How to Apply for a Charging Order on a Debtor's Property

A charging order is a very common form of enforcement used by judgment debtors seeking to recover money owed to them after they obtain a county court judgment. It should not, however, be seen as an instant method of enforcement as it is only in limited circumstances that you can force the sale of a debtor’s home to get your money back.

Firstly you need to be certain that your debtor owns the property. In order to do this you need to do a search for it on the Land Registry website. The cost is £4 per search and confirms:

• who owns the property
• when it was bought
• the purchase price (usually)
• the mortgage lender
• any other secured lending, such as a loan
• any other charging orders.

If two people own the property, but you have a CCJ against only one of them, you can still apply for a charging order. It may not be worth getting a charging order against a property that is in negative equity.

Procedure for Making a Charging Order

The procedure is as follows: download form N379 from the Her Majesty’s Courts Service website. Enter the amount of the judgment and how much is now owed (including any costs and interest if applicable). Include court fees that have already been awarded to you, but not the court fee for the charging order (currently £100), which you can request for addition to the debt at the hearing. You should make sure you list all the people who have an interest in the property, namely the owners, the mortgage company, other creditors and any other charging orders. If you are unsure, you should just leave this part of the form blank.

Applying to the Court

Send the form N379 with a copy of the Land Registry entry and the fee to the court. The court will then enter an interim charging order against the property. They will not make a final order without a hearing. Once you receive the copies of the interim charging order from the court (if there are other creditors) you should then send these on to the creditors at least 21 days before the hearing. The date of the hearing will be on the interim charging order.

The Hearing

On the date of the hearing the judge will decide whether or not in all the circumstances a charging order should be made. In the vast majority of cases the other creditors will not attend. The judgment debtor may attend if they dispute the validity of the order. The court will make a charging order once it has considered all the circumstances of the case, including the debtor’s personal circumstances, and having regard to whether any other creditor will be ‘unduly prejudiced’ by the making of the order.

Sale of the Property

The debtor may argue at the hearing that their family would suffer particular hardship if a charging order led to the sale of their property. This is particularly relevant in cases in which the judgment debtor is only one owner of the property. The judgment debtor can also offer payment of monthly installments which may stop the sale of the property, as long as the payments are maintained.