Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
Did you attend the hearing please or was this a default judgement?
Hi, yes i attended the hearing
Thanks. Do you accept the judgement or are you considering an appeal?
I accept it. The old company is now all gone but they have a 2nd charge over our home
Thanks. Presumably you gave a personal guarantee on behalf of your company and gave you house as security for the guarantee. Could you confirm the date (approximately) the court order gives you for payment of the debt and the approximate amount of the judgement debt?
Yes, i gave a PG and house as security. The judgment is for £160k plus costs. Total circa £180k (£60k of this is a termination charge). Judgement was to be paid by 6th Nov, 2013. I stated in court that i would sell my building land in order to settle this debt but didn't think we could achieve a completion for 6th Nov.
My house has just been valued at £1,100,000. The mortgage with C&G is £531k with no arrears
Thank you. May I clarify the date as 6 Nov 2013 has already passed?
Yes it has
Thanks. Finally could you advise your best guess - I appreciate it can be nothing more than this - as to when you expect completion to likely be achieved?
Today, they have asked for £50k to be paid by 31st December, 2013 whilst they wait for the land sale to be completed.
Is that or any part of the request feasible from your point of view?
No, i cannot make that payment. I am in regular contact with them updating them regarding the land. The land has full detailed planning permission for 4 houses all passed. It i subject to a section 106 agreement which is also passed - the council are just finalizing the wording contained within it. The clients solicitors are aware of this this.
A guess is that we will complete the sale in 4 months
interest continues to be added to the debt
Thanks. Last question - I presume you have looked at other possible way of financing the judgement debt - e.g. a bridging loan from your bank and / or a further advance on your mortgage. I simply ask as such alternatives may be cheaper than accruing judgement interest?
No. For two reasons; 1) they seemed happy for the debt to be paid for by the proceeds of the sale of land 2) i didn't think anyone would loan me money due to the judgement against me
I thought that as they had security on the debt, and that there is more than enough equity in the house they wouldn't be able to take anymore severe action
ie. make me bankrupt, force a sale of the house etc
Thanks. Though it is a separate (related) issue if you have not done so it may be worth investigating on the above basis that it may be cheaper than servicing interest on the judgement debt but it may not be possible or attractive due to costs of the alternative finance. May be worth investigating the option though as having options is rarely a bad thing. In terms of your specific question however...
In terms of enforcing the judgement there are a variety of options available to them however the only likely approaches they may seek would be seeking to enforce an order for sale against your home against which they have a charge, seeking a charging order against your other house which are selling, if you have income, seeking a third party debt order or if you have valuable goods they could seize, seeking bailiffs to seize the same or finally seeking a bankruptcy order. Dealing with some of these points...
Enforcing an order of sale against your home is likely to fall into difficulty as you can raise a possible defence on the grounds that it is a disproportionate means of enforcement in terms of its effect on your family given that you are nearing a position of being able to sell another property to settle the matter. A court will have regard for such a defence particularly where you can show that you have been acting in good faith throughout and are making genuine attempts to sell...
Seeking a charging order against the other house is possible but questionable as to whether this is worth while as they already ave a charge against your other property with sufficient equity. If they apply and succeed it would sit there until you sell so has limited practical effect.
Bailiffs can be a problem if you have valuable goods - e.g. a car or other things that can be seized/ You do not have to give them entry to your home but they can remove items if you give them entry and can seize a car if it is for example parked outside your home. You would have notice of a warrant application before bailiffs could attend though.
Thank you very much. I do have a car but it is on lease so not owned by me.
I can take some comfort in your comments regarding selling our home and/or gaining a charging order over the land
They can have a charge on it if they like, that doesn't concern me
Bailiffs - i would never allow entry
If the car is leased rather than owned by you then bailiffs cannot seize it as it belongs to someone else. I cannot see this is of great concern in the circumstances.
I didn't think they could send bailiffs into our home as the debt is over £5,000?
They could use bailiffs if they wish by instructing High Court Enforcement Officers following an application to the court but it is questionable whether they would do so in the circumstances as the amount they could potentially recover would be limited in contrast to the debt.
Finally the could seek a petition to make you bankrupt. This is a potential concern as it is possible to petition for bankruptcy if you are unable to pay your debts as they fall due. If they attempt to do this you should give consideration to 1. retaining a solicitor and 2. seeking to do what you can to raise money to pay the debt as the only reliable defence to bankruptcy is to pay the debt owed.
However there are technical defences that can be raised and tactics to delay a bankruptcy hearing. A good solicitor experienced with bankruptcy petitions can find defects in applications or service and seek to have a petition dismissed. Documents must be personally served on you and this process can be frustrated by you by seeking to avoid service by a process server. If you defend a bankruptcy petition then the process will be delayed while the court sets a date for a hearing and so on.
Do you think a court would make me bankrupt when i have assets circa £1.6M and debts circa £800k?
However the best approach is to seek to avoid circumstances arising where the petition is not made in the first place and so regular contact and updates as you have been doing are worthwhile and evidence that the sale is genuinely progressing and so on.
Technically a bankruptcy order can be made if you are unable to pay your debts as they fall due. Generally however my feeling is that if it comes to it you should be able to find a way of avoiding bankruptcy by one means or another because with so much equity available I would be surprised if you cannot secure one form of lending or another to raise further monies to allow you to pay the debt as there is little risk to a lender given the amount of security with or without a CCJ against your name.
You may do well to speak to a mortgage broker to see what options you have available to you. There are many lenders (known as sub prime lenders) that will actively consider opportunities to lend to people that have bad credit and with so much equity as above, I would be surprised if there are not relatively mainstream sub prime lenders that would not consider lending to you but all depends on criteria and circumstances.
The options you give yourself in this respect the less likely you find yourself boxed in however and thinking ahead defensively in this respect could be helpful potentially
Is there anything above I can clarify for you?
Thank you very much indeed for your help. You have prompted me to look at a bridging loan or advance to settle this debt. I thought they were happy to wait until the sale of the land, but also (incorrectly) thought the council would be quicker in finalizing the planning documents. How can i get in touch with you should i need furyer advice?
They may yet be if you continue to keep them appraised and there is progress however a back up plan would be a useful comfort it goes without saying.
If you have any further questions you can return to this thread or ask form me by either clicking on my profile or asking for me in the first line of any question. I would be very please to assist further as necessary.
Does the above answer all your questions or is there anything I can clarify or help with any further?
You have helped me more than I could have wished and very quickly. I do appreciate your advice. I will come back to you if things change and i will take your advice on board. Thank you very much
A great pleasure. I hope the matter is resolved without recourse to further court applications but in any event wish you well with your sale. And please do.
If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.
i certainly will. Thank you