Charging orders, third party debt orders and winding-up orders
A charging order is an order obtained from a court or judge, by which the property of the judgment debtor in any stocks, funds or land is charged with the payment of the amount of the judgment, with interest and costs.
For example, should the order apply to a debtor’s property, the debt remains unpaid until the property is sold or the owner re-mortgages it. The charge is removed by the payment of the debt from the proceeds.
Third party debt orders
A third party debt order is an order of the court that freezes money held by an organisation or institution, such as a bank or building society, which might otherwise be paid to the debtor against whom a judgment has been made. The organisation that is holding the money is referred to as the ‘third party’. A third party debt order will prevent the judgment debtor having access to the money until the court makes a decision about whether or not the money should be paid to you. The account would need to be held in the name of the judgment debtor for an order to be granted.
A winding-up order is a court order that forces an insolvent company into compulsory liquidation – a process in which the court appoints an official receiver to liquidate all of the company’s assets in order to repay creditors.
We send a winding-up petition to the court after a company fails to repay a debt of more than £750 within 21 days of being issued a statutory demand. After liquidation, the official receiver is given the task of investigating all actions taken by the directors during the time the company was trading insolvently. If evidence of wrongful trading is found, the directors could be held personally liable for some of the company’s debts, or may even be prohibited from acting as a director of any future company for up to 15 years.