The legal tools a lender can take to protect a loan — from charges and mortgages to guarantees — and how they rank when the borrower cannot pay.
When a borrower collapses, everything turns on what security was taken, whether it was registered, and where it ranks. This chapter starts with the four proprietary security interests recognised by English law and the crucial divide between fixed and floating charges, then works through mortgages, the registration regime at Companies House, and the rules governing priority between competing charges. It moves on to enforcement — the power of sale and the position of a qualifying floating charge holder — and to insolvency distribution, including the prescribed part and the grounds on which a floating charge can be avoided. The final sections cover the alternatives and supplements to security: retention of title clauses, legal assignments of debts, the distinction between guarantees and indemnities, the events that discharge a guarantor and the undue influence safeguards, and the prohibition on financial assistance.
