Charging orders - Bargate Murray Solicitors

Posted by | November 22, 2011 | News | No Comments

Many people assume that when judgment is given in a money claim, if the debtor does not pay the debt the court will automatically enforce the judgment. Unfortunately, this is not the case and a creditor faced with the situation of a debtor who will not pay the debt has a number of options for enforcing the judgment. Today, we look at charging orders.

Before starting any litigation, it is always worth checking whether the debtor has sufficient funds to justify the cost of pursuing court proceedings. It may be that the debtor owns property which does not have charges on the register as the mortgage is discharged. In this instance, the creditor needs to see whether there is sufficient equity in the property to consider applying for a charging order. A charging order is subject to any charges previously registered on the property.

This means that if a mortgage was in place before a charging order was granted, the mortgage lender’s security has priority. The mortgage lender’s interests come before those of the debtor and the mortgage lender can therefore sell the property if, for instance, the debtor defaults on repayments and the conditions for repossession and sale are satisfied. The mortgage lender does have a duty to sell the property for the best price reasonably available otherwise the sale itself can be challenged.

It is important to bear in mind that a charging order does not, by itself, release funds to pay a judgment debt. In order to satisfy the debt, a sale of the property to which the charging order is attached, will need to take place. If the charge holder needs the money without too much delay, they can apply for an order for sale of the property. The other option, which could take a long time, is that the creditor can wait for the debtor or the other creditors to sell the property. It is worth checking whether there are likely to be sufficient funds following a sale to pay the judgment creditor if there are prior charges.

For more information about how we can assist with enforcement of a judgment debt, please contact Quentin Bargate or Andrew Denny of Bargate Murray

About Quentin

In 2004, Quentin fulfilled a lifetime ambition when he set up his own law firm, Quentin Bargate & Co. In 2006, he was joined by his old friend and former colleague, Andrew Murray, and the firm changed its name to Bargate Murray. The firm has since enjoyed rapid expansion.Quentin is an advocate for alternative dispute resolution (ADR), but he also deals with cases in court when required. He occasionally sits as an arbitrator.Quentin handles high value superyacht transactions and advice to yacht managers, owners, builders and others in the industry. He is also responsible for managing the firm's highly regarded litigation and dispute resolution practice.Some recent cases handled by Quentin and his team:• Consolidated Contractors (Oil and Gas) Company SAL (acting by Mr. Lee Manning as receiver) v Canadian Nexen Petroleum Yemen & Others [2011] EWHC 837 (QB). . Cross border receivership litigation involving Yemeni, Lebanese and English law (amongst others), concerning the unprecedented attempt by an English court-appointed receiver to gain control of foreign assets located in the Middle East. The case eventually settled. • Gamit Ltd v Saudi Arabian Airlines Corp & Anor [2011] EWHC 989. Successfully defending the maintenance division of a jet engine manufacturer in a dispute over title to replacement jet engine parts. • Madoff Securities International Ltd (In liquidation) v Raven & Ors [2013] EWHC 3147. Defending a director allegedly involved in a global Ponzi scheme in litigation brought by the liquidator of an English Company. • Street v Larkins [2013] EWHC 1408 (Ch). Representing the Defendants in their successful defence of an interim application for a freezing injunction and the Defendants successful application for wasted costs. The Defendants were awarded their wasted costs on the basis of the Claimants’ unreasonable refusal to consent to an adjournment of the trial date. Claimants’ application for freezing injunction was dismissed on the grounds of failing to establish a “good arguable” case during the trial window. • Successfully litigating and eventually settling on favourable terms a highly complex and fractious corporate dispute between shareholders, where the majority shareholders sought to exclude our clients from their share of the profits in a real estate investment vehicle by devising elaborate commercial structures across a number of European jurisdictions. The settlement included payment to our clients of a substantial cash sfunds by our clients and agreement on the part of the Defendants to pay indemnity costs. • Successfully settling a professional negligence action brought by a high net worth individual with considerable real estate investments which were exposed by the repeated failures of a renowned top 20 law firm.His other interests include photography (Elsevier has published a technical book. "Microstock Photography" written by Quentin under his "Douglas Freer" pen name on stock photography), music and his family.

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