Charging Orders
What is a charging order?
A charging order is court procedure in the county court. Some aggrieved banks abd lenders apply for a charging order after taking you to the High Court for unsecured debts owed.
- If a creditor has a county court judgment against you ordering for an unpaid debt they can able to apply to the court for a charging order, which in effect turns an unsecured debt into a secured debt.
- The charging order takes the form of a secured debt or mortgage on a property.
- A charging turns an unsecured debt into a secured debt.
- There is a charging order court hearing in the county court before a charging order can be made
- It is in a debtor’s best interest to stop a charging order as it can seriously affect home ownership
When can a charging order be applied for?
A charging order can be made in the following circumstances:
- A bank or lender can apply for a charging order after they have successfully won a county court judgment against a debtor
- A debtor has been ordered to pay the whole debt immediately or by a certain date
- A court has ordered you to pay the judgment by installments and you have missed one or more payments.
- If you have an order to pay the debt in installments and are not behind on the payments the court should not make a charging order.
How to stop a charging order?
Under The Charging Orders Act 1979 the court has to decide:-
- The law of Charging Orders is governed under The Charging Orders Act 1979
- The court looks at the personal circumstances of "the debtor"
- Before making a charging order the court has to decide if making a charging order would disadvantage other lenders
- Whether you have any other debts,
- Whether you have equity in your house and own your home in joint names or on your own.
Before making a charging order the court make the following considerations:
- Does any member of your family have a disability or serious illness?
- Is a payment arrangement in place with your other creditors?
- What other creditors are there?
The court can order the interim order to be sent to the other known creditors but does not have to do this.
- Are there any other creditors who need to consider the charging order?
- There may be objections
- If a creditor may be 'unduly prejudiced' by the charging order being made.
- Why was a secured loan not offered in the first place?
- Are there are other ways the court could enforce payment of the debt?
- Could an attachment of earnings order be put in place instead of a charging order?
- Could a time order be put in place instead of a charging order?
- Could a county court administration order be put in place instead of a charging order for debts under £5,000?
- Could a bankruptcy order be put in place instead of a charging order for debts? If so this would treat the creditors all fairly rather than prefer one creditor?
Phone us for advice or apply online for detailed advice on a charging order
- Call us free on 0800 0789 544
- Email: info@e-insolvency.co.uk
