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Charging orders and the way they can be enforced might be a little intimidating, especially for those having to deal with it for the first time. To break it down and make it a little more understandable, here is a helpful FAQ about charging orders.

What Is A Charging Order?

A charging order is what creditors apply for when they want to retrieve money from a debtor. More specifically, this is a drastic step used in situations when the debtor isn’t making payments.

Not too long ago it was easy for creditors to simply lay claim on just about any property or business shares of a debtor through a charging order, but things are a little different now.

Are there different types of charging orders?

It starts with an interim charging order. The creditor finds that the debtor owns a piece of property, which can be a house or business, and they want to use it as leverage to get their money back.

If the judge approves the interim charging order, it means the property cannot be sold until the debt has been paid or the final charging order hearing has been handled.

If the debtor doesn’t react on the interim charging order, it will be followed up with a final charging order 28 days later.


There are also bankruptcy and legal aid charging orders.

 Can interest be added to charging orders?

This depends on whether the debt was regulated by the Consumer Credit Act. If so, then the interest and all other extra costs had to be stopped the moment the CCJ was issued.

However, if the debt was not regulated then an interest fee can be added.

 What is an order for sale?

This happens when the debtor is still not making payments after property has been seized so-to-speak. If the creditor isn’t seeing any money coming in, they can push for an order to sell the property. If the judge agrees the property has to be sold to then it goes onto the market.

What happens when two people own one house?

The other party is informed immediately, and the matter should be discussed with the other partner. This is important because if the debtor dies his or her shares won’t automatically be passed on to the other party if it’s a joint tenant situation.

Can a charging order for personal debt be claimed from the debtor’s business?

This is going to depend on the type of business it is. For example, if the debtor is part of (or owns) a closed corporation establishment, the creditor can push to take whatever assets necessary to cover the debt.

But if the company is registered as a Limited Liability Corporation, the creditor doesn’t have so much power anymore. In most states the creditor will only be able to lay a claim on the profit the debtor earns from the business. This protects other partners in the company, along with the assets the debtor has in the business.