Charging Orders

 A charging order is a form of charge taken over a judgment debtor’s beneficial interest in land (if the debtor is a joint owner) or against the legal estate (if the debtor is a sole owner), securities or certain other assets. A charging order over land is subject to any prior charges on the property, such as a mortgage. This article will focus on obtaining a charging order over land. This method of enforcement can be effective if you are aware that the judgment debtor owns a property.

Once a charging order has been obtained, it does not produce any money in and of itself. In order to realise money in the near future, the judgment creditor is required to take a further step to obtain an order for sale. Alternatively, the judgment creditor can wait until the property is sold. Either way, the judgment creditor will hope that there are sufficient funds raised from the proceeds of sale to satisfy the judgment debt, once any prior charges registered against the property have been satisfied.

There is a two-stage process to obtaining a charging order:

1. An application is made for an interim charging order

Since 6 April 2016, in the County Court, all applications for a charging order must be made in the County Court Money Claims Centre unless the charge sought relates to a fund in court, in which the case application is made to the County Court where the order or judgment was made. I will consider applications which are made and stay in the County Court Money Claims Centre in this article. Form N379 is the appropriate form to use and the court fee payable is £119.

Applications made to the County Court Money Claims Centre will initially be dealt with without a hearing and if the court is satisfied, an interim charging order will be granted. The interim charging order, together with copies of the application notice and any document filed in support must be served on various people, including the judgment debtor, within 21 days of the date of the order. These individuals to be served include any co-owners of the property, the judgment debtor’s spouse or civil partner (if known) and such other creditors as may be identified in the application notice or as the court directs.

Further, for County Court Money Claims Centre cases, the judgment creditor must file a certificate of service in relation to each person served and a statement of the amount due under the judgment including further interest and costs within 28 days of the date of the interim charging order.

2. An application is made for a final charging order

Anyone who has been served with a copy of the interim charging order has 28 days to file written evidence stating the grounds of objection. If no objection is received within the 28 day period, then the application for the charging order to be made final will automatically be considered by a judge or legal adviser. Provided that the procedure has been complied with, a final charging order can be made without a hearing. Conversely, if an objection is received, the matter will more than likely be referred to the judgment debtor’s home court and listed for a hearing.

If a final charging order is made, the following individuals must be served with a copy: the judgment debtor, such other creditors as the court may direct and certain other parties i.e. the same parties as were served with a copy of the interim charging order.

Alex Medford is a Solicitor in our Dispute Resolution Department and handles a range of contentious litigation matters from start to finish, including dealing with personal and commercial debts, breach of contract and employment disputes. In the event that you would like to discuss any issue raised in this article further with Alex he can be contacted at amedford@ansons.law or 01543 431197.

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