Recovery of property by an Order for Sale following a Charging Order
Once a Charging Order has been obtained steps can be taken torecover the property in order for the Claimant to sell the same torecover their debt.
This can be a lengthy process but can be very effective inrecovering monies due without the property actually beingre-possessed. In many cases if this process is threatened thedebtor will "find" the money to pay the debt before the property isactually re-possessed by the Bailiff.
If payment is not recovered and the property is re-possessedtitle passes to the Claimant who then has to sell the property inorder to recover their money and they do have a duty to sell it atmarket value so cannot sell it cheap just to recover theirmoney. Once sold there is a strict order of how as to how thesale proceeds are distributed
- Estate Agent's and Solicitors fees relating to the sale of theproperty
- Claimant's Solicitor's costs and Court fees incurred inobtaining the Order for Sale
- Monies due to mortgage company under any Charge
- Monies due to other Chargees ahead of the Claimant'sCharge
- 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 berecovered, recovery of their debt will only be made if there aresufficient funds within the sale proceeds once the mortgage companyand any Chargees ahead of the Claimant have been paid. Whilstthe application process does involve contacting all Chargeesrequesting details of monies owed to them by the debtor, they donot always comply without their customer's consent.
Another point to bear in mind is that the application will failif there are any dependents living in the property being childrenor disabled persons.
Therefore although obtaining an Order for Sale is often seen asthe "nuclear option" it should not be automatically overlooked.
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.