What is a charging order?
A charging order is when an order is placed on property or land that you own. For example if you have un-secured loans or debts that you have failed to pay your creditor may apply to the court to obtain a charging order on your house.
This means that when you sell the house some of the proceeds from the sale and ordered to pay off the outstanding debts. This basically means that what used to be an un-secured debt now becomes and secured debt against you home.
When can a charging order be placed?
Before your creditor can place a charging order against your property they must have first issued you with a CCJ (county court judgement) from which you must have failed to make payments or abided by the judgement.
A charging order (N87 form) will be notified to the land registry as a charge against your property.
Do I have to sell my house because I have a charging order?
No, there are no obligations for you to sell your house. However under special circumstances your creditor could force you to sale. However this is very rare and would only be forced under the full agreement of the court.
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If you are being faced with a charging order there may be other solutions available to free you from debt. Please contact us for free debt advice that is specific to your circumstances.
Best Wishes, Susan.
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