Charging Orders

A Charging Order is an Order made by the Court when a Creditor obtains a County Court Judgment (CCJ) against you and that judgment remains unpaid. It is registered against Property, such as a house or a piece of land, at HM Land Registry.

The reason for this is that the Order will secure the Debt which you owe under the CCJ by ensuring that, whenever the Property in question is sold, the Debt will be repaid immediately after your mortgage or any other secured loans are repaid.

A Charging Order does not force you to sell your home and can only be made if you have not fully repaid the amount which you owe under the CCJ.

A Charging Order can be placed on a Property that is in either sole or joint names, however, the Charging Order will only be applied to your equitable share of the property and not the property as a whole, if the debt is in your sole name.

Your Creditor will need to apply to the Court for a Charging Order. A Judge will then decide, based on the evidence which both you and your Creditor provide, whether an Interim Charging Order should be made.

The Court will take your personal circumstances into consideration and whether or not making a Charging Order against your Property would disadvantage any other Creditors that you may owe money to.

If the Judge is satisfied that a Charging Order is appropriate, the Court will make an Interim Charging Order and send out a copy of form N86 to the debtor.

If an Interim Charging Order is made, the Court will then need to hold a Hearing to decide whether or not it is reasonable to place a Charging Order on a Property before it can be finalised. You may attend that Hearing and put any case which you may have to the Judge, who will then make his decision as to whether or not the Order should be made final.

If the judge decides to finalise the Order, you will receive Form N87 (Final Charging Order) which will also be sent to the lender who will then inform the Land Registry.

Although it is rare and a lengthy process, Creditors can apply to the Court to force the sale of a Property. This cannot take place without a Judge’s agreement. More often than not, Creditors are prepared to wait for a sale of a Property rather than forcing a sale, and the Courts will not generally allow the forced sale of a Property except in very rare circumstances.

It is possible to pay off the amount of the Charging order and remove the order from the property. If the debt is fully paid off, you can then apply to the court for a ‘Certificate of Satisfaction’ from the original CCJ. The lender should then inform the Land Registry that the Interim and Final Charging Orders have been removed.