Recovery of property by an Order for Sale following a Charging Order

Once a Charging Order has been obtained steps can be taken to recover the property in order for the Claimant to sell the same to recover their debt.

This can be a lengthy process but can be very effective in recovering monies due without the property actually being re-possessed.  In many cases if this process is threatened the debtor will "find" the money to pay the debt before the property is actually re-possessed by the Bailiff. 

If payment is not recovered and the property is re-possessed title passes to the Claimant who then has to sell the property in order to recover their money and they do have a duty to sell it at market value so cannot sell it cheap just to recover their money.  Once sold there is a strict order of how as to how the sale proceeds are distributed  

  • Estate Agent's and Solicitors fees relating to the sale of the property
  • Claimant's Solicitor's costs and Court fees incurred in obtaining the Order for Sale
  • Monies due to mortgage company under any Charge
  • Monies due to other Chargees ahead of the Claimant's Charge
  • Monies due to the Claimant
  • Monies due to other Chargees behind the Claimant
  • Any balance paid to proprietor(s)

Whilst the costs incurred by the Claimant will always be recovered, recovery of their debt will only be made if there are sufficient funds within the sale proceeds once the mortgage company and any Chargees ahead of the Claimant have been paid.  Whilst the application process does involve contacting all Chargees requesting details of monies owed to them by the debtor, they do not always comply without their customer's consent.

Another point to bear in mind is that the application will fail if there are any dependents living in the property being children or disabled persons.

Therefore although obtaining an Order for Sale is often seen as the "nuclear option" it should not be automatically overlooked.

Posted on: 14/04/2016

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.

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