www.iva.co.uk

We have a debt to mbna and they are going for a charging order against our home apparently. What happens?? And how does it work?? We are currently in debt management plan and pay them £5 per month towards a debt of £2800. Would the charging order just secure the debt and as long as we keep up with payments nothing else would happen but if we miss payments can make us sell and pay off with equity? Thanks sarah x

Hi Sarah, sorry I don't personally know the answer to this post but will bump it back up so another poster can answer x

A charging order will secure MBNA's debt against the property meaning that if you sell the property MBNA will be paid first before you receive any equity.

It's very unlikley that you would be able to acheive a sale unless MBNA are paid in full (relevent if you are in negative equity)

In theory a charging order could give MBNA a right to force a sale of the house but in practice they are unlikely to go down this route and, even if they did, it's very unlikely that a court would agree.

In the meantime, however, you will have to agree a repayment with MBNA that they will accept. The amount that you are currently paying is a starting point because the court will accept that you also have to make payments to your other creditors.

If you had been eligible for an IVA, and it had been approved, MBNA would not have been able to go for a charging order. That is one of the big differences between an IVA and a DMP.

Catullus is correct, but if the charging order is not yet final, which by the sounds of it it isn't, and if an IVA may be viable (no idea on that one as there is not enough info in your post) then it can be stopped by looking at an IVA.

Not knocking your DMP, it may indeed be exactly the right thing to do, but it doesn't really carry any weight in law. Take a 2nd opinion from an IP firm, it won't cost you anything.

Regards.