Times artical on Charging Orders

[whichwaynow]

Not sure if anyone had seen this artical today.
http://business.timesonline.co.uk/tol/
business/industry_sectors/banking_and_finance/
article5014781.ece

[Julie]

Thanks for posting the atricle.

That is frightening - surely using a credit card is unsecured. How can this be turned into secured against your property?????

I don't think making families homeless is going to help anyone. There's not enough social housing as it is.

xx

[kallis3]

A credit card is unsecured, but the companies can turn it into a secured one with the charging order. This means that if you sell your house,or they force you to sell, once the mortgage and any other secured loans are paid off, any companies with charging orders get their money back before you receive the outstanding balance.

I think at the moment they have to have a CCJ first, but this will be stopping in the future and they can just go for the charging order.

[MelanieGiles]

This may seem harsh, but surely a creditor has a right to use the legal process created by the government of the day to ensure that their debts are eventually repaid. I am sure that we would all do so if we were in the same position?

[David Mond]

Typical bank attitude and appauling.

This is why it is important to keep on top of your finances and if having difficulties contact an IP as soon as possible to discuss appropriate solutions. Visit www.iva.com for reviews on practitioners that can help.

[Reviva UK]

I read the article earlier and was frankly quite surprised that the situation had only just come to light as if it had started yesterday.

Creditors are quite at liberty to pursue a borrower for monies owed and use the court system so secure their debt rather than leave it unsecured. In the same way that everyone can use the court system to protect themselves using either an IVA or Br to resolve their personal financial crisis.

The benefit for the creditor is than in the event that someone either goes Br or enters an IVA then the full sum of their debt is protected.

However with this current housing "downturn" and the credit crunch I question the wisdom of creditors following this procedure. If the debt burden on a house becomes too great then this would surely encourage an increrase in Br with voluntary reposessions rather than the much preferred IVA where everyone wins. No point being "debt free" and still in £60k negative equity.

Whilst I don't feel sorry for the banks in their present situation I certainly do feel sorry for their decision makers - who so often shoot