Orders for sale - Shelter England - What is an order for sale in the UK?

An order for sale is the enforcement step that can turn a secured debt into an actual sale.

The sequence normally runs like this. A creditor gets a county court judgment or a liability order. It then applies for a charging order, which is registered against your property, first as an interim order and then as a final order.

Citizens Advice explains that if your creditor gets a final charging order, that does not mean you will have to sell your property. If the creditor wants to force a sale, it has to apply to the court for a further order called an order for sale.

The rules for enforcing a charging order by sale are in Civil Procedure Rule 73.10C and Practice Direction 73. CPR 73.10C says the court may order the sale of the property to enforce a charging order, the claimant must use the Part 8 procedure, and a copy of the charging order must be filed with the claim form.

Because it is a separate claim, an order for sale is far less common than a charging order. It costs the creditor money, it takes time, and it can be resisted. Do not read a charging order as a sale notice.

Shelter Legal sets out that a claim for an order for sale can be brought by:

• a creditor enforcing a charging order;
• a trustee in bankruptcy;
• a mortgage lender who is unable to bring possession proceedings under Part 55 of the Civil Procedure Rules;
• a homeowner where a joint owner or a mortgage lender does not consent to a sale.

That last one surprises people. An order for sale is not only a weapon used against you. It can also be the route used by a co-owner who wants out of a jointly owned property.

Which of these applies matters, because the test the court applies is different depending on who is asking and why. A creditor enforcing a charging order faces one analysis. A trustee in bankruptcy faces another, and it is much harder to resist after the first year.

There are limits, and they are worth checking carefully because they are conditional rather than general.

Consumer Credit Act debts under £1,000. Shelter Legal states that a claim for an order for sale to enforce a debt regulated by the Consumer Credit Act 1974 can only be issued where the debt exceeds £1,000, and that there is no financial threshold for enforcing other debts by order for sale. Citizens Advice puts the same point from the consumer side: a creditor cannot get an order for sale if you owe less than £1,000, including any court costs, and your debt is covered by the Consumer Credit Act.

Instalment judgments made on or after 1 October 2012. Citizens Advice states that a creditor cannot get an order for sale if the county court judgment was made on or after 1 October 2012, you were asked to pay in instalments, and you are up to date with your payments. This is the protection people most often have available and least often use. Keeping to the instalments is the defence.

Bankruptcy has its own low value threshold. Shelter Legal notes that an order for sale must not be made where the net value of the bankrupt’s interest in the property is below a set threshold, currently £1,000, and that the trustee has three years from the date of the bankruptcy to make a claim for an order for sale.

Two points to be clear about. First, none of these thresholds apply to council tax liability order debts or other non Consumer Credit Act debts in the same way, so do not assume a £1,000 floor everywhere. Second, Shelter Legal states that the Limitation Act 1980 does not apply to the enforcement of court orders, which means charging orders do not become statute barred and a claim for an order for sale can be made at any time. The six year rule people rely on elsewhere does not rescue you here.

This is the part of the process where readers lose ground without realising it.

Shelter Legal explains that the claimant must complete and submit a claim on form N208 for an order for possession and sale, that the claim is issued by the defendant’s nearest county court hearing centre, and that Part 8 of the Civil Procedure Rules applies. The particulars of claim must include a copy of the charging order or other evidence of the claimant’s financial interest, the sum of the outstanding debt, details of any prior charges on the property, the estimated sale price, and a witness statement setting out who is in possession of the property and their circumstances so far as the claimant knows them.

Your side of it works like this. The claim pack contains an acknowledgement of service. A defendant who wants to oppose the order for sale should both file the acknowledgement of service with the court within 14 days of the date of service and serve a copy on the claimant. The acknowledgement of service is where you state the grounds on which you contest the claim, including a witness statement and a financial statement if you are proposing payments. Contesting the claim includes asking for the order for sale to be postponed or suspended.

Shelter Legal is blunt about the consequence of missing it. A defendant who fails to file and serve an acknowledgement of service can attend the hearing but may be denied permission to put forward a defence. A hearing will be scheduled either way.

One more thing that catches people out. Shelter Legal notes that the court will not consider whether you are liable for the debt at this hearing. If you want to dispute the underlying debt, that is a separate application about the judgment itself, not a defence to the sale.

There is a test, and it is more balanced than people expect.

Shelter Legal states that the court is likely to order a sale unless the debt can be paid in a reasonable length of time, or the hardship caused would be disproportionate to the size of the debt and the circumstances of the creditor. It also notes that all defences available against the making of a charging order also apply, and that where there is no reasonable prospect of a purchase completing, there is no justification for postponing the claimant’s possession of the property.

