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What you should do about Charging Orders?

When you are dealing with debt of any type, you may find yourself facing a charging order. A charging order is ordered by a creditor who is seeking repayment of the debt you owe them. If they already have a county court judgement sworn against you, they can apply for a charging order that will enforce the judgement the courts already have against you to make you pay. The charging order is a form of security for the debt, making it secured as if it was a mortgage on your home. The charging order cannot be made unless there is a hearing which is required, and you can fight the charging order to keep it from being placed against you by using numerous different arguments.

Your creditors can apply for a charging order against you after they have a county court judgement placed against you and if you have failed to pay off the whole debt right away or by a certain date or if you have missed one or more court ordered installment payments on your debt. If you have been making your debt payment installments and are not behind on your payments, the courts are not allowed to make a charging order against you. In the event that a charging order is made against you by mistake, you must go to the hearing and present evidence showing that you have been making the payments as ordered. Keep an eye on all of your debts and county court judgements. Some creditors will ask the court to change the terms of the judgement from an installment plan to a forthwith judgement. If this happens, the creditors can easily apply for a charging order to recoup their debt and you need to talk to a debt advisor for advice.

There are two stages creditors must go through in order to get a charging order. They must apply for the order and an interim order will be made by the court until the judge decides whether or not to make it permanent. You will be advised of this so you can attend the hearing. The creditor may also ask that a ‘caution’ on your property be made so that you cannot sell the property before the court hearing. The second stage is the hearing before the judge, where you will be allowed to present evidence as to why the court should not make the charging order against you.

You can stop the charging order by asking the court to review your particular circumstances. They will look at:
  • Whether or not a member of your family has a disability or is seriously ill

  • If the charging order will favour one creditor over all of the others that you have payment arrangements in place with

  • Whether or not the creditor requesting the charging order lists all of the other creditors they know of in the charging order

  • If other creditors have been notified of the interim charging order. This is something you can use in your objections if you think the creditor charging you is ‘unduly prejudiced’

  • Whether or not the creditor could’ve given you an unsecured loan when you took it out

  • Other options of paying off the debt that the court could enforce.

  • If your family would be forced to endure undue hardship from the charging order

  • If your home is worth less than the mortgage and it is not likely the creditor will get paid even if the house is sold

  • Your debt is small compared to the equity in your home

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