I Have a Charging Order – What’s Next?

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If you have obtained a CCJ against your judgment debtor, it means that the court has ordered the debtor to pay back the money owed to you. A court order means they have to either:

make regular payments to you
pay off the whole debt by a certain date

When you have a court order against your debtor, you can apply for another court order that secures the debt against the home or other property the debtor owns. This is called a ‘charging order‘. If the debtor owns their property jointly with someone else but the debt is only in their name, you can only get a charging order for the debtor’s share of the property. This method of enforcement is a means of securing a judgment debt against the debtor’s property by placing a ‘charge’ against the property concerned.

Although it won’t automatically result in a payment it will secure the judgment debt against the debtor’s property and when the debtor comes to sell the property or re-mortgage it, the charge will be paid from any available equity.

Alternatively, the judgment creditor can take a pro-active approach and apply to the court for an Order for Sale to force the sale of the debtor’s property. This application is usually made where the value of the debt is quite high, and the debtor has considerable equity in the property or where the charged property is not the family home.

Although a charging order is usually taken out against a person’s house, it can be obtained against any form of immovable asset. A charging order can therefore also be obtained against a second home, a holiday home, a vacant plot of land or stocks and shares as well.

To apply for a charging order, you can use our online application and we will take care of the management of your application. Our form follows the format of form N379 for an application for a charging order against land or property or a form N380 for an application for a charging order against securities).

If you make the application using our online form you will pay us the fee online. In making the application you will the following information handy:

details of the judgment, including when it was made, at what court and under what claim number.
the full name and address of the judgment debtor.
the amount of the judgment, including any costs and interest; the amount owing at the time of your application, again including any interest, and the total amount of any instalments, if any, which have not been paid.
the address of the property or land on which you want to impose a charge.
information as to whether the judgment debtor owns the property solely or jointly with someone else, and evidence to prove it.
details of any other creditors you know the judgment debtor has, that is, their names and addresses and the nature of their debt.
details of any other person who has an interest in the property.
details of any additional reasons, apart from the fact you are owed the money, you want the court to consider when deciding whether or not to grant your application, and details of sources of information.

Some, but not all, land or property will be registered at HM Land Registry. If the property is registered, we will obtain a copy of the register and attach that to the application we make on your behalf.

It should always be borne in mind that judges will exercise their discretion when considering an application for a charging order. It is not an automatic process, and it may take some time for the necessary hearings and considerations to take place. This, along with the fact that the charging order provides ‘security rather than ‘payment’ means that this is not a form of enforcement that should be taken if the creditor is looking to get their hands on the money they are owed quickly. This is a form of enforcement that is more suitable for those who are prepared to wait for their money.

In addition, if there are already a number of other creditors with ‘charges’ registered against the property then it may be the case that by the time any sale proceeds have been distributed to other secured creditors there may be little left to pay the money you are owed.

When the time comes for your application to be heard before the court, the judge will consider your application and any evidence the judgment debtor or any other person served with your application has filed.

If objections have been raised, the judge can deal with them there and then, or give directions for a hearing later on. Directions tell you what you must do to prepare for that hearing. If the judge feels that the objections are justified, your application may be dismissed. If that happens you may not be able to recover the fee you paid to issue the application, and you may have to pay the costs of the party who raised the objections.

However, if your application is successful, any fees you paid are usually recoverable from the judgment debtor by being added to the judgment. It is a requirement that notice is given to the Land Registry when any interim or final charging order is made and Shergroup is handling the application for you we will take care of this.

Summing-up

As of October 2012, it is now possible to apply for and obtain a charging order even in circumstances where an instalment arrangement is in place and the judgment debtor is up to date with their payments. However, even though the law has been updated to this extent it is not possible to apply for an Order for Sale if the judgment debtor is up to date with their instalments. If you have a Charging Order in hand and want to enforce it contact us. A Shergroup Legal Advisor will be able to help you on all these matters so for more information contact Shergroup today. We’d be happy to enforce your order and help you get your money back.