If you’re in the process of filing for a charging order, you may be feeling overwhelmed and confused about the application process. A charging order is a court order that grants a creditor a legal charge over a debtor’s property, so it’s important to understand the details of the application process before proceeding.
In the below paragraphs, you will find the whole process of charging order application and what to know before submitting an application.
1. Applying for a Charging Order
Before diving deep into the process, let’s first clarify what is a charging order. A charging order is a court order which allows creditors to have a right to receive payments from the debtor, be it in the form of cash or any other asset including real estate.
To apply for a charging order, the creditor needs to submit an application to the court. The application should include details of the debt, proof of identity, and details of the asset being charged. The asset can be a house, land or any other type of property.
In addition to the application, the creditor must provide evidence of the debt, such as copies of invoices and statements, to prove that the debt exists and that the debtor is liable for it. The creditor will also need to show that they have tried to obtain payment from the debtor before applying for a charging order.
2. The Court Process
You can apply for a charging order at the local county court where the debtor is based. The court will then consider your application and decide whether or not to grant a charging order. If the court decides to grant the charging order, it will make an official document.
This document outlines the terms of the charging order and the conditions that must be met in order for it to be enforced. The debtor will also be notified of the charging order and will be asked to pay back the debt within a certain time period.
It is important to note that all applications for charging orders must be made through the court process. This ensures that creditors are given a fair hearing and that their rights are protected throughout the process. It also helps to ensure that all debts are paid on time.
3. After the Charging Order is Made
Once a charging order has been granted by the court, it remains in place until the debtor gets rid of the debt or it is cancelled by the court. During this time, the debtor will no longer be able to access the assets covered by the charging order.
If the debtor wishes to use or sell the assets, they will need to apply to the court for permission. If permission is granted, the proceeds from the sale of the assets must be used to pay off the debt, and any remaining funds must be paid directly to the creditor.
You should also know that creditors can still pursue other forms of debt recovery against a debtor even after a charging order has been granted, such as issuing statutory demands or bankruptcy proceedings.