Warning: The creditor pays the court £100 for the charging order application, The creditor will add this to your debt, and can also add other court costs.

Charging Orders

A Charging Order is a method available to a Creditor has to enforce a Court Judgment.

A Court Judgment sets out the terms by which a debt is to be paid, usually by a certain date or by installments. A creditor may look to a Charging Order if these terms are not adhered to.

A charging order works by securing an unsecured debt against a debtor's property or other assets; this is called placing a charge on the property or asset. A charging order will not normally get a creditor their money immediately. What it means is that if the property/asset is sold, the charge has to be paid to the creditor before any of the proceeds of the sale are passed on to the seller.  A Charging Order does not force the sale of a property, however if the client does not keep up with their payments, the creditor may ask the court to issue an Order of Sale.

If the debtor has other assets of value, the court can put a charge on these instead. If there are already loans secured on the property before the charging order is registered, for example a mortgage, then the original loan/mortgage will be repaid first.

When can someone apply for a Charging Order against me?

After a high court or county court judgment when:-

• You fail to pay the full amount of the judgment when it was due; or
• You fail to pay one or more of the installments due under the terms of the judgment.

Interim and Final Charging orders

When a creditor applies for a charging order the court will initially issue an Interim Charge, This will:-

• Give details of the creditor that has made the application along with the amount outstanding.
• Set a date, time and location for a hearing to consider whether to make a Final Charging Order.

How Harrington Brooks can help?

Before the Charging Order

In some cases, current clients originally approached us with multiple unaffordable debts and the threat of a charging order being placed on their property; and we have managed to avert it.

We'd look at your financial situation, and produce what's called a common financial statement. This is a document which your creditors and the courts will agree is a fair reflection of your income and essential expenditure and you ability to repay this debt and other debts.

Any money you have in excess of essential expenditure is called disposable income, and only this needs to go towards unsecured debt repayments. This means you're treating each creditor equally and not paying only the ones acting most aggressively.

Once we've agreed upon a realistic amount you can afford each month, we'd propose you enter into a debt management plan, or subject to qualification, an IVA.  We'd contact the creditor taking the legal action (and the court if necessary), explaining you are now taking steps to making reasonable offers to repay your debts. How early we can intervene is key to the success.

If the charging order is prevented or set aside, this debt would then be included as part of the financial management plan or IVA.

Charging Order Already Issued

If it is not possible to stop the charging order or, if one is already in place before a client contacts us; we can still help.

Again, the common financial statement is drawn up but we may need to prioritze the debt over other insecured debts. A debt subject to a charging order can't be included as part of an IVA as a creditor; only as an expenditure item.

Once a charging order has been made, the only way to get it removed is to repay the debt.

If you're concerned about the possibility or consequences of a charging order, please contact us for advice.

Are You Currently a Harrington Brooks Client?
Please see - Client Support » Interim And Final Charging Orders