How to sell a house with a charging order or CCJ

Selling a house can be a stressful process, but it becomes even more complicated when you have a charging order or County Court Judgment (CCJ) against your property. These legal orders can put a significant obstacle in the way of selling your home and getting the best price possible.

What is a charging order?

A charging order on a house is a court order that allows a creditor to secure the debt owed to them against the debtor's property, specifically their home.

For example, if a person owes money to a creditor and is unable to pay, the creditor can apply to the court for a charging order against the debtor's property. If granted, the charging order is registered with the Land Registry. This means that if the debtor sells their property, the creditor is entitled to receive their share of the proceeds up to the amount of the debt owed.

What is a County Court Judgement (CCJ)?

A County Court Judgment (CCJ) is a court order that’s issued against a debtor who has failed to repay a debt. The CCJ requires the debtor to pay back the debt within a specific timeframe, and failure to do so can result in further legal action.

Charging order on house - do you need to sell?

A charging order doesn’t automatically mean that you’re forced to sell your home. However, if you do decide to sell the property, the creditor’s share of the proceeds must be paid before you receive any money from the sale.

Essentially, a charging order on a house allows a creditor to secure their debt against a debtor's property. This is to ensure they receive their share of the proceeds from the sale up to the amount of debt owed.

Can you sell a house with a charging order?

Yes! You can sell a house with a charging order in place, but it can be more complicated, and may take longer than a standard sale. When you sell a property with a charging order, the proceeds of the sale will be used to pay off the debt owed to the creditor.

Selling a house with a charging order/CCJ

Selling a house with a charging order or CCJ can be challenging, but it's important to remember that it’s still possible. While it may require some extra effort and professional help, there are steps you can take to sell your property and pay off any outstanding debts.

Remember that once the charging order or CCJ is paid off, you’ll be free to move on and start fresh. So stay hopeful and take proactive steps towards selling your property and resolving your debts.

Selling tips for a successful sale

1. Get a professional valuation of your property: This will give you an idea of how much your property is worth, and how much equity you have. You’ll especially need this information when negotiating with creditors.
2. Contact your creditor: It’s important that you reach out to your creditor and explain that you want to sell your property. They might be willing to negotiate a payment plan, or a settlement agreement, to remove the charging order or CCJ.
3. Get legal advice: Legal advice will help you to navigate through this process with the correct information. Legal professionals can help to ensure the sale of your property is legal and properly executed.
4. Be transparent with potential buyers: It's key to disclose the charging order or CCJ to potential buyers upfront. This can help build trust and prevent any surprises later on in the process.
5. Be flexible with your asking price: Selling a property with a charging order or CCJ may require you to be more flexible with your asking price. Be prepared to negotiate with potential buyers and consider lowering your asking price if necessary.
6. Get your paperwork in order: Make sure you have all the necessary paperwork in order, including your charging order or CCJ documentation. This can help speed up the selling process and make it easier for potential buyers to make an informed decision.
7. Consider staging your home: Staging your home can help it sell faster and for a higher price. Consider hiring a professional home stager to help you make your property more attractive to potential buyers.

Not enough equity to pay debt - what now?

If you find yourself not having enough equity to cover the debt, you may need to negotiate a settlement or repayment plan with the creditor before selling the property. This could involve agreeing to pay a lump sum, or setting up a payment plan to repay the debt over time.

It’s essential that you communicate with your creditor to come to a mutual agreement that will allow you to sell the property and pay off the debt.

However, having a charging order on your home could make it harder to sell your home in order to pay off the debt. For example, the presence of a charging order on your property’s title may deter some buyers or limit your pool of potential buyers.

It’s therefore, in your best interest to be prepared, flexible, and patient with all potential buyers and the sale.

Working with an experienced estate agent and seeking legal advice can help you navigate the process of selling a house with a charging order/CCJ.

At GetAgent we compare local agents based on:

• Most experience in selling properties like yours in the area
• Most likely to achieve the asking price
• Fastest to sell

Your estate agent can market your home to the best of their ability, to ensure that you find a buyer who is willing to work with you to sell the property.

Sufficient equity to pay off charge - what next?

If there’s sufficient equity in your property to cover the debt owed to the creditor, you can sell your property. When you sell a property with a charging order or CCJ against it, the proceeds of the sale will be used to pay off the debt owed to the creditor.

