Charging Orders UK: How to Stop One

If court action has already started, start here:

• If the judgment is recent, read What Is a CCJ? County Court Judgment UK Guide.
• If you have been leaving letters unopened, read Should You Ignore Debt Collection Letters in the UK?.
• If you are worried about enforcement agents as well, read Bailiff Powers in the UK: Your Legal Rights Explained.
• If the instalments are unaffordable, read UK Token Payments: 8 Steps to Manage Debt Repayments.
• If you are not sure the debt is even correct, read Do You Have to Pay Debt Collectors? UK Legal Rights.
• If the pressure has crossed a line, read Debt Collector Harassment UK: Know Your Rights & Get Help.

Because your home may be involved, this is a topic where getting proper help early genuinely changes outcomes.

A charging order is not a first step. It sits after a court judgment.

The usual route is: missed payments, then a default notice, then a Letter of Claim, then a county court claim form, then a judgment, and only then enforcement. A charging order is one of the enforcement routes available once judgment exists.

GOV.UK explains that if you get a county court judgment for debt, the court has formally decided that you owe the money, and that if you ignore the judgment you could be taken back to court and forced to pay.

That is why the CCJ stage matters so much. The earlier you deal with the paperwork, the more options you tend to have.

Many people believe that as long as they keep paying their CCJ instalments, a charging order cannot happen. That used to be broadly true. It changed.

Citizens Advice explains the difference by the date of the judgment:

• If the creditor got the CCJ before 1 October 2012, they can only apply for a charging order if you missed the deadline for paying the whole debt, or you are paying by instalments and have missed a payment.
• If the creditor got the CCJ on or after 1 October 2012, they can apply for a charging order straight away, even if you are up to date with payments under the CCJ.

So the first thing to check is the date of the judgment. It changes what the creditor is allowed to do.

Citizens Advice explains that the application always has two stages, and the creditor first has to get an interim order. The court usually grants an interim order to stop you selling your property without your creditor knowing before the final order can be made.

An interim charging order is usually made by a court officer without a hearing. Citizens Advice says there will only be a hearing with a judge if you are up to date with an instalment order that was made before 1 October 2012, or the court officer thinks there is a reason the application should be considered by a judge.

If the decision is made by a court officer, your creditor has to send you a copy of the interim order within 21 days of the order being made.

When it arrives, check:

• the date on the order;
• the debt and amount it relates to;
• the property described;
• whether the property is in your sole name or joint names;
• any hearing date given.

If the court grants a final charging order, Citizens Advice explains that if you sell your property, you must pay your creditor back out of the proceeds. A final charging order does not mean you have to sell your property.

At the hearing, the judge will look at the evidence you have sent explaining why you do not want a charging order to be made, look at the arguments made by your creditor, and decide whether to make a final charging order after considering both sides.

Citizens Advice also explains that you can ask the judge to attach conditions to the final charging order, which makes it harder for the creditor to force a sale.

That is why turning up, or at least filing a written objection, matters. Even where the order is made, the terms may not be the terms the creditor asked for.

Joint ownership does not automatically protect you, but it does limit what the creditor can secure.

Citizens Advice explains that if you own your property jointly with someone else but the debt is only in your name, the creditor can only get a charging order for your share of the property. That share is known as your interest.

This is an area where the detail of ownership, equity and any existing mortgage really matters, and where you should get help from a qualified debt adviser or a solicitor.

This is the part many homeowners worry about most, but it is a separate court step after a final charging order.

An order for sale is when a creditor asks the court to force the sale of a property so the charging order debt can be paid from the proceeds. It does not happen automatically just because a charging order exists.

If you receive order for sale papers, do not ignore them. There can be short deadlines, and the court will look at the circumstances before deciding what happens next.

For a full explanation of the process, read What Is an Order for Sale in the UK and Can I Stop It?.

There are limits, and they are worth knowing.

Citizens Advice says a creditor cannot get an order for sale if both of the following apply:

• you owe less than £1,000, including any court costs; and
• the debt is covered by the Consumer Credit Act.

It also says a creditor cannot get an order for sale if the county court judgment was made on or after 1 October 2012, you were ordered to pay by instalments, and you are up to date with those payments.

That last point matters. Keeping to the instalment terms of the judgment can still protect your position even after a charging order exists.

No, not where the firm is FCA regulated.

The FCA rules say a firm must not threaten to commence court action, including an application for a charging order or an order for sale, in order to pressurise a customer in or approaching arrears or in default to pay more than they can reasonably afford.

The rules also say a firm must not take disproportionate action against a customer in arrears or default, and in particular must not apply to court for an order for sale, or submit a bankruptcy petition, without first having fully explored more proportionate options.

If a letter reads like a threat designed to make you find money you do not have, keep it. That letter may be the basis of a complaint.

Sometimes, but it is not simple and it is not automatic.

Citizens Advice refers to using the N244 court application form if you want to ask the court to set aside a final charging order.

Realistically, this is a point where you should get help from a qualified debt adviser, an approved debt adviser or a solicitor. The grounds are technical, there is a court fee, and getting it wrong can waste both time and money.

Where the underlying judgment itself is wrong, for example if you did not receive the original claim or you do not owe the money, the judgment stage may be the thing to look at rather than the charging order.

Use this checklist:

1. Find the date of the county court judgment.
2. Check whether it was before, on or after 1 October 2012.
3. Check whether you were ordered to pay instalments, and whether you are up to date.
4. Read the interim charging order and note the date it was served.
5. Diarise 28 days from that date for your objection.
6. Check whether a hearing date has already been set.
7. Put your objection in writing to both the court and the creditor.
8. Gather evidence: ownership, equity, other secured debts, household circumstances, dependants, health.
9. Use the TRDG Budget Planner to set out what you can realistically pay.
10. Get help from a qualified debt adviser or solicitor, because your home may be involved.

Attend the hearing if there is one. If you cannot, tell the court and ask for another date.

What is a charging order?
A court order that secures a debt against property you own, applied for by a creditor who already has a county court judgment or other court order against you.

Does a charging order mean I have to sell my home?
No. Citizens Advice says a final charging order does not mean you have to sell your property. It means that if you sell, you must pay your creditor out of the proceeds.

Can they still apply if I am paying my CCJ?
If the CCJ was made on or after 1 October 2012, a creditor can apply straight away, even if you are up to date with payments.

How long do I have to object?
After being served with an interim charging order, you have 28 days to object to a final charging order, in writing, to the court and the creditor.

What if a hearing has already been arranged?
Send your objection to the court and the creditor at least 7 days before the hearing.

Can I make it harder for them to force a sale?
You can ask the judge to attach conditions to a final charging order, which makes it harder for the creditor to force a sale.

When can a creditor not get an order for sale?
If you owe less than £1,000 including court costs and the debt is covered by the Consumer Credit Act. Also where the CCJ was made on or after 1 October 2012, you were asked to pay instalments and you are up to date.

What if the debt is only in my name but we own the house jointly?
The creditor can only get a charging order for your share, known as your interest.

Can a company threaten a charging order to make me pay more?
The FCA rules say a firm must not threaten court action, including an application for a charging order, to pressurise a customer to pay more than they can reasonably afford.

The Real Debt Guy has completed the DipFA Level 4 qualification and shares general debt and money education for UK consumers.

This article is for general information and education only. It is not personal financial advice, regulated debt advice, debt counselling or debt adjusting.

The Real Debt Guy is not FCA authorised. The Real Debt Guy is a letter-drafting and administrative support service.