Navigating the complexities of debt and legal proceedings in the UK can be daunting, especially when facing an interim charging order. This guide offers a lifeline, providing clear, actionable advice to prevent such orders from becoming a lasting burden.
We delve into the essentials of interim charging orders, shedding light on your options and rights at every step. With this guide, you’ll find the support and information needed to confidently address your situation.
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What is meant by an Interim charging order?
An interim charging order is a court-issued directive that imposes a ‘charge’ on your property. If you sell your property, You need to settle the charge first before you even think of receiving any proceeds from the sale. Here, the charge amount corresponds to the debt owed to the creditor.
This order may have been issued because the creditor informed the court that you:
Keep in mind that obtaining a charging order does not mandate the sale of the property.
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When will a creditor can apply for a charging order?
A creditor is eligible to apply for a charging order only after obtaining a county court judgment (CCJ) against you. Following the issuance of the CCJ, the creditor must submit a separate application to the court to secure a charging order.
The regulations regarding when a creditor can seek a charging order underwent changes starting from October 1, 2012.
Therefore it is important to verify:
- The date when your creditor applied for the initial CCJ.
- The date on which the CCJ was granted.
- The details about the repayment terms ordered through CCJ.
let’s assume your creditor acquired a CCJ prior to this date. Then they can only apply for a charging order
We advise you to attend the court hearing if the creditor pursues a charging order without a missed payment deadline. During the hearing, you can present evidence to demonstrate compliance with the CCJ terms. If you have missed payments, making efforts to catch up before the hearing can prevent the issuance of a charging order.
Let’s assume a scenario where your creditor secured a CCJ on or after October 1, 2012. Then they can apply for a charging order immediately, regardless of whether you are current with payments under the CCJ.
At What Stage Can You Appeal Against a Charging Order?
The specifics of appealing a charging order can vary depending on your location and the specific circumstances of your case. However, we can offer some general information that might be helpful.
You will have a 28-day window to raise objections following the establishment of an interim charging order.
Then, a hearing will probably be arranged by the court. Within this hearing, you can provide facts and evidence supporting your challenge against a final charging order. But keep in mind, you need to submit this information to the court at least 7 days prior to the scheduled hearing date.
How to Stop a Final Charge Notice
During the hearing, you need to make sure to present all the reasons why you contend that a final charging order would be unsuitable in your situation. The court will then decide whether to issue a financial charging order or not.
Reasons you might be able to provide can include:
What Options Do You Have if Your Challenge for Interim Charging Order Is Unsuccessful?
There is still some recourse that you can use if the hearing results in the rejection of your evidence, and the issuance of the final charging order.
Various options are outlined below:
However, at this point, the likelihood of successfully making changes to or cancelling the final charging order is relatively low. Substantial extenuating circumstances would be required for the court to entertain your request to halt a final charge notice.
Why Does a Creditor Apply for a Charging Order?
Your creditors will surely obtain a County Court Judegement (CCJ) against you if the accused debts are proven true inside the court. Simply it means, you will be legally responsible for settling the debt if your creditor succeeds in taking a CCJ against you.
Through this CCJ order, the court will mandate you to either regular repayments to clear the debt or set a deadline for the full repayment of the entire amount.
However, obtaining a CCJ doesn’t guarantee debt repayment. Therefore, in order to secure a means for debt collection, creditors can pursue further actions. They start these further legal actions by taking an interim charging order in the beginning and subsequently a final charging order.
This process provides the creditor with a mechanism to collect the debt. They will even resort to forcing the sale of your home in extreme cases to obtain full payment.
Surely, you will be deeply entangled in debt-related challenges by the time you reach the stage of facing a final charging order. As a result, you may end up declaring bankruptcy as well.
It is crucial to remember that you can avoid these severe legal debt recovery measures by maintaining open communication with your creditors. If you anticipate missing a payment, reach out to your creditor promptly to explore options for repaying the debt through more manageable instalments.
