Charge on property from Oct by unsecured lender ?

[iambroke]

Spoke to NDLine this morning and apparently from 1st October an unsecured lender like a credit card company can apply to the courts to have a charge put against your property if a CCJ is granted. ???

Possibly misunderstood what was being said as head all over place at moment [:(]

[nickjohn]

I think if a CCJ is granted then the debt has been proven in a court and it has always been possible for them to put a charge on your property..

Not sure on the specifics but I also thought you had to agree to the charge and they only last for, I think, 10 or 12 years. So if you not planning on selling soon should not be a problem. If you are looking at selling then its their way of securing their money without sending the bailiffs round...

[Kelly O]

Hi iambroke

An unsecured lender has always been able to put a charge on a property if they have a CCJ and a debtor had defaulted on an arrangement to repay the CCJ.

From the 1st of October a lender will be able to apply for a charge without a debtor defaulting on the arrangement to repay the debt, so having the CCJ will be sufficient for the lender to go for a charge over the property.

Very unfair in my opinion

[sponge]

are you in an IVA if not speak to an IP quick like, once the IVA process starts, they may be able to stop the process

I assume the unsecured creditor is trying to get in there fast, say before the an IVA is consumated?

There's another one on this subject of charging orders, I can't really make sense of it

[sponge]

kelly O

I assume though that if you get in there first with an IVA then they can't get a charge on it?

[nickjohn]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Kelly O

Hi iambroke

An unsecured lender has always been able to put a charge on a property if they have a CCJ and a debtor had defaulted on an arrangement to repay the CCJ.

From the 1st of October a lender will be able to apply for a charge without a debtor defaulting on the arrangement to repay the debt, so having the CCJ will be sufficient for the lender to go for a charge over the property.

Very unfair in my opinion

Do you still have to agree to the charge or can they just implement it??

[Kelly O]

Thats right if you have an IVA in place before they apply for a charge the debt will be included in the IVA.

You don't have to agree to the charge they can apply to enforce their judgement by a charging order, you can defend the action in court.

It will be interesting to see if this will increase the number of charging orders applied for by creditors

[size5]

Unfortunately, I can see no other scenario than numbers rising, probably significantly. This measure has not in any way been designed to help debtors, the info I have seen on it makes it clear that creditor interests have been to the forefront of the rationale behind this policy shift. There are also moves afoot to "simplify" the process. In practice, it will mean 1 court hearing rather than 2.

I suspect, and this is a personal opinion, that creditors are quite happy to see this on the basis of "put a charge on and we can collect it out however long it takes" in effect lots more DMP's and a lot less IVA's. It may be a short sighted view though, as homeowners can be wary re IVA's because of equity issues, there are enough threads on here to back that up. If debtors are going to lose equity through an increased use of charging orders, then that viewpoint may change, and we may see more, not less, IVA's being applied for. If equity is being eroded, then BR's may rise in number as well. Only time will tell of course.

Regards.

[MelanieGiles]

Not sure I follow the logic there Mike of lots more DMPs. Surely more people would want to use the IVA process to avoid charging orders - and with an envisaged DM protocol indicating that lenders view IVAs as not suitable if they would take longer than 10 years to repay, personally see more IVAs as a result. Again - just my own personal thoughts.

Clearly anyone in debt, with a property with equity, ought to seriously consider the advantages and protectiion that an IVA brings with regard to the family home - particularly in times where lenders are very reluctant to lend to people in IVAs - leaving the additional year of payments as the ultimate fall back.

Perhaps I have misinterpreted your comments ...

[size5]

Yes I see, the point I was making was that I feel there will end up being a sea change in attitudes the other way in the end. Other forums, very much more viewed than this one, I look in on from time to time, make great play of avoiding IVA's when homeowners, indeed avoiding them whatever the circumstances. Very pro DMP in fact, but only where such DMP's are "free".

I am, however, maybe a little more cynical towards creditors. Creditor funded agencies do not appear to have any qualms over timescales on DMP's in reality, though lip service may be paid otherwise, and more charging orders, because they are now debts that cannot be covered by IVA, can, from the right viewpoint, look like another reason to look at DMP's where they may be inappropriate. I suspect that creditors may not be too unhappy with such a scenario.

As I say, only a personal opinion, and maybe I am too cynical. I hope, in many ways, that I am proved wrong in the end.

Regards.

[MelanieGiles]

The message for anyone with unaffordable debt has got to be to seek advice and take action to avoid one or two greedy creditors getting ahead of the game. Most people who enter into DMPs do not do this for the sole intention of eventually repaying all of their debts - it is generally done because they are perceived to be more flexible and the lesser of three evils.

Just today I had a prospective client plump for an 18 year DMP, rather than a 5 year IVA - simply on the basis that he had a modest bank overdraft that he wanted to keep out of the DMP. At present, most things are acceptable in a DMP, beacuse the client is very much in the driving seat with regards to what is and is not included, and how much is eventually repaid - especially if they choose a self-managed scheme. So long as my clients make the right choices, to suit their own priorities, then I wish them well - but I must admit to finding it a little distasteful to see a bank led prospective DM protocol that the banks themselves may take little heed to.

[size5]

As ever, far better articulated than I could have hoped for Mel. It will indeed be very interesting to see what difference in numbers of charging orders being granted or even applied for when compared to current numbers.

Regards.