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• If a creditor has a county The creditor can apply for a charging order if they
C court judgment against you
ordering you to repay a debt,
have a county court judgment against you and:
STAGE TWO – THE FINAL CHARGING The court must consider whether it is reasonable
ORDER to make a charging order. Under The Charging
Orders Act 1979 the court has to consider all the
The second stage is the court hearing in front circumstances of the case and in particular:
of the District Judge. At this hearing the court
• The personal circumstances of “the debtor”
will decide whether to make a permanent
charge on the property. This is called a final • Whether any creditor would be “unduly
charging order. If you object to a charging prejudiced”. This means the court has to
order being made final then you should send decide if making a charging order would
the creditor and the court written evidence disadvantage other creditors.
stating why you object. You should do this at
least 7 days before the hearing. This could be The arguments you can use against the order
in a form of a letter of objection outlining all being made will vary depending on your
the arguments you have for why the charging circumstances, whether you have any other debts,
order should not be made. This should be sent whether you have equity in your house and own
by registered post to both the creditor and the your home in joint names or on your own. If you
court. have to go to a hearing phone us for advice.
These are some of the factors that the court may
If you do this then your arguments should be consider:
taken into account by the District Judge at the
hearing. You should still go to the hearing and • Does any member of your family have a
if you do not send any written evidence then it disability or serious illness?
is vital that you go.
• If you have a number of debts and making a
The court can refuse to make the charging charging order in favour of one creditor would
order so you must serve a notice and go to give them unfair priority over other unsecured
the hearing. If you cannot attend on that creditors. It is particularly useful if you can
date, contact the court for a different show you already have a payment arrangement
hearing date to be arranged. If you do not in place with your other creditors. This would
go, the charging order is likely to be made be upset by an order being made. Point out if
final by the court at the request of the any of the debts are larger than this debt and if
creditor. any other creditors have frozen the interest.
• Is there enough equity in the house to cover If you pay off the amount you owe under the
any mortgages and the charging order debt? charging order, you can apply to the court for the
order to be discharged. Ask the court for a
• When you bought the house what did you buy certificate of satisfaction on your county court
it for? Is it intended as a long-term family judgment and include evidence of payment. It is
home? Is it imagined that an elderly person usual for creditors to inform the Land Registry
will live there for their lifetime? that the interim and final charging order have been
removed.
• Welfare of any children should especially be
taken into account. Are there special factors For details of the District Land Registry that
such as age, disability or illness? There may covers your area contact:
be a need for stability at school. The effect on Land Registry Headquarters.
the children of moving house should be 32 Lincoln’s Inn Fields
considered. London
• If the debt is in your sole name, argue that it is WC2A 3PH
not fair for the whole family to lose their home Tel No: 020 7917 8888
because of a debt belonging to one person. www.landreg.gov.uk
The court should look at whether the interests of You can also check details of charges on property
the creditors should outweigh the interests of the on the Land Registry website
family. Argue that, under The Trusts of Land & www.landregisteronline.gov.uk. The creditor may
Appointment of Trustees Act 1996, the court has say there is interest on the county court judgment
discretion to say the family's interests outweigh which is still outstanding. If the creditor disagrees
the creditor’s interests. that you have paid the charging order in full,
phone us for advice.
You can still make an offer of payment at this
stage and ask the court not to order a sale as long If you have enough equity in your home, you can
as you keep up with the payments. You can ask also pay off the charging order if you move house,
the court to adjourn the order for sale proceedings, as the charging order will automatically be paid
or to suspend the order. off as part of the sale process.
There will usually be a fee to pay with your application. You can ask the court not to pay the fee in
some circumstances. The form you will need to fill in is called an EX160 "Application for a fee
exemption or remission." This form needs to go to the court with your main application. If the
court agrees your application you will not have to pay the fee. If you pay a fee when you should
have been exempt or would have qualified for a remission, then you have six months to apply to the
court for a refund.
EXEMPTIONS
If you are on income support or income-based jobseeker’s allowance (JSA) you can ask the court
for exemption from the fee. You need to give the court proof that you are getting the benefit. You
will be exempt if you or your partner are on the guarantee credit element of pension credit.
If you are on working tax credit you will be exempt from the court fee in these circumstances:
if you are also on child tax credit,
or
you receive the disability or severe disability element in your working tax credit
and in either case
your gross annual income taken into account for working tax credit is £15,460 or less (from 6 April
2006).
You will need to show the court your tax credit award notice to qualify.
If you do not qualify under these rules for an exemption then you can ask for the fee to be remitted
or waived by the court. See below.
REMISSIONS
Ask the court for the fee to be remitted (or waived) if it will cause you what the court calls “undue
financial hardship”. You can use the same EX160 application form. You may be on a low income
or a benefit that does not automatically exempt you from paying the fee. Give as much information
about your circumstances as you can. Explain your financial situation on the application form and
any exceptional circumstances that apply in your case. The court can remit all or part of the fee
depending on what they decide you can afford.
REMEMBER: You can always contact us for advice about any difficulty you have in
dealing with your debts.