I have received a charging order, what is it?

What is a charging order?

A charging order is an order of the court placing a ‘charge’ over or against your interest in an asset such as stocks and shares or an interest under a trust. The order gives the judgment creditor rights similar to those of a mortgagee over the asset.

How does it work?

A charge on an asset means that, if the asset is sold, the amount of the charge must be paid out of the proceeds of sale. A charging order does NOT force an asset to be sold. Afterwards, you can apply to the court for an order that the asset be sold, or for an order enabling the amount of the charge to be paid out of any income from the asset.

Why have I received an interim charging order?

The order which has been made is an interim charging order. You have received it because the judgment creditor has told the court that you have failed to:

• pay the amount of the judgment when it was due; or
• pay one or more instalments due under the terms of the judgment.

Can I oppose the interim charging order?

You may oppose the making of a final order. You have been notified of the time and place of a hearing at which the court will consider whether to make a final order confirming the charge on the asset. To oppose the making of a final order you must file in the Court Office a witness statement giving your reasons for doing so not less than 7 days before the hearing date and send a copy to the judgment creditor. You will be expected to attend the hearing.

What happens at the hearing?

The judge will consider the application, all evidence and whether any objections have been made. The judge may then:

• make a final charging order confirming the charge shall continue with or without modification;
• discharge the interim charging order and dismiss the application¹;
• deal with any issues in dispute between the parties; or
• give directions for a trial (directions tell you what you must do to prepare for that trial).