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Advice Please - wahid 2010-07-26 15:19:33

hello i have charging order, the debtor does,nt seem like paying, i am thinking down the avenue of asking his mortgage company to relieve me of my debt and inturn increase the debtors mortgage, is this possible

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Re:Advice Please - simon wiggins 2010-07-26 19:21:41

Hi there and thank you for your interest in our site.

However I think you misunderstand this sites purpose, which is to assist people in multiple debts they can’t pay and to advise them on various debt solutions available to them under UK law. We do not advise the general public on any other matters and certainly never advise on how to collect debts in any form as a local solicitors firm or advice agency may do locally to you.

However I would comment that if you already hold a charging order for the debt that you are owed this simple means you hold a charge over and above any original charge or charges that were already in place before you obtained you which would normally take the form of the mortgage lenders first charge over the property and possibly a second or subsequent charges if the person in question obtained a secured loan or further advance. In some cases other creditors will also have taken this enforce route and also have charges on the property in order before yours. Your charge is placed on at the land registry and is against the debtor’s share of the beneficial interest (equity) that they own. It is normal that the courts will allow the securing of unpaid debts but this usually where they set a rate of payment alongside it based on the debtors means As long as those payments are made on time no further enforcement action is possible. However the final stage in the recovery process is what’s known as an "order for sale" and these are far far harder to obtain especially if there is little in the way of equity in the property of if its a family residence or jointly owned the thinking behind this is that the creditor will over time get their money back but at a rate the debtor can afford not what the creditor may wish for.

To answer your point re the first charge holder (the debtors mortgage lender) in over 20 years as money adviser I have never seen what you outline agreed to as no first charge holder would consider this what does occur is the debtor refinancing or re-mortgaging in one form or another to raise the funds to pay off any debts they may have secured or otherwise but this based as ever on their ability to pay If the debtor cant afford to repay you what is owed and court action has been necessary then its almost a forgone conclusion that no company is likely to agreed to a re-mortgage or secured loan based on their income and past credit standing which has of course been severely damaged by the very fact you obtained a CCJ followed by a charging order in the first place.

So the best you can hope for is that the debt gets repaid over time but only at a rate the debtor can afford and the court seems reasonable. There is a procedure to have a person examined by the court staff (a means enquiry) to establish what surplus income if any they have which can be paid to all of their creditors but this of course has a further cost attached to making this happen.

For any advice re the options open to you from this point on and the likely chances in the real world of success you must talk to an adviser at your local CAB or similar or obtain paid for legal advice from any local solicitors firm. You have to remember that the debtor simply may not have the means to pay you back at a rate you would like if they can afford to do so at all and that a charging order over a property with little or no equity is a very ineffective tool as the courts will never grant an order for sale in these circumstances given little or no money would be paid or likely to be paid to the creditor making the application. I

Best wishes

Simon Wiggins Site Moderator

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