Get breathing space if you need more time to decide what to do
You can obtain additional time to make decisions by availing yourself of the government-backed breathing space scheme. This initiative allows you to extend the period for deciding how to address your debt-related concerns and can be accessed at any point.
You may benefit from a 60-day breathing space during which your creditor is prohibited from if you meet the eligibility criteria:
- Evicting you
- Contacting you
- Taking actions to compel payment
- Adding interest and charges to the debt
It’s important to note that if you incur further arrears during the breathing space, your creditor retains the right to contact you regarding those specific matters. Generally, breathing space can be utilised only once in a 12-month period.
We advise you to Consult with an adviser to explore the possibility of obtaining breathing space and to determine if you meet the necessary qualifications.
What should I do if my debts are huge and I cannot afford to settle them?
Sometimes, you may face difficulties in agreeing to the proposed payment plans from your creditor or the Debt Collection Agency, especially if they are financially burdensome.
In such situations, it is advisable to explore alternative debt solutions that can effectively address your debt-related concerns. In the UK, there are various alternative debt solutions to consider.
However, it’s crucial to keep in mind that each of these debt solutions has specific eligibility criteria. Selecting the right one can lead to debt resolution, while choosing the wrong one could worsen your financial circumstances.
Hence, seeking guidance from a professional debt advisor is a prudent step to take if you find it challenging to determine the most suitable debt solution on your own.
- Additionally, you may be eligible for Minimal Asset Process bankruptcy (MAP) if you have limited income and few valuable assets.
- This MAP option is known for its speed, cost-effectiveness, and simplified process, making it a practical choice to explore.
If you need personalised assistance based on your current financial situation, please feel free to complete our online form by clicking here to receive help from our Money Advisor Team.
Seeking Free Financial Advice?
There are a number of debt charity organisations that you could use to get professional debt and financial advice free of charge. Their advisors will inquire deeply about your debt issue and will help you in finding a reliable solution to your debt issue.
Below is a list of charity debt organisations where you could get free debt help:
key points
- 28-Day Appeal Window: You have 28 days from receiving an interim charging order to appeal against it, providing a critical opportunity to prevent it from becoming final.
- Preparing for Appeal: It’s crucial to gather compelling evidence and reasons for your appeal, such as disputing the debt, demonstrating financial hardship, or showing ongoing commitment to debt repayment.
- The Importance of Humanizing Your Appeal: Sharing your personal story and the potential impact of a final charging order on your family can be persuasive in court, making it essential to humanize your appeal.
- Awaiting the Court’s Decision: After presenting your case, the outcome is in the court’s hands, leaving you in suspense about whether your efforts will stop the final charge notice.
- Options Post-Unsuccessful Challenge: If the challenge is unsuccessful, you can apply to have the order set aside, request modifications to its terms, or negotiate directly with the creditor for a more favorable outcome.
- Understanding Creditor Motivations: Recognizing why creditors apply for charging orders, such as securing debt legally, can aid in negotiating a resolution that satisfies both parties.
- Navigating Legal and Financial Challenges: Armed with knowledge and a clear strategy, it’s possible to navigate the complexities of facing an interim charging order, exploring every available avenue to protect your financial stability.
- Engagement in Direct Negotiations: Open communication and negotiation with the creditor can potentially lead to a mutually beneficial agreement, avoiding the enforcement of the charging order as originally planned.
- Leveraging Legal Avenues: Exploring legal avenues like setting aside the order or modifying its terms can offer a chance to mitigate the impact of a final charging order.
- Proactive Approach: Taking a proactive approach in understanding your rights, preparing a strong defense, and engaging in negotiations can significantly influence the outcome of your financial and legal situation.
Faqs
A provisional charging order(granted by the court)imposes a ‘charge’ on your property. In the event of a property sale, the charge typically must be settled prior to receiving proceeds from the transaction. Here, the charge amount represents the debt owed to the creditor.
A charging order proves to be a potent enforcement tool when it comes to debt recovery. It enables the creditor to establish a claim against a debtor’s property for a judgment debt or costs order. This approach is especially advantageous when the debtor’s sole identified asset is their property.
