Removal of a Caution against my property

[nansiellis2912]

In 1999 during a period of financial difficulty I had a charge registered against my property by an estate agent relating to a debt of £1500. Recently (over 10 years later) the agents office sent me a letter notifying me that they had added interest to this charge and that the new debt is now over £7000. I have not worked since 1999 and still cannot afford to pay this amount of money. What should I do? My son has volunteered to pay the original £1500 to have the caution removed. Is this possible?

[woofgang]

what has happened in the mean time? Did you pay off any part of the debt? Did you talk to them about the fact that you couldn't pay? Did they tell you they were going to add interest to what you owed them (which in itself is not unreasonable) The CAB are often very helpful with money problems, it might be worth talking to them.

[themas]

I assume the original debt was the subject of a County Court Judgement which then resulted in the charging order. As the amount was less than £5000 I think (but am not certain) that they cannot add statutory interest (which is interest set at the Court rate - currently 8% pa compound).

If I am right - & you should be able to confirm this by talking to the Court office where the judgement was obtained - then I suspect they can only add interest if the original contract provided for them to be able to do so. And the rate of interest should have been set out in the contract, or at least the basis on which it would be calculated (eg it might have said interest would be x% above bank base rate).

You need to check this & do some calculations to see whether the amount of interest is right (assuming they are correct to be adding any at all).

You could try to avoid doing this yourself by asking the agents to provide you with a detailed breakdown of how the current amount is made up - including the interest rates used; & also asking them for proof (a copy of the original contract if applicable) that they can charge interest. However, I don't think they are under any obligation to give you all this information so they may not co-operate.

You should also check the charging order document - that may have something about interest in it.

If, at the end of all this, you are liable for more than the £1500 then you could try negotiating with them but they may well refuse any offer because I presume they know they will get the full amount eventually when your house is sold.

[nansiellis2912]

Thank you so much for your advice THMAS. I have just looked up your point about the debt being less than £5000 and have found some info on a website/factsheet which confirms the same point. Note the paragraph titled 'interest' on the website I have quoted.
Thank you once again. Media URL: http://www.insolvencyhelpline.co.uk/debt_factsheets/charging_orders_in_the_county_court.php
Description: See section titled 'Interest'