Citizens Advice describes the same balancing exercise from the consumer angle. The court weighs the interests of your family against the creditor’s interest in being paid, and looks at matters including how much equity is available, the reasons the home was bought, the wellbeing of any children, and whether there are alternative ways for the debt to be paid, such as an instalment order, an administration order or an attachment of earnings. Citizens Advice also advises that all joint owners, and a spouse with a beneficial interest, should attend the hearing.

So a strong response usually has three parts: an evidenced offer of payment, a clear account of the hardship a sale would cause, and a reason why sale is disproportionate to the size of the debt.

This is where many of these claims are actually won and lost.

If the charging order was made against only one of two or more joint owners, Shelter Legal explains that the court should consider additional provisions in the Trusts of Land and Appointment of Trustees Act 1996, and that the additional considerations include the circumstances in which the charging order was created.

Section 15 of that Act sets out what the court has regard to when deciding an application, including the intentions of the person or persons who created the trust, the purposes for which the property subject to the trust is held, the welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as their home, and the interests of any secured creditor of any beneficiary.

The welfare of a child living in the property is therefore a factor the court must have regard to. That is not the same as a veto, and it is not a promise that a sale will be refused, but it is a real consideration and it should be evidenced properly rather than mentioned in passing.

Citizens Advice makes the practical point that a creditor pursuing a sale where the property is jointly owned but the debt is in one name only has a harder job, and that everyone with an interest should attend the hearing.

If the person applying is a trustee in bankruptcy rather than a creditor with a charging order, the framework changes.

Section 335A of the Insolvency Act 1986 applies where the property includes a dwelling house that is or was the home of the bankrupt or the bankrupt’s spouse or former spouse. The court must make such order as it thinks just and reasonable having regard to the interests of the bankrupt’s creditors, the conduct of the spouse or civil partner so far as contributing to the bankruptcy, the needs and financial resources of the spouse or civil partner, the needs of any children, and all the circumstances of the case other than the needs of the bankrupt.

Then comes the provision that changes the calculation entirely. Where the application is made more than one year after the estate first vested in the trustee, the court shall assume, unless the circumstances of the case are exceptional, that the interests of the bankrupt’s creditors outweigh all other considerations.

In plain English, in the first year the court balances everything. After a year, the starting point is that creditors win unless the situation is genuinely exceptional. Shelter Legal also notes that the trustee has three years from the date of the bankruptcy to make a claim for an order for sale. If bankruptcy is the route your case is on, this is the timeline that matters and it is worth getting help from a licensed insolvency practitioner or a solicitor early rather than late.

The best defence to an order for sale is usually built at the charging order stage.

• Object properly to a charging order and make an offer. Shelter Legal explains that where a debtor objects to a charging order and offers payment with a financial statement attached, a court order setting payments prevents enforcement by order for sale, and also stops statutory interest being added where applicable.
• Ask for conditions to be attached. A charging order can be made subject to conditions as to when the charge becomes enforceable. Shelter Legal’s council tax guidance illustrates the wording: a condition that the charge cannot be enforced provided the defendant maintains agreed instalments.
• Keep instalments up to date. Where a judgment made on or after 1 October 2012 required instalments and you are up to date, Citizens Advice states the creditor cannot get an order for sale.
• Apply to vary an existing charging order. Anyone with an interest in the property can apply to vary a charging order, on form N244 to the court that made it, with a witness statement and a financial statement. Court fees change, so check the current fee and the help with fees route rather than relying on a figure you read online.
• Deal with the underlying judgment if it is wrong. If you should never have had the judgment, that is a separate application to set it aside, and it needs to happen quickly.

An order for sale is not the same as being evicted that week, and there are still steps.

Shelter Legal explains that if the order for sale is granted, the court has discretion to make an order giving a date for possession at the same time, so that the property can be sold with vacant possession. The defendant can ask the court to attach conditions, including a postponement of the date for possession and sale until a specified future date, or a suspension of the order on terms.

Once the date for possession has passed, the claimant may apply for a warrant or writ of possession. The court may suspend the warrant on payment terms or until a specified date, and the application to suspend is made on form N244 with a witness statement filed at the court.

Citizens Advice describes the practical timeline from the consumer side: if an order is made and is not suspended, you would normally have 28 days to pay or to leave the property, after which the creditor can apply for a warrant of possession.

The order also directs how the money is applied. The standard court forms show the proceeds paying the costs of sale first, then any prior charges such as your mortgage, then the amount due under the charging order, with any balance going to you or, where there is a joint owner, to that owner’s share.

An order for sale is a court claim about your home, so this is a point where free specialist help is worth taking. Citizens Advice specifically says that if your creditor tries to get a charging order or an order for sale, you should contact your nearest Citizens Advice for help. Shelter, National Debtline and MoneyHelper also cover this ground, and where bankruptcy is involved a licensed insolvency practitioner or a solicitor is the right person to speak to.

The Real Debt Guy sits alongside that. TRDG shares general debt and money education, helps you understand what the documents in front of you actually say, and supports you in preparing and writing correspondence in your own name. TRDG is not FCA regulated and does not provide regulated debt advice, debt counselling, debt adjusting or legal advice.

• Ignoring the charging order stage. Objecting and offering payment, with a financial statement, is often the point where enforcement by sale can be challenged early.
• Missing the 14 day acknowledgement of service deadline. You may still be able to attend the hearing, but missing the deadline can make it harder to put forward your position properly.
• Letting instalments slip. If your judgment was made on or after 1 October 2012 and you were ordered to pay by instalments, staying up to date can be important protection.
• Turning up without figures. The court may look at whether the debt can be paid in a reasonable time, so your budget and payment offer matter.
• Only one joint owner attending. Citizens Advice says all joint owners, and a spouse with a beneficial interest, should attend.
• Arguing about liability at the wrong hearing. The order for sale hearing is not usually where the court decides whether you owed the original debt.
• Assuming the six year rule protects you. The Limitation Act does not apply to enforcement of court orders, so do not rely on the debt becoming statute barred at this stage.
• Relying on a suspended order and then missing a payment. If an order is suspended on terms, missing those terms can lead to further enforcement.

Does a charging order mean I have to sell my home?
No. Citizens Advice states that if your creditor gets a final charging order, that does not mean you will have to sell your property. Forcing a sale requires a separate claim for an order for sale.

How much do I have to owe before a creditor can force a sale?
Shelter Legal states that a claim to enforce a Consumer Credit Act regulated debt by order for sale can only be issued where the debt exceeds £1,000, and that there is no financial threshold for other debts. Citizens Advice puts the consumer facing version as being unable to get an order for sale where you owe less than £1,000 including court costs and the debt is covered by the Consumer Credit Act.

Can they force a sale if I am paying my instalments?
Citizens Advice states that a creditor cannot get an order for sale if the judgment was made on or after 1 October 2012, you were asked to pay in instalments, and you are up to date with those payments.

What is the deadline once I receive the claim?
File the acknowledgement of service with the court within 14 days of service and serve a copy on the claimant, with a witness statement and, where you are proposing payments, a financial statement.

Will the court consider whether I actually owe the money?
No. Shelter Legal states that the court will not consider whether the defendant is liable for the debt at this hearing. Disputing the debt means dealing with the underlying judgment separately.

Does having children stop a sale?
Not by itself. Under section 15 of the Trusts of Land and Appointment of Trustees Act 1996 the court has regard to the welfare of any minor who occupies or might reasonably be expected to occupy the property as their home, and Citizens Advice lists the wellbeing of children among the factors the court weighs. It is a consideration, not a bar.

Can I ask the court to delay the sale?
Yes. Shelter Legal explains that you can ask the court to attach conditions, including postponing the date for possession and sale until a specified future date, or suspending the order on terms. Citizens Advice also refers to asking the court to postpone or suspend the order.

What if my property is in my sole name but the debt is joint, or the other way round?
Citizens Advice explains the court can order a sale where the property and the debt are both in your sole name, where it is jointly owned with a joint debt, or where it is jointly owned but the debt is in one name only, with the last of those being harder for the creditor.

Does a charging order expire?
No. Shelter Legal states that the Limitation Act 1980 does not apply to the enforcement of court orders, so charging orders do not become statute barred and a claim for an order for sale can be made at any time.

Can TRDG stop an order for sale?
No. TRDG shares general debt and money education and supports you in preparing and writing your own correspondence. It is not FCA regulated, it does not provide regulated debt advice, debt counselling, debt adjusting or legal advice, and it cannot promise a court outcome.

The Real Debt Guy has completed the DipFA Level 4 qualification and shares general debt and money education for UK consumers. This article is general information and education only. It is not personal financial advice, regulated debt advice, debt counselling, debt adjusting, legal advice or insolvency advice. The right option depends on your circumstances, and rules can change.