Can a debtor apply for a charging order?
Can a debtor apply for a charging order?
During the course of debt recovery proceedings, a creditor has a number of options available to them to enforce a Judgment, secured against someone who owes them a sum of money (‘Debtor’). One such option is to apply to the Court for a Charging Order in circumstances where the Debtor owns their own property.
What happens if you violate a charging order?
A limited liability company that makes a distribution to the judgment debtor in violation of a charging order risks not only a contempt of court citation, but also a turnover order, i.e., an order requiring the company to pay the judgment debtor the same amount paid previously to the judgment debtor.
How can I get a charging order for my property?
One such option is to apply to the Court for a Charging Order in circumstances where the Debtor owns their own property. If the creditor is successful in obtaining a Charging Order from the Court then this will be registered on the title of the relevant property at HM Land Registry.
When is there no point in a charging order?
If your home is jointly-owned and your share of the equity in the property is less than the amount of the debt, you can argue that there is no point in the charging order being made. This is because the creditor would not be paid off in full, even if they forced the sale of your home.
Who is the creditor of a charging order?
A charging order is a court-authorized right granted to a judgment creditor to attach distributions made from a business entity, such as a limited partnership (LP) or limited liability company (LLC). The debtor will be a member, partner, or the owner of the business entity.
A limited liability company that makes a distribution to the judgment debtor in violation of a charging order risks not only a contempt of court citation, but also a turnover order, i.e., an order requiring the company to pay the judgment debtor the same amount paid previously to the judgment debtor.
What can you do with a charging order?
In particular, charging orders are used by claimants against limited partnerships (LPs) and limited liability companies (LLCs). Creditors who have been granted a charging order are not allowed to join in the LLC’s management, dissolve the LLC, or sell its assets without the other LLC members’ consent.
If your home is jointly-owned and your share of the equity in the property is less than the amount of the debt, you can argue that there is no point in the charging order being made. This is because the creditor would not be paid off in full, even if they forced the sale of your home.