What is a Charging Order - Enforcing a County Court Judgment (CCJ)

A Charging Order Application is One of the options open to creditors to enforce a County Court Judgment (CCJ)

 

What is a charging order and why would one of your company’s creditors want such an order against a freehold property owned by your company? The answer is that that creditor then becomes secured and is therefore more assured that the debt due will be paid - even if he has to take a further court step to take possession and force a sale of the property.

 

In the case study that we have been considering so far regarding the various options open to enforce County Court Judgments we have used the following background.

 

- You are the sole director of Myco Limited.

 

- Myco Ltd owes £35,000 to one of its suppliers called Supplier Ltd.

 

- As Myco has been unable to pay that £35,000 Supplier Ltd has obtained a County Court Judgment against Myco Ltd.

 

Through personal knowledge or from searches at Companies House or the Land Registry the directors of Supplier Ltd know that Myco Ltd owns a property – Let's say that that property is at Mutley in Plymouth.

 

Supplier Ltd can now make Application to the Court who granted the CCJ for a Charging Order against the Mutley property.

 

Once that charging order is granted it is the equivalent of a legal mortgage. It will entitle Supplier Ltd to then take further Court action to obtain possession then sale of the Plymouth property.

 

Moral of this case study

 

Once a CCJ is ordered against your company you would be wise to find out what protective steps you can take to prevent a charging order or possession order being made. We can help.