Charging Order

A Charging Order is a remedy after judgment which a lender can seek from the courts once it has judgment.

The Charging Order effectively places a sort of mortgage on your property at the direction of the court. In fact, it is a charge over the net sale proceeds, so usually has little impact until you sell your property, when the amount, plus interest and any costs, must then be paid to the lender.

It is not possible to re-mortgage or to obtain a secured loan when a Charging Order is in place. The creditor can also apply for an Order of Sale following a Charging Order, although this is rare and most are content to wait until the debtor chooses to sell the property.

Once a Charging Order is granted, a record of this will be held at HM Land Registry for 12 years, although this can be removed at the discretion of the creditor once the order has been settled in full. The record of the Charging Order remains on your credit report (but only in the form of the original CCJ) for 6 years.

The Court will only grant a Charging Order if the original disputed sum has not been paid, or if an arranged instalment plan has one or more missed payments. If you are purchasing a house, your solicitor will check with HM Land Registry (or with the Registers of Scotland if you are North of the border) to ensure that all Charging Order have been settled before you purchase.

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