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I have been in debt management for 4 years now, and have paid a third off the original debt, but the remaining debt will still take 10 years to complete and hasn't reduced. One of my creditors now wants a final charging order on my property, which is held in a Deed of Trust, but my beneficial equity amounts to my outstanding mortgage. Will a charging order be filled without the equity and how will it effect a possible application for an IVA?

Hwy noendyet, Just wanted to welcome you to the forum. An expert will be along shortly to help you. viki X

Can you tell us how much you still owe to creditors and how much you are paying into your DMP each month please. Also how much is your property worth, and how much is the outstanding mortgage?

This highlights one of the disadvantages of a DMP as a method of repaying debt, in that creditors can still take legal action against you - even having paid for 4 years.

Hi Melanie
Thank you for your reply. I still owe £93,000 and pay £910 each month. I had the property valued in December 2007 at 295,000 and the outstanding mortgage, interest only is 117,000. My beneficial equity under the Deed of Trust is about £126,000 but there is an existing charging order of £7,500, so that leaves very little.
I look forward to your reply.

Are you the sole owner of the property? And can you confirm that the amount of the charging order is £7,500 - which would leave equity of £118,500?

Hi Melanie
Currently I am the sole owner on the Deeds, but my daughters have a legal right under the Deed of Trust set up in 1996 when they were only 15 and 13 . Under the Deed of Trust I am entitled to shares of the Trust in a ratio of 55/73.5. Therefore my share equals 126,750 minus my mortgage of 117,000 and the existing charge, 7,500. That leaves £2,250. Amex have now an interim charge of about £9,500 and I am due in court for the full charging order on 4th June. I was under the impression that a full charging order can only take place if there is sufficient equity.

hi

amex are a real pain, they were trying to put a charging order on our house too!

sorry i cannot answer your question but hopefully melanie will be back soon to advise you!

hope it all works out ok!

barb x

The Deed of Trust will not stop the charging order, neither will the fact that there is no equity. Amex are remowned for seeking charging orders over properties, but if you move quickly an IVA could defeat this and allow you to carry on making structured repayments for a set time period.

We had the same from Amex and as Melanie has sais if you move quickly with an IVA, if you decide that that is the right course of action for you. You should find that your IP will stop the charging order.

The other advantage of Iva is that your debt would be paid sooner than the 10 years you have left on your DMP and your creditors would no longer be able to take any action against you.

Good luck,

Kirsty

I just wanted to wish you luck. An IVA seems the sensible option here,
xx

I would tend to agree.. hope everything goes ok