babber

Serious advice needed here please regarding restrictions on land registry and charging orders.

I bought a house with a mate of mine in October 2004, as I recently divorced and was ripped off by my ex wife. I thought buying a house with a mate was a good idea, as we been mates forever, etc, etc. He paid the deposit and the agreement was I’d pay the mortgage until I had paid my half back.

Almost immediately after moving into the house, my mate met girl and basically spent all his time at her house. He did stay here once a week when he had his son for the evening, but that was it. He showed no interest in the house when it was time to decorate, etc so it was soon evident he didn’t want to be here. After probably a year, the money I owed him was paid back. He was now staying at his girl friends all the time.

I met a girl not long after buying this house and she decided to sell her house and move in with me. I asked my mate what he wanted to do, as he wasn’t contributing to any of the bills.

I was between jobs and couldn’t afford to re-mortgage, so we agreed that he would walk away from his interest in the property and I would try and continue paying all the bills until I would afford to change the mortgage and land registry. We never got anything documented with a solicitor which I think was a big mistake.

The end of last year I got a letter from the Land Registry informing me he had unpaid debts and Northern Rock were Registering a restriction on the property, for a charging order on my mates interest in the house. The debt was for around £11,000. I was very concerned and went to see a Lawyer who was so say a specialist in this field. I saw him prior to the final hearing in court, and was assured we wouldn’t need to attend court. He assured me the restriction would be lifted.

He sent letters to everyone, including my house insurance company Tesco asking for legal assistance under the legal protect scheme. Tesco refused as they said we were co-habituating as a couple. I can’t remember changing my sexual preference, but that’s the way they saw it. So no financial assistance was offered to fight the case.

I was more than annoyed with the lawyer as I know owed him £1500 and the situation was the same as before I went to see him apart from the restriction was now in force. I contacted Northern Rock and they said if I paid £7000 in cash, they would remove the restriction and I could change the land registry and mortgage. I applied for a few loans to pay for his debt and surprise, surprise no-one would lend me the money, as there was a bad dept showing at this address or something like that.

I started to save money to pay his debt off, but getting hold of that amount of money whilst paying the bills etc, wasn’t easy.

Two weeks ago, I got another letter through the post informing me someone else was intending to put a restriction / charging order on his interest in the property.

I telephoned the land registry and put my case across to them. They told me to get a solicitor and in the meanwhile sent a letter of appeal to them. I’ve sent a letter of appeal to them and they replied to me. They did inform me this order is for £7500.

Basically it goes along the line of: -

“Since CapQuest Investments limited have obtained an interim charging order against the interest of ??????? in the above property, they are entitled to protect the order by means of a restriction registered against your title.

As the position stands at the current date, it seems that you are not in a position to object to the application because the interim charging order is in existence now and there are no grounds upon which the registry can refuse to complete the application. Your objection is therefore considered groundless and for that reason, subject to any further comment you may wish to make by 15th November, I will have to proceed with the application and enter the restriction.

However, I note that there is a further hearing in the matter on 18th December 2007 at Redditch County Court. Any Representations which you may wish to make should be made at that hearing. If at that date or at some point in the future the interim charging order is discharged, then an application may be made at that time for the cancellation of the restriction.”

I haven’t engaged a solicitor yet, as I’m not sure there is anything they can do? I don’t want another huge solicitor / lawyers bill to be in exactly the same position as I am now.

I am getting to the point of handing the keys back to Abbey as they haven’t given me any support through-out the ordeal. My lawyer (the one that did nothing for his money) already tried to get Abbey to change the title on the property, they refused saying my mate might go bankrupt in the interim future.

Over the past three years my mate has not mentioned the charging order, on the rare occasions I seen / spoken to him. I was not that bothered as the way I saw it was if he would have continued to live here (and paid his way with the bills) the property would have increased in value and covered the debt registered against my home.

I managed to get hold of him the other day through his brother and he doesn’t have the means to pay this or the previous debt. He is the type of person that doesn’t worry about anything (often sticking his head in the sand) and comes out with saying like “it’ll all be ok in the end”

I could really do with some sound advise from someone who understands what all this actually means?

