Charging order against home after CCJ

Hello there. I am Gemma, a legal assistant at Lawyer Destroyer, and I can certainly explain how this works.

The short answer:

Yes, a creditor can apply for a charging order against your property if they already have a County Court Judgment against you. Essentially, a charging order turns an unsecured debt into a secured debt, a bit like a mortgage. It means that when you eventually sell your home, or remortgage it, the creditor gets paid out of the proceeds.

The two-stage process:

Getting a charging order is not automatic. The creditor has to apply to the court, and the process happens in two stages.

1. Interim charging order. The court usually grants this quickly on paper. It acts as a temporary safeguard for the creditor. A notice is placed on your Land Registry title to stop you selling the house and keeping the money before the matter is fully decided.

2. Final charging order. A judge will decide whether to make the order permanent, either by reviewing the paperwork or at a hearing. You will be sent the documents and given a chance to object before a final decision is made.

Important rules about joint ownership and instalments:

If you own the property jointly with someone else, but the CCJ is only in your name, the creditor can still get a charging order. However, it will only apply to your share of the equity in the property, not the other person's share.

There is also a very important rule about paying the CCJ in instalments. If the court ordered you to pay the CCJ in monthly instalments, and you are completely up to date with those payments, the creditor is still legally allowed to get a charging order to secure the debt for the future. However, as long as you keep up with those court-ordered payments, they generally cannot take the next step and try to force you to sell your home.

The difference between a charging order and forcing a sale:

People often worry that a charging order means they will lose their home immediately. While a creditor with a final charging order can theoretically apply for an order for sale, courts are very reluctant to grant these. A judge will look at the size of the debt, whether the house is your main home, whether you have children living there, and whether you are making efforts to pay the debt. For most straightforward consumer debts, actually forcing a family out of their home is deeply unpopular with the courts and quite rare.

Practical next steps:

1. Check your CCJ documents. Make sure you know exactly what the court ordered you to pay and whether it was an upfront lump sum or a monthly instalment plan.

2. Keep your payments up to date. If you are on an instalment plan, do your absolute best not to miss a payment. This gives you strong protection against the creditor taking further aggressive action.

3. Read any new court mail carefully. If the creditor does apply for an interim charging order, you will receive paperwork in the post. Do not ignore it.

4. Prepare to object if necessary. You will usually have 28 days from the date of the interim charging order to send written objections to the court and the creditor. Sensible reasons to object might include the debt being very small compared to the amount of equity in the house, or that a charging order would unfairly prejudice other people you owe money to.

5. Talk to the creditor. You can always try to negotiate with them, even after a CCJ is issued. If you can agree to an affordable payment plan, they may agree not to pursue the final charging order.