Can a charging order force me to sell my home?

A charging order under the Charging Orders Act 1979 converts an unsecured judgment debt into a secured one, registered at the Land Registry. The practical effects are that you cannot sell without clearing it, it sits behind any prior mortgage in priority, and it accrues interest at 8% under the Judgments Act 1838 unless the underlying judgment is below £5,000.

How one is made — and how to resist it

The creditor applies for an interim charging order, which the court can make without notice to you, paying a court fee of £139. It is registered against the property and served on you, any joint owner and prior chargees. A hearing is then listed, usually four to eight weeks later, to decide whether to make the order final. That hearing is your one real opportunity, so attend or send written representations.

• You are already paying instalments. If a court order or written agreement sets monthly payments and you are keeping to them, courts frequently decline to make the order final.
• Joint ownership. Where a spouse or partner is not the debtor, the charge can attach only to your beneficial share.
• The judgment is defective. Apply on form N244 to set it aside before the charging order hearing — if the judgment falls, the charge falls with it.
• No equity. A charge on a property in negative equity is valid but worth nothing to the creditor.

Orders for sale

To force a sale the creditor must make a further application, and the court weighs the size of the debt, whether it could be repaid another way, the impact on your family — children, disabled or vulnerable occupants — and proportionality under Article 8 of the European Convention on Human Rights. Sales are almost never ordered on debts under £5,000, rarely between £5,000 and £15,000, and only sometimes above that. Most creditors hold the charge, let interest run, and take payment on an eventual sale.

Removing a charge means paying it off with interest and applying to the Land Registry on form CN1 to cancel it, applying on form N244 to vary or discharge it where circumstances have changed materially, setting aside the underlying judgment, selling the property so it is paid from the proceeds, or dealing with it inside bankruptcy or an IVA. Be aware that a charging order makes remortgaging very difficult unless the charge is being cleared from the advance.