A Charging Order is one of several options a creditor has to enforce a CCJ. It works by securing an unsecured debt against a debtor's property or other assets.
A Charging Order is an order of the court which places a 'charge' on a debtor's asset, such as a house or a piece of land. This allows the creditor to securitise the debt against an item of value and acts as a safeguard if you fail to repay the debt.
If the asset is sold or repossessed, then the charge has usually to be paid first before any of the proceeds of the sale can be given to the debtor. If there are already charges against the property, such as a mortgage, this will be paid first.
If you have a charging order against you them it does not mean that you have to sell the property.
The court could also suggest that the charge is put on another asset of value which does not have monies owed, such as a high-value car or a holiday home.
The application for a Charging Order is initially dealt without a hearing, by a district judge. If the district judge agrees that you should be subject to a charging order then they will:
Creditors can apply for a Charging Order against you after a High-Court or County Court Judgement which has failed through non-payment or if you break the terms of the agreement.
The court will decide whether it is reasonable to make a charging order. Under the Charging Orders Act 1979 the court has to consider all the circumstances of the case, and ensure that it will not unnecessarily benefit one creditor over another.
If you have multiple debts, making a charging order in favour of one creditor would give them unfair priority over other unsecured creditors, particularly if you already have a payment plan in place with one of them.
The court can order the interim order to be sent to the other known creditors but does not have to do this. This means that your creditors will not know about the hearing. You could raise a written objection if you think a creditor may be unduly prejudiced by the charging order.
If the Court enforces payment of debt then you can ask for an instalment order which allows you to make monthly payments to your debts or for an attachment of earnings order so that the instalments would come directly from your wages.
If you are worried about being subject to a Charging Order, then please call us on 0800 048 1779 for further advice or submit the form on the right of this page. We can help make an offer that will be affordable to you and acceptable to your creditors.
Stopping a planned repossession is a complex legal process. There cannot be any guarantees of success. It is NEVER too late to start to oppose the repossession and the sooner you start the better the chance of a successful outcome. To successfully oppose repossession in Court we would always recommend professional legal representation to present your case.