A charging order is when the court allows a creditor to attach a debt to your property.
This means the debt is secured against your property. The creditor will also require you to pay a monthly payment towards the debt.
If you sell your house and you still owe money on that debt, the balance is paid off using the proceeds of the sale.
A creditor can apply for a charging order if:
- You received a county court judgment (CCJ) after the 1st October 2012 (regardless of whether or not you’ve missed payments)
- You got a CCJ before 1st October 2012 and you’ve missed payments
- The application for a judgment asks you to pay immediately or ‘forthwith’ and you haven’t asked the court to change this
If the creditor applies for a charging order you’ll receive a letter telling you that the creditor has an interim charging order. This means that you can’t sell your house until the process has finished. You’ll also be given a date for a final charging order hearing at your local county court.
You must attend the hearing as this is your opportunity to give the court details of your financial difficulties.
Although a charging order is normally applied to your home, in rare cases be attached to shares or other property.
Free debt advice
If a creditor is threatening to apply for a charging order or you’ve received an interim charge, you need to get expert debt advice as soon as possible. You can use our online Debt Remedy tool or call our free Helpline on 0800 138 1111 to get the specialist advice you need.