What is a Charging Order
A charging order is a method of enforcing a judgment debt. Where the Court orders a person (the debtor) to pay money to another person (the creditor) in satisfaction of an outstanding debt, the creditor can make an application to the Court for a charge over the debtor’s property in order to secure the payment of the money owed. Such an order by the Court is referred to as a charging order.
A charging order must specify the following:
The subject property of the charge
Interest held by the debtor
Any conditions of the charge
Date when it becomes enforceable
Any other matters as specified by the Court
Property that can be the subject of a Charging Order
The property that can be the subject of a charging order includes the debtor’s beneficially interest under a trust or his or her interest in any of the following assets:
Shares of a company (except Building Societies) which was formed in England and Wales
Shares of a company that was formed outside of England and Wales or of any State outside of the United Kingdom which was registered in England and Wales
A charging order needs to be registered against the title of the property and in the case of land an application must be made to the Land Registry in order for the charge to be secured against any disposition of the property as required by the Land Charges Act 1972 and the Land Registration Act 2002.
A person whose property is the subject of a charging order can make an application to the Court to vary or discharge the order.
For more information on:
- Order for Sale
- Powers of the Court
- A necessary safeguard
- Charging Orders and Council Tax
- Charging Orders and Consumer Credit Agreements