Charging Orders are court orders to enforce County Court Judgements. If a creditor obtains a County Court Judgement and you do not keep to the payments of the court order, a court can order a Charging Order to be placed on your property.
The creditor can apply for a Charging Order if they have a County Court Judgment (CCJ) against you and you have not kept to the terms of the order. The County Court has no power at all to grant a charging order on instalment CCJs if there is no default.
The High Court has the discretionary power to grant a charging order when there is an instalment order agreed and the debtor is NOT in default.
Creditors will very often refuse an instalment offer and request a "forthwith" judgement, which means that you are ordered to pay the whole amount by a certain date. If you do not pay the debt in full by that date the creditor can apply for a Charging Order.
There are two stages to the procedure of charging orders; the interim order and the final order. First, the creditor has to apply to the court for an interim order. Form N379 must be used for a charging order on land or property and Form N380 for a charging order on securities. The creditor must sign the statement of truth on the form and return it to the court where the judgment was obtained or, if the claim has since been transferred to another court, to the new court. If the asset to be charged is land or a house, the creditor should also register a caution on the property at the Land Registry. This means that the property cannot be sold without the creditor knowing about it.
When the court has received the application, the judge will consider it to see if there is a sufficient case for an interim order. There is no hearing but the interim order must include the date set by the court for a hearing for the final order.
The interim order can be served by the court by first class post or personally by the creditor not less than 21 days before the date of the hearing. If the creditor serves it, s/he must file a certificate of service not less than two days before the hearing or produce one at the hearing.
If you object to the court making a charging order, you will need to file written evidence to set out your objections. You can also request that the hearing take place at your local county court.
The onus is on you (the debtor) to show 'good cause' why the Charging Order Interim should not be made final.
The Charging Orders Act 1979, s.1(5) directs the Court to consider: "All the circumstances of the case, and in particular any evidence about the personal circumstances of the debtor and whether any other creditor would likely be unduly prejudiced by the making of the order".
Some of the arguments you could use are:
There may be other arguments that you could use and each case will depend on individual circumstances.
People who have received Interim Charging Orders and would like to discuss their options can call our advisers today. If we feel you have a case, we will help you with the court forms and represent you at court, if necessary.