Charging Orders Explained: Can Unsecured Debt Be Secured on Your Home

An unsecured debt does not begin as a claim over your home. But in England and Wales, a creditor that has obtained a court judgment can apply for a charging order over your interest in property.

A charging order gives the judgment debt security against the property. It does not automatically mean the house is repossessed or that you must sell it immediately.

The usual sequence is:

1. you owe an unsecured debt;
2. the creditor obtains a County Court Judgment or other qualifying judgment;
3. the creditor applies for a charging order;
4. the court considers whether to make the charge final; and
5. if the property is later sold, the charge will usually have to be dealt with from your share of the proceeds.

A creditor with a final charging order can, in some cases, make a separate application for an order for sale.

That is a further court process. A charging order by itself does not force the sale.

This guide covers England and Wales. Scotland and Northern Ireland have different enforcement systems.

HM Courts & Tribunals Service describes a charging order as a court order placing a charge over property such as a house or land.

The effect is similar in one important respect to other secured interests: the debt becomes attached to your beneficial interest in the asset.

If the property is sold, existing charges generally have to be dealt with in priority order before you receive your remaining share of the proceeds.

A mortgage already registered against the property normally ranks ahead of a later charging order.

Not simply by sending letters or visiting your home.

An ordinary debt collector has no independent power to turn an unsecured balance into a charge over property.

The creditor needs a judgment and must use the court enforcement process.

That is why the phrase "debt collectors can take your house" is too broad.

A debt-collection company might be acting for a creditor that later obtains a judgment, or a debt purchaser might itself become the judgment creditor. But the security comes from a court charging order, not from the collector's job title.

See what debt collectors can and cannot do at your home.

For ordinary civil debt enforcement, the creditor first needs a court judgment.

GOV.UK lists charging orders as one of the ways a creditor can enforce a judgment, alongside options such as attachment of earnings, bailiff action and third-party debt orders.

A charging order is therefore generally a post-judgment enforcement step.

If you have received a claim but no judgment yet, deal with the claim. Do not skip ahead mentally to the charging-order stage.

If you already have a CCJ, our guide on checking and understanding a CCJ explains the judgment stage.

Potentially, yes.

GOV.UK's current charging-order guidance says a creditor can apply even where instalments are being paid under the terms of the judgment. The court can take that fact into account.

That does not mean a final charging order is inevitable.

It does mean the old assumption that "as long as I pay the instalments, a charging order is impossible" is unsafe for newer judgments.

If you receive an interim charging order while maintaining payments, include that evidence in any objection or request for reconsideration.

The process normally begins with an interim charging order.

That is not the end of the case.

HMCTS guidance explains that you can object or request reconsideration within the applicable timetable.

Depending on where the order was made:

• a request for reconsideration at the Civil National Business Centre must generally be received within 14 days of service; or
• for a county court hearing, written objections should generally be filed and served at least 7 days before the hearing.

The court then decides whether to make the charging order final.

Read the actual order and notice you receive because your case documents control the deadline.

The court is not limited to asking whether the judgment exists.

Relevant issues can include:

• whether the debt and judgment are correctly identified;
• your beneficial interest in the property;
• the amount outstanding;
• whether payments are being maintained;
• other creditors;
• co-owners;
• equity in the property; and
• objections raised by people affected by the charge.

A joint owner who does not owe the judgment debt is particularly important because the creditor is generally targeting the debtor's beneficial interest, not magically turning the other owner's share into the debtor's property.

No.

HMCTS states explicitly that a charging order does not mean you have to sell the property.

A final charge can sit on the property and be dealt with later when it is sold or remortgaged.

A creditor wanting to force a sale must make a separate order-for-sale claim.

Civil Procedure Rule 73.10C provides for a court to order sale to enforce a charging order, subject to applicable legislation.

That extra step is why "charging order" and "forced sale" should not be used as synonyms.

It is legally possible in some cases, but not automatic.

MoneyHelper describes an order for sale as a further, last-resort enforcement step after a charging order and notes that forcing sale of a main home is less likely, particularly where dependants live there.

The court hears the order-for-sale application before deciding.

Factors can be highly fact-specific, so anyone actually facing an order-for-sale claim should get legal or debt advice.

Our companion guide on what to do if a charging order is threatened covers the immediate practical steps.

There is a specific protection for certain Consumer Credit Act regulated agreements.

The Charging Orders (Orders for Sale: Financial Thresholds) Regulations 2013 provide that where the charging order secures money due under a regulated agreement, it cannot be enforced by an order for sale to recover an amount of less than £1,000.

That is a threshold for order-for-sale enforcement in those regulated-agreement cases.

It does not mean:

• a £999 debt can never have a charging order;
• every debt has the same £1,000 rule; or
• a £1,001 debt automatically leads to sale.

The court process and other legal protections still matter.

A charging order can affect the debtor's beneficial interest in jointly owned land.

That can make the Land Registry position look different from a charge over a solely owned property.

The non-debtor owner's share does not simply become liable for somebody else's judgment.

However, a charge can complicate:

• sale;
• remortgage;
• transfer of equity; and
• distribution of sale proceeds.

If ownership shares are disputed or the sums are substantial, get legal advice rather than relying on a generic online explanation.

A charging order can still matter even if the property currently has little equity.

Existing mortgage and secured charges are generally paid first, so a later charging-order creditor may recover little on an immediate sale.

But the charge can remain relevant if:

• the mortgage balance falls;
• property value rises; or
• the property is sold later.

That is one reason creditors may use charging orders as long-term security rather than expecting immediate payment.

Not exactly.

It makes the judgment debt secured against an interest in property, but it does not turn the original consumer-credit agreement into a conventional first-charge residential mortgage.

Different rules, priorities and enforcement procedures apply.

Use the phrase secured by a charging order rather than assuming all mortgage rules now apply to the debt.

The conveyancer will investigate charges registered against the property.

A charging order affecting the debtor's interest will normally need to be addressed as part of the transaction.

The sale proceeds are applied according to legal priority and ownership.

That can mean the judgment debt is repaid from the debtor's share after higher-ranking charges such as the mortgage are dealt with.

The exact Land Registry mechanism can differ where the property is jointly owned, so ask the conveyancer how the entry affects your particular title.

Potentially, but the charge complicates the transaction.

A new lender will normally need acceptable security and will consider existing charges.

Possible outcomes include:

• the charging-order debt being repaid on remortgage;
• the creditor agreeing to a priority arrangement;
• the new lender refusing to proceed; or
• another legal arrangement being required.

Do not assume the charge disappears because you are changing mortgage lender.

Possible routes depend on why it should end.

Examples can include:

• the underlying judgment being set aside;
• the debt being paid and the charge discharged;
• the court varying or discharging the order; or
• another legal resolution.

If the underlying CCJ itself is wrong, see how to get a CCJ removed or set aside.

Do not pay a "credit repair" company to promise removal without identifying the legal basis.

This guide describes the charging-order process in England and Wales.

Scotland uses different diligence procedures and does not use England-and-Wales charging orders in the same way.

Northern Ireland has its own judgment-enforcement system.

If your property is outside England and Wales, get guidance for that jurisdiction.

Browse all our debt guides.

• GOV.UK / HMCTS — Respond to a charging order
• GOV.UK / HMCTS — Apply for a charging order
• Civil Procedure Rules — Part 73
• Charging Orders (Orders for Sale: Financial Thresholds) Regulations 2013
• MoneyHelper — County Court Judgments

Related: Charging Order Threatened | How to Check If You Have a CCJ | Debt Collectors vs Bailiffs.