As of October 1st 2012 the process surrounding charging orders and how creditors can secure a debt to a property will change.
At the moment creditors can only secure a charging order on unsecured debts by issuing a default notice , then applying for a county court judgment (CCJ). The person in debt would then need to default on the CCJ before creditors could secure the debt through a charging order.
A CCJ, despite what some people think, can be varied through the courts. So in cases where the CCJ payment becomes difficult to maintain we’d advise that they vary the amount with the court’s agreement. This would stop further action being taken, such as the creditor applying for a charging order if the CCJ payment is broken (However, creditors can sometimes apply for a re-determination at court with a view to securing the debt based on the CCJ payment being too low).
Changes that come in next week mean that creditors will be able to apply for a charging order once a CCJ is in place, even if no payments have been missed on the CCJ.
This will change some of the advice we give but it’s worth noting that this only applies to CCJs which are granted after October 1st 2012. CCJs granted before this date will be subject to the old procedure, where charging orders are only possible after payments have been missed on a CCJ.
Our charging order advice
If you do receive a CCJ after October 1st and you do own a property we think it’ll be more likely that the creditor will attempt to secure the debt through a charging order.
The process of applying for a charging order will remain the same for the creditors and we will support clients with advice on how to challenge this at the final charging order hearing.
The court would need to consider the interest of creditors and our clients. If a CCJ is up to date the court would need to consider this in relation to the application to secure the debt. However, under the new system they could still grant a charging order.
How we can help with charging orders
If you’re a client you can call us for more advice about this process, particularly if you receive any CCJ paperwork while you’re on a debt management plan (DMP) with us. We’re always happy to help support and assist our clients.
If you’re considering debt management but need advice on what solution is best, call our Helpline or use our online debt counselling tool Debt Remedy, available online at all times of the day or night.
Staying on top of debt
Our commitment is to make sure that our clients stay on top of problem debt. That means that we too need to stay on top of legislation and prepare for any changes. This is all part of making sure our free debt advice service remains the best available.