This document discusses charging orders, which allow a judgment creditor to secure a debt against a debtor's property. It provides details on: - Obtaining an interim charging order without notice and making it final after notice and a hearing. - Charging orders securing the debt and making the creditor secured against the property. - Advantages like encouraging payment or settlement offers to prevent the order being made final. - Potential issues like objections, property transfers, or insufficient funds from a forced sale.

1. CHARGING ORDERS
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2.  Methods of Enforcement
 What is a charging order/ process involved in
obtaining one
 Why Charging Orders?
 Issues you may face
 Orders for Sale- the pitfalls
 Conclusion
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3.  Warrant of Control
 Attachment of Earnings
 Charging Order
 Bankruptcy
 Orders to Obtain Information
 High Court Enforcement (non CCA regulated)
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4.  A charging order provides the judgment
creditor with the equivalent of a mortgage
over land
 The consequence is that the judgment
creditor will become a secured creditor
 The order is obtained in 2 stages- the interim
and the final charge
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5.  Process
 Obtain Office Copy to confirm property is owned
by your Defendant
 Check other creditors at this stage and make an
informed decision as to whether you wish to
proceed
 Application needs to be completed (N379)
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6.  An Interim charging order is then obtained
without notice (with a hearing date for the
interim to be made final)
 All creditors/ joint proprietors must be
served with notice of the hearing
 Interim should be registered at this stage
with Land Registry
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7.  Certificates of Service must be lodged at
court prior to the hearing
 At the hearing the court will make the interim
order final or will discharge it
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8.  Secures your debt against a property
 You can still enforce via another method of
enforcement and still have the benefit of the
charge
 You are able to negotiate a monthly payment
plan to run alongside the charge
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9.  There is no need to personally serve any
documentation on the Defendant and
therefore not reliant on court bailiffs for
service
 May encourage a Defendant to offer a lump
sum settlement or pay in full to prevent the
charge being made final
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10.  As property prices increase and as long as the
Defendant continues to reduce their
mortgage there is more chance of you being
paid in full
 Interest can continue to be claimed from the
date of Judgment on matters over £5,000.00
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11.  The Co-owner is served and therefore may agree
to settle the debt on behalf of the Defendant
 More communication from Defendant/ joint
proprietor than any other method of enforcement
 Costs of obtaining a charging order are relatively
low compared to bankruptcy and are not
dependant on the size of the debt
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12.  Our Statistics for the past 12 months show:
 £10,379,506.00 of debt secured by way of charging
orders in the past 12 months
 Of which £737,989.82 has been recovered
 Creditors are increasingly using this method of
enforcement after failed attempts at other
enforcement and now look to securing a charge on
new matters prior to considering other enforcement
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13.  Should the property be repossessed even with
your charge secured, the mortgagee is under
no obligation to pay over the surplus funds-
you then have to consider alternative
methods of enforcement
 The property may be sold before an interim is
obtained and registered therefore you would
have incurred costs of issue
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14.  Objections by third party or joint proprietor to
register the interim
 Objections raised by Defendant to obtain a final
charge- usual reason, property transferred as
part of divorce settlement and transfer not
showing at Land Registry
 The process can be a long drawn out one as it
does not guarantee payment and you cannot
predict the future
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15.  Once a Charging Order has been obtained, it is for the creditor
to decide whether to issue a claim for an order for sale.
Obtaining the final charge is not an automatic right to obtaining
an order for sale. Separate proceedings must be commenced
 To do this you will need to obtain a current valuation (drive-by)
of the property, details of all other creditors, and redemption
figures for all prior charges
 Once all enquiries have been made, it may well be that there will
be insufficient funds available to clear your charge, therefore
consider the cost implications and look at prior charges
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16.  The court may be reluctant to grant an order for the
following reasons:
 Low balance outstanding under the charge
 Hardship caused to the Defendant/ family
 If the Defendant has offered a payment proposal, the
court may postpone the order for sale on terms
 Property may be tenanted, have a short lease, be in
need of repairs- all could prove costly once the
property is in possession
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17. Future Changes:
 If rules eventually change regarding High
Court Enforcement and Consumer Credit
regulated matters, then we may well see a
shift in enforcement practices in the future
 ANY QUESTIONS?
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