Orders for sale - Shelter England
What is an Order for Sale and can I stop it?
As we always say on this site, the first thing you need to make sure is that you do not panic.
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Understanding an Order for Sale
Now that you’re calm, understand that the number of cases that result in an Order for Sale are very small as it's seen as a last resort. You will also find that an Order for Sale is mainly used by mortgage lenders who have the 'first charge’ on a property. This simply means that they are top of the list to be paid if your house gets sold, yes that means even before you!
There are other instances in which a creditor may look to apply for an Order for Sale, however, it’s not easy for them to be granted one. In this article we will unwrap what an Order for Sale is and help to calm your stress regarding this, we got you.
What is an Order for Sale?
Let’s keep it nice and simple. An Order for Sale is a court order that means you are forced to sell your home. This doesn’t necessarily mean that you have to call an estate agent and put your property on the market. It means you could be given just 28 days to settle the debt, or you must leave the property.
Even though it sounds drastic, it’s important to understand that there is a lot to consider before you get to this stage.
Who can apply for an Order for Sale?
There are essentially four groups:
- A mortgage lender of the property – i.e., your mortgage provider. This generally applies when there has been a breach in the agreement i.e., you’ve failed to maintain your payments.
- A trustee in bankruptcy – this is to be expected if you have chosen to make yourself bankrupt or have been made bankrupt.
- An owner in a joint ownership property – if any of the other parties who have a financial interest in the property does not want to sell. This option exists for the party that does want to sell to apply for an Order for Sale.
- Finally, a creditor who has secured a Charging Order – this can be anyone a debt is owed to. The debt could previously have been unsecured (i.e., a credit card, a loan etc) but is now secured through the Charging Order. As you will see this is not a straightforward process.
I’m worried about this, but am I jumping the gun?
As we mentioned earlier, this is often the very last resort. Judges have been advised not to grant an Order for Sale easily. So, even if you are on the receiving end of an application, it is not a forgone conclusion.
It’s important for you to know firstly, under what circumstances a creditor cannot apply for an Order for Sale:
- If you owe less than £1,000 and your debt is covered by the Consumer Credit Act (click here to check)
- If you received the County Court Judgement related to the debt on or after 1 October 2012
- If the court asked you to pay in instalments and you’re paid up to date. *
*If you have missed any payments don’t panic, just make sure you settle all the missing payments before you go to court for the Order for Sale. That will stop the order.
If you’re thinking that none of these apply to you, relax we’re just getting started….
More ways you can stop an Order for Sale
That’s not the end of it we still have some options to share with you. They aren’t a sure thing, but could help to influence the Judge’s decision as Judges must consider:
- Other household members: How it would impact the other members of the household should the Order for Sale go ahead? For example, if there are young children in the house, the damage it could do to them as a result of this drastic action. If there are any elderly or vulnerable people in the house or anyone with disabilities the Judge must consider how granting the order will impact them too. It’s not their fault that the situation has reached this stage. The likelihood is that the Judge will stop the order unless there is a strong reason from the creditor as to why it should go ahead despite the impact it will have.
- Paying up in a reasonable amount of time: Judges will consider if it is possible to clear the debt in a reasonable amount of time. Let’s say you’re able to pay off the debt in three years for example, the Judge may consider that a reasonable amount of time so there would be no need to grant the Order for Sale.
- Alternative options: Is there another way the debt can be cleared? As we mentioned earlier, an Order for Sale is a last resort. The Judge will be open to look at other options. So, if you have any ideas put them forward to the Judge. Make sure the option you’re suggesting is reasonable. The Judge will ensure decisions made are fair for both sides.
- Property Equity: Is there much equity in the property? If there’s little or no equity, or if you are in negative equity, it wouldn’t make much sense to grant an Order for Sale as it’s likely the creditor wouldn’t benefit from the sale.
- Oh, and one more. Joint property ownership: If your property is a joint ownership and the debt is in your name only it makes it more difficult for a Judge to grant an Order for Sale.
Make sure any joint owners attend court with you to object to the Order for Sale with their reasons.
And if all else fails....
It might be the case that none of the above works for or applies to you. We still have one more ace up our sleeve. You can ask the court to let you sell your property yourself! It may not be your ideal situation but at least it will give you time to organise yourself.
If there is enough equity in the property, you might be able to buy another property or at least find a place to rent without being rushed out of the door, giving you back a little of the control you may feel you have lost.
Don't forget to read The Real Debt Guy's final thoughts below!
The information in this article is considered to be true and correct at the date of publication.