What happens when the debt is repaid?

Once the debt has been repaid, the creditor will release the charging order or CCJ, and the property can be sold free of any legal orders.

With sufficient equity in your property, you can sell your home, pay off the debt, and move on to your next chapter.

Can you be forced to sell your home with a charging order?

A charging order alone doesn’t mean that you’ll be forced to sell your home. However, if you’re unable to repay the debt owed to the creditor who has the charging order, they can apply to the court for a final charging order.

What is a final charging order?

A final charging order is a court order that gives a creditor the right to enforce the debt they’re owed from a debtor's assets, such as their property or land. It’s called a "final" charging order because it’s the last step in a legal process that begins with obtaining a judgement against the debtor in court.

Once the court has granted a final charging order, the creditor can take further legal action to enforce the debt, such as seeking an order for sale of the property. This means that if the debtor does not repay the debt owed, the property can be sold to pay off the debt.

This would require you to sell the property to repay the debt. In most cases, the court will only grant an order for sale as a last resort, and only if other methods of debt recovery have been unsuccessful.

In some cases however, a creditor may seek an interim charging order before a final charging order is granted.

What is an interim charging order?

An interim charging order is a temporary order that freezes the debtor’s assets, such as their property, until a final decision is made about the debt they owe.

Having an interim charging order can make it difficult to sell your property until the final charging order is granted, or the debt is finally repaid.

A final charging order is a serious legal matter, and it’s in your best interest to seek legal advice, and work with the creditor to come to an agreement as soon as possible.

What to remember when selling your home with a charging order/ CCJ

• Mortgage lender: If the property in question has a mortgage, you might need to inform your mortgage lender about the charging order or CCJ. This is because the lender has a legal interest in the property and will need to be involved in the sale process.

• It’s also worth noting that if you’re struggling to pay your mortgage, a charging order or CCJ, could make things worse. This is because the lender may view you as a high risk borrower, and might charge you higher interest rates or refuse to extend your mortgage.

• Land Registry: A charging order must be registered with the Land Registry to be effective. This means that any potential buyer or lender will be aware of the charging order when they carry out a search of the property.

• If you're selling a property with a charging order or CCJ, you may need to work with the Land Registry to update the property records and ensure that the charging order is removed once the debt is repaid.

• Court officer and county court judgments: It's important to attend any court hearings related to the charging order or CCJ. If you fail to attend, the court may make a decision without your input.

• Unpaid Debt: Unpaid debts can have serious legal implications, as creditors are entitled to charge statutory interest on the outstanding amount. Under the law, this interest can build up over time and can significantly increase the total amount owed.

• In some cases, creditors may even take legal action to recover the debt, which can result in additional fees and charges.

Can you lose your home with a charging order or a CJJ?

No, not necessarily. Even if a charging order or CCJ has been obtained against your property, it doesn’t mean that you’ll lose your home. In some cases, the creditor may agree to a repayment plan or reduced settlement, which could allow you to keep your property.

It’s important for the court and creditor to take into account all circumstances before making a decision.

To ensure you’re getting a fair trial, it’s vital that you seek professional advice, from:

• Financial advisors
• Debt advisors
• Solicitors
• Mortgage advisors

They can help you to review your financial situation, create a budget, develop a plan to manage your debts, including any charging order debt, statutory interests, and court costs.

Rights and protections for those with charging orders/CCJs

If you're facing a charging order or CCJ, it's important to know that you have legal protections under the Consumer Credit Act. This means that the creditor must follow certain rules and regulations when seeking repayment, including providing you with a notice of default, and allowing you a certain amount of time to respond.

Summary: Seek professional advice!

Dealing with charging orders and CCJs can be confusing and overwhelming, which is why seeking professional advice is crucial for a successful outcome. To sell a property with a charging order or CCJ, it's important to get a professional valuation, contact the creditor, and be transparent with potential buyers.

By following these steps, you can ensure that you're complying with all legal requirements and making the selling process smoother.

Working with an experienced professional who can guide you through the process is key to success. By doing so, you'll receive the support and guidance you need to handle any legal proceedings and sell your property to pay off your debt.

Remember that it may take some time to resolve, but remaining focused and optimistic will help you achieve your goal.