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By Jeremy69
#2189
Morning. I am in a DMP at the moment.

One of my creditors is refusing to accept the amount I am paying them each month (although they have not rejected the money!). They have just issued a court summons to me.

I am argueing about the legality of the credit card agreement with them as well but to be honest I am tired of fighting them and would like to offer them a settlement figure.

I guess this would break the terms of my DMP becuase I would be fabouring them but I don't feel like I have a lot of choice.

Can I do this kind of thing even when they have started court proceedings or is it too late for that now??
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By Hayden
#2195
Hello Jeremy

I suspect that what has happened is that you have received a county court judgement claim form from the credit card company. Is that right? If so there is really no need to worry. Are you with a debt management company? If so, speak to them and they will advise you. If you are doing the debt management on your own, then you ned to complete the forms and return them. Its likely that a CCJ will then be issued and you simply start paying it as one of the payments within your DMP. However, completing the form has to be done correctly so that you are not asked to pay too much. You should get the advice of a debt management expert if you are not already working with one.
By Jeremy69
#2235
I have a property with quite a bit of equity in it Andrew. This is one of the reasons I went with a DMP rather than any other solution. Problem is I am not in a position to release anything to pay off the debt.
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By Steve Jackson
#2236
I suggest you complete the CCJ claim form and return it Jeremy. Make sure you use the same figures for your income and expenditure as in your DMP and state the amount you can afford to pay as per your current DMP payment. Get advice on doing this from an expert if you need to. Then continue to pay your DMP as before. Given the court agree the monthly payment (and there is no reason they should not do this), a CCJ would actually be to your advantage. Once in place, the creditor will not be able to add further interest to the account as long as you maintain the required payment.
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By Andrew Graveson
#2246
I suspect that once the bank obtain a CCJ they will be looking to get a Charging Order.......otherwise why go to the trouble of getting a CCJ that will probably result in the same monthly payment as under the DMP. This would have the effect of securing the debt upon your home Jeremy and will need to be repaid in full if you remortgage or sell the home. If this were to happen it's likely that interest would continue to be added (perhaps at 8%).

Given that's possibly the case it might be worth trying to make it go away before it gets to Court?
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By Hayden
#2337
From what Andrew has said, it sounds as though you should thry to avoid getting a charging order if possible Jeremy. However, if this happens, my understand is that the creditor can not force the sale of the house. It simply means that the debt has been secured and will be paid in full from equity (after the 1st mortgage) if and when the property is sold.
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By Steve Jackson
#2348
That's right Hayden. If a charging order is granted, the creditor can certainly not automatically force the sale of the property. To do this, they would have to go back to court and get an Order of Sale which the court are generally reluctant to issue. See my article for more information on this: https://www.beatmydebt.com/news-article ... y-home.htm. Nevertheless, as Andrew says, it is always worth avoiding a charging order if possible.
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By Andrew Graveson
#2356
In the majority of cases we see a Charging Order is being used as a defensive measure by creditors. By this I mean that the creditor may be concerned that the debtor may choose at some point to go bankrupt (or another creditor will force them to go bankrupt) in which case most or all of the debt could be written off.

Securing the debt on a property avoids this scenario as the debt would not be included in a bankruptcy.

By the nature of the cases we are dealing with though our clients are making regular payments towards the debts. None of our clients has ever been subject to an Order for Sale.

I think the majority of instances where Orders for Sale are attempted relate to people who are ignoring the attempts of the lender to contact them and come up with some sort of arrangement. This effectively leaves the creditor with few other options than to take this type of extreme action.

As so often maintaining contact with creditors, whether doing so yourself or via a thrid party, is the best policy.