Charging Orders - procedure and process

[Dahlia M]

Hello all

 

I have a lot of practical experience of the Charging Order process from the creditor's perspective, and I'd be more than happy to provide advice and guidance to anyone who is faced with the prospect of having an application issued against their property. If you need any info on the process itself, the documentation, Court hearings etc. then please ask away and I'll do my best to help

[Dahlia M]

Ganymede put it in a nutshell about the ability to object. Anyone who has a registered interest in the property can object if they want to, and they ALL have to be served with copies of the application and Land Registry documents in order to make them aware of the application, therefore they all have the opportunity to object. I have processed numerous CO applications, for sole and joint owners, with a roughly equal success rate (success from the creditor's point of view).

[Dahlia M]

Maximus - it's back to the Court for another hearing. No Order for Sale would be automatically granted by the Court. You would have the opportunity to lodge arguments against the application and they would have to be considered by the Judge. Of course there is also the question of proportionality - i.e. would the Court see fit to grant an Order for Sale when the debt is relatively small? There are a lot of circumstances to take into account in each individual case.

 

However, I would stress that the first step is to try to avoid a CO being made in the first place - and the way to go about this would depend on whether or not the process has already begun...

[Dahlia M]

I think a lot of people would be very interested in knowing how an unsecured debt can so easily become a secured debt.

 

If you have debts and you have assets - be very careful. In my experience of carrying out litigation on behalf of creditors, if the debtor defaults on a payment plan, and they have an interest in property/land, the creditor is highly likely to take further steps to secure the debt - even if this means they cannot get their hands on the money for quite some time!

 

Once a creditor has obtained a County Court Judgment they have a number of enforcement options available to them - and if they know that you have an interest in property they are highly likely to go for that as security.

[Dahlia M]

Yes, the debtor must be served with a copy of the application and other relevant documentation to advise them that the application has been lodged with the Court. The creditor must also provide copies of the same documentation to ALL other interested parties (mortgage co, other secured lenders, anyone else with a financial interest in the property). Once this has been done the creditor has to send documents to the Court called Certificates of Service, as evidence that they sent copies of the application to all interested parties. If they fail to provide you with copies of the application documents then the Judge can strike out their application (i.e. bin it!) as they did not follow correct procedure.

 

It is always worth contacting the creditor and/or their solicitors first, though, just to see if there is any way of holding off the application and working out a settlement of some sort.

[Dahlia M]

There are TWO parts to the CO process: Interim and Final. Interim Charging Orders are granted automatically by the Court. All the relevant parties are notified of this and sent a copy of the Interim Charging Order, which the creditor will then register at the Land REgistry. However, this is only the first stage. Once an ICO has been granted, the Court will set a date for a hearing to determine whether a Final Charging Order should be granted. You will have at least 21 days notice of the hearing, which is enough time to prepare your case against the granting of an Order. This is where you will need advice tailored to your particular circumstances. You must attend the hearing. The Judge will consider your arguments and make a decision. It may be that a further Order is granted but on certain conditions rather than a simple yes or no.

[Dahlia M]

I'm afraid all I know is that once a CCJ has been obtained a creditor is entitled to begin the charging order process. Sorry if that doesn't help

[Dahlia M]

I can't give debt advice, only info regarding County Court processes and enforcement issues.

[Dahlia M]

Exactly. It is still unsecured at the moment. It will only become secured if and when a charging order is granted by the court following the judgment that has been obtained.