The way I see it now is his debts are eating up the profits in the property, and if he gets another charging order then I wasted the last three years trying to pay the mortgage, as the debts will be more than the equity in the property. Been paying £1450 a month for most of this time. I am living with my partner who has two children and my four daughters come and live with me at the weekends

I’ve had numerous debt collecting agencies knocking on the door asking to speak to him, over the past few months. I don’t have an address for him (I wonder why he won’t tell me where he is living too) so can’t send them after him. It looks like he keeps moving around to avoid being caught. I’ve since put a notice on my door saying he doesn’t live here and never has!!

Is there anything else I can do about the situation?

I now know I was daft not getting a formal agreement between ourselves when we moved in / when he decided to leave.

I’m really worried about what is going to happen and after three years of struggling to pay the bills might find that I could well be homeless.

Can anyone make any suggestions that understand all this because I don’t have a clue what to do about it?

Will I be homeless? If I pay the mortgage off (full term) what will happen then?

Maybe this might be a warning to all of you out there who thinks buying a house with a mate is a good idea, cause I wish I read this a few years ago.

Thanks in advance Phill

babber

Just spoken to him, he has the paperwork in his hands to file for bankruptcy. I can't even speak to him I'm so angry....

He told my misses when he files it all the other debts (and it sounds like a lot) will be added to the property, in the form of more restrictions. Is that what happens?

Do I have any options, she asked him to wait a few days to see if there's anything we can do.

Thanks Phill

Devildog

Phill,

IIRC The charging order effectively gives Northern Rock a second security which ranks after the mortgage. Charging orders are English law and I practice in Scotland, so bear with me.

If he is declared bankrupt the trustee/official receiver will have an obligation to realise the other blokes half share of whatever equity is in the property.

ie, value minus mortgage minus northern rock = equity of which half is yours.

2 options.

1) house sold and equity split with half to you
2) you buy his half share out of the bankruptcy.

But you will, I suspect, still need to deal with Northern Rock.

Either way, if you want to stay in the house you are going to have to find a load of cash or orginise a re mortgage.

whats the current value/mortgage position?

Jonto on here does something similar to me but under English law. might be worth a PM

babber

Last time we tried to speak to Northern Rock they wouldn't talk to us really, but did suggest a settlement figure of £7000 based on the fact there was no or little equity at that time.

I paid £200,000 for the house, with a ten percent deposit. Mortgage is currently £184,000. I would guess the value of the house would be around £230,000. I tried to get a remortgage with Abbey and they told me no way!! Since all this started I can't get loans or credit cards anymore. I did go into arrears a couple of times when work was scarce, so maybe that's why.

I'm really disappointed there are no law to protect me. Why can't I claim my interest in the money he hasn't paid me for his share?

Can they force me to sell the house?

Thanks Phill

babber

BTW Devildog thanks for the reply mate.... Greatly appreciated.

Phill

Devildog

Unfortunately, yes, but you will receive one half of the net free proceeds.

As for what he hasn't paid you for his share, technically you rank as a creditor along with everyone else.

You're stuck between a rock and a hard place. If he is declared bankrupt, you'd be as well to let the house be sold and use your share for a deposit on something else.

if not, you are going to have to find £7,000 for Northern Rock (although I'd offer them £5,000 to release the order and, say, £20k to buy out your "mate's" interest in the equity.

This would give you 100% title, but £25k is going to be a big ask. NR may let you flip their charged debt into a secured (or unsecured) loan.

I appreciate its not your debt, but sometimes life sucks.

Good luck

babber

Tried that with NR and they declined. They also declined a loan a year later for a van I wanted to buy. Previously I borrowed £16,000 from them for a car, and paid the money back no problems.

Life does suck mate, lost £13,000 on my first property, £120,000 on my divorce and now whatever this is going to cost.

So will they force me to sell house and how long is that likely to take? What if I refuse?

Thanks for the advise mate, Phill

Ms Gooner 1

OK - I'm no legal buff - but I had a charge against my property...... which was a complete nightmare.
Basically in 2001 I had a car on finance. I lost my job, and ended up claiming job seekers allowance for a while. I got in touch with the insurance for payment protection - and long and short - they made 3 payments and that was it .
The finance continued to mount up and eventually I gave the car back - It was only a Rover probably worth at the time no more than 5.5k - and I'd paid it no probs for over a year - anyway, they took me to court (which was a circus) and basically put a charge on my property. My husband was furious because obviously the house is 50/50 and now this debt, which now totalled some £11,750 ( ) was on HIS share of the house too.
To add salt to the already festering wound - the courts added interest at wait for it.............. £1.70 PER DAY!!! I now have three very young children and obviously don't work - my husband flatly refused to pay my debt and it got to the stage they were threatening possession!
However, it turned out - or at least, so i told them, that even if they forced sale they wouldn't get their money because there wouldnt be enough equity, once the mortgage was paid and the secured loan - there'd be about 6k left over and half of that belonged to my other half - so that meant they'd get some 3k?
We went for a re-mortgage, they negotiated with them to bring the amount down - and it got sorted out at the beginning of September.
I would strongly recommend going down to your local citizens advice bereau with ANY and ALL paperwork you have and getting them to help you out. They will write letters and make phone calls and for me, in the past have prooved to be VERY helpful.
I hope you get it sorted soon and it works out in your favour.
Failing that - I'd instruct legal proceedings in the small claims court on your friend BEFORE he goes "bankrupt".

fbladerrv900

Boss WTF we need to hook up,....

Are you around this week ?

fast bloke

babber - this is a bad situation, but all you can rely on is the goodwill of the lender(s) to get you out of it. I'll have a re-read tomorrow and see if I can give you a steer on a good lender argument.

Ms Gooner - there is a big flaw with your history. A lender shouldn't be able to convert an unsecured debt to a secured debt unless both you and your hubby agreed. From reading this it appears that you haven't done so knowingly. Who suggested that the debt become secured as a second charge?

babber

Fast Bloke thanks for the reply. It is the worse situation I ever been in in my life. I can't sleep properly and am very very grumpy / short tempered. Worse thing about all this is it not my fault nor my debts and doesn't seem like there's anything I can do. My misses, her daughter along with me will be homeless and I won't have anywhere to have my daughters to stay over-night......

Pissed right off and if anyone can think of anything, please add your comments.

Phill

babber

Anyone got anything to add to this please?

Thanks Phill

Luan Pra bang

Get your mate to sign some paper work to state you gave him a loan of 30k Back date some demands for money and take him to court getting him to admit that he owes you the money. Once he is bankrupt at least you will be the person owed the most cash. It made be too late to do this but see what happens. Its a very complicated area of law but only a specialist in this area can help there are very few soliciters that can do this kind of work well and they all talk crap saying they know what to do.

Devildog

Phill,

Sorry for not getting back to you sooner.

Yes, they can force you to sell your house. Northern Rock will, however, prefer you to settle the debt with them, rather than force a sale.

If your "mate" is made bankrupt then the official reciever or Trustee in Bankruptcy will ask you for half of the equity, failing which they can force a sale by statute. Realistically, under your circumsances, I doubt you will have anything in the way of a defence to that unless you daughters are with you full time?

If you do defend any action it will cost a fair bit, and you don't recover costs if you win.

By all means speak to citizens advice, but bear in mind they are generaly not all knowing about matters of this nature. If you want good advice, you are going to have to employ a solicitor who specialises in insolvency matters. A firm like Eversheds, for example. High hourly rates though, and I don't honestly think they can do much to help, other than confirm the position.

Realistically, the best thing you can do (unless you can negotiate a loan/pay off NR and the half share of the equity from as remortgage or equity release) is bite the bullit and put the house on the market now, offer NR an irrevocable mandate to pay them the £7,000 when the sale completes.

You will obviously need the other guys autograph at some point, or whoever is dealing with his bankruptcy to sign the sale contract.

If you can't remortgage or get an equity release, this is the best way of achieving the best value, rather than a foced sale. I get the impression your lend is maxed out on income - could your new missus help?

Otherwise another one to chalk up to experience i'm afraid, take half the free proceeds and buy somewhere else.

Sorry its not better news, but you'd be better off being proactive than waiting for something to happen.


hth

Brendan Hughes

Friend of mine split up with his wife while living in the same house. He paid 95% or so of the mortgage. When they split, court decided he should move out to the little flat above his shop, she should stay in the house. Basic principle above all others (as he was spitting blood at this decision) was that someone should not be made homeless.

You've a lot to worry about, I can't give advice as much as the others on here but I hope the above gives you a thread to hang on to.

Good luck.

fast bloke

Devildog - Is it the case that if Phill manages to get a mortgage now and hand over 50% of the equity to his 'mate', the the reciever wouldn't have a claim on the house once Phill has 100% title? Is there a scenario where he could hand over 50% of the equity to a solicitor to be held in an escrow account until the receiver asks for it or the matter is settled?

Devildog

Yes, on the first point, although there should be concerns that the change in title is recorded before any Bankruptcy proceedings. Not sure about England, but in Scotland title only passes with registration, not payment.

Definately need advice from a solicitor with detailed knowledge of Insolvency proceedings.

Yes on the second point - and its a far better solution in the circumstances - although the "mate" may not agree to that.

babber

Still trying to come to terms with what is going on and I'm so not happy about it All this doesn't seem fair to me.... I don't think my "mate" and me will be speaking again

I'll be looking to borrow prob another £25 k to pay off his ******* debts which will make my large mortgage even larger, my payments higher per month and my term back to 25 years.

Thanks for all the advise, Phill

PS What would happen if I burnt the house to the ground? A quick spell in prison and knowone would get there money? Just a thought

babber

Can anyone suggest a good solicitor that has knowledge of Insolvency, rather than a useless Lawyer that simply like to big up the final bill and doesn't care about the outcome?

Mate can go **** himself to be honest. I'm thinking of registering a restriction on my property, so I can claim the money or a portion of the money he hasn't paid me over the past 2 1/2 year :angry: I've told a few friends of mine about this now and feel much better that I'm sharing it. Difficult when you move around in the same circles of mate

Phill

Floyd

iTrader: (9)

Bloody hell Phill I feel for ya mate.

Your mate needs a reality check

F

fast bloke

Phill, - Don't burn it - you would get fek all. You should be able to claim your equity without having to pay his debt. Devildog has already indicated that this is possible with the required signatures. Don't commit to anything before Monday. We have an insolvency solicitor working next door. She is brilliant, but she charges about a hundred quid if you look at her office door. I am not 100% sure that YOU need an insolvency solicitor. It might be easier if the recievers were involved. They are basically horse traders with no horses.

Anyway - Don't be down. There is enough help available on SN to get you on the right path if there is a right path to be found. If that fails we can organise a group kicking for your 'mate' who landed you in the sh1te

babber

Lol, I like the idea of a group kicking for my so called mate. I wonder if we should start a new thread.

I was joking about burning the place down, but if it was then no-one would get anything would they?

Will you speak to her on my behalf? I understand it going to cost me money. Everything I ever do costs me a fortune, so am expecting to have to pay money out to get all this resolved. If I got to sell the RB5 to pay all my fees, then so be it

I turned to SN as I knew someone would be able to offer some kind of help, but never imagined we might be able to find a workable solution. It has helped me loads, just being able to talk about it.

My misses and I had our second arguement since getting together and that's not good We've been together for 3 years now and just don't argue, so he has got a lot to answer for, the c**t. First arguement was cause I got pissed on a friday night and missed the only flight from Jersey to Bristol on a saturday morning, oups.... Ended up costing me £120 to fly to Cardiff

Thanks for everyones help and encouragement. I'm now ready to fight back from the corner now!!

As I said before I got a misses and her daughter that I couldn't live with myself if they were thrown out on the streets!!

Thanks for the support, Phill

babber

I'm getting some bloody good advise now. Thanks to Fastbloke and Devildog (being professionals that can charge for there services) who have helped for free. The power of Scoobynet, hey

Local MP has been very helpful as well.

Few mates have been great, and never had a clue this was going on for so long. One or two have been complete ******

I'd like to report light at the end of the tunnel, but not at the moment. I'm sure it'll all work out good in the end. We shall see.

However one good bit of news, all my girls are allowed to stay with us on Christmas eve, so we'll have all 6 kids together. Maybe it will be the last time

Phill