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Tackling your debts

What is a Charging Order?

Posted 25 September 2015 by Christine Walsh

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Received a letter about a charging order? Our no frills guide will explain what a charging order is and your options for dealing with it.

What is a Charging Order?

When can a creditor get a charging order?

There’s no way that a lender should be sending you a charging order out of the blue. They’d only be able to get a charging order against you if they have already succeeded in getting a CCJ against you, so you would be aware of the debt by the time it gets to this stage.

Now things can get a little complex with charging orders. There are two situations that you could find yourself in, and the important date to remember here is the 1st October 2012. If your lender was given the CCJ against you before the 1ST October 2012, then they would only be able to get a charging order if you have actually broken the terms of the CCJ.  

If they were given the CCJ against you after the 1st October 2012, then they would be able to get the charging order against you at any point, even if you were sticking to the terms of the CCJ.

Order to obtain information

When a creditor asks for a charging order they must provide the court with details about your financial situation, and in some cases, provide proof that you have not kept to the terms of your CCJ. Now they may not actually have the information that they need, so it’s possible that they may take you to court simply so that you can provide the information that they require.

If this happens then you would be asked lots of questions about your financial situation and have to swear on oath that you were telling the truth.

How is a charging order put in place?

There are two stages to a charging order being put in place – they’re called the interim order and the final order.

The interim order

The interim order is put in place before the charging order is actually granted and all this does is make sure that you don’t go ahead and sell your property without letting the creditor know.

Interim charging orders are normally made automatically through the court simply to prevent people from avoiding putting anything towards the debts from the sale of their house. You will be made aware of an interim charging order and while it’s in place the court will set a date for the hearing to decide whether a final charging order will be given.

You should have at least 21 days to prepare for this hearing and it’s really important that you attend as this is your chance to make any arguments that you have against the final charging order being granted. If you didn’t attend then a final charging order would be granted automatically. If you have something to say then you must send the court these arguments in writing at least seven days before  the date of the hearing. If you can’t attend the hearing then you can apply to the court for a change of date using the N244 form which you can download from the Ministry of Justice’s website.You will need to explain on the form why you can’t make it.

Remember that you’re not left alone to put your arguments together. If you’re not sure how to put your side of things across to the judge, then get in touch with the Citizens Advice Bureau who have experienced advisors that can help.

The final order

After the judge has heard from you and the creditor they will then decide whether a final charging order should be made.

If the creditor is successful in getting the final charging order then this means that if you sold your house then you would have to pay them back from the money.

That’s enough info for one day. Tomorrow we’ll have a look at the arguments that can be made against a charging order and what it means for you if a creditor is successful in getting the charging order against you. 

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.