Problem

I have a county court judgement against an individual. Can I enforce the judgement against the debtor’s home if it is co-owned with a spouse/partner?

If you have a county court judgment against Mr Bloggs, the debtor, enforcing the judgment over his property can be an attractive option to recover the cash you are due. However, things are not as straight forward where the debtor co-owns the property with someone else. This is especially the case when the property is the family home.

There are three stages to enforcing a judgment against a property - an interim charging order, a final charging order and an order for sale. All court applications. The interim and final charging orders are noted at the land registry against the title to the property and ensure that the property cannot be sold without the sellers accounting to the creditor for the debt secured against the property (if there is any equity once prior charges are paid off - a charging order is always subject to any pre-existing legal charges granted over the property). If the creditor does not want to wait until the property is voluntarily sold it can attempt to force the sale by applying to the court for an order of sale.

Before enforcing a money judgment against property consider how much equity is available in the property to enforce against? This will depend on the amount secured by any pre-existing charges by comparison with the value of the property. However, it will also depend on the proportions in which the debtor co-owns the property.

If all the co-owners of the family home, i.e. Mr & Mrs Bloggs, are debtors then there are no additional issues and the court applications can be made as usual.

However, the situation is more complex where the property is a family home co-owned by the debtor and his spouse or partner. Where only one of the co-owners is a debtor, a creditor can still make an application for a charging order. If the order is made, it will create an equitable charge over the debtor's beneficial interest only; the partner's beneficial interest will not be affected.

Once the creditor obtains a final charging order, the judgment debt is secured. However, in order to recover the debt, the creditor will either need to wait for the property to be sold or make an application for an order for sale. In deciding whether or not to make an order for sale, the court will consider various factors.

The exercise of the court's discretion has thrown up particular difficulties. The courts try to strike a balance between the creditor's entitlement to enforce the judgment on the one hand, and the interests of the co-owning partner and any children (the welfare of any minor) living at the property on the other. In every case these competing interests will be assessed and balanced against one another, and the courts should not automatically favour one party over another.

Whilst enforcing against a debtor’s property is a good method of enforcing a county court judgment a creditor must first investigate the title to the property to see who owns it, and what prior charges are noted against the property, in order to weigh up whether enforcement is likely to be successful.