Debt Collection: Your judgment debtor owns a Property – a Guide to Charging Orders
February 27, 2017
If you find out your judgment debtor owns a Property then a Charging Order can be the best option. This is a method of securing the judgment debt. You can then either wait until the Property is sold; accept an instalment arrangement; apply for an Order for Sale or take alternative enforcement action.
Pros of seeking a Charging Order
- You are secured and so not vulnerable if the debtor is made bankrupt.
- Interest accrues if the debt is over £5,000
- Costs incurred are added to the judgment debt
- This may result in a realistic payment arrangement so as to avoid a charging order being made
- You can apply for an Order for Sale
Cons of seeking a Charging Order
- Payment of your debt through realisation i.e. sale of the Property could take years
- If there is negative equity you are not secured
- You may have to accept minimal instalments pending sale
- You’re unlikely to obtain an Order for Sale for a small judgment debt
- The Court has discretion not to grant an Order for Sale
The most practical tip we can give is that there may be no equity in Property and, if so, there is no point in you obtaining a charge. To avoid this, look at how many prior charges are registered; when the Property was purchased and for what price and online house price comparison sites. The other most important point is if you have obtained an order, then do not forget to register it at HM Land Registry.
How much does a Charging Order cost?
The fees involved are:
- £110 Court fee
- £3 Land Registry document fee
- £40 Land Registry registration fee
- Plus solicitors fees
For more advice on obtaining a Charging Order or enforcement of Judgments and general debt collection, please contact Jennifer White on 020 8313 1300 020 8313 1300 or email firstname.lastname@example.org.
The information contained in this article is intended for general guidance only. It provides useful information but it is not a substitute for obtaining legal advice as the articles do not take into account specific circumstances. So do please Contact US for legal advice on the issues raised.