale?

2. Can a restriction secure anything?

3. Is a restriction just a means of flagging up the sudden release of an asset so that a debt can then be re-pursued as per normal in the knowledge that funds should now be available?





4. Can a restriction re-restrict a restrictive restriction previously unrestricted by any other restriction or is it simply restricted to restrictions not restricting those re-restrictive restrictions previously restricted.


This is restricting my will to live

Thats a lot of Restrictions Knackered almost like a swear word one every other .....

I agree with your comments and would like further (in plain English)
clarification.

Please help us plebians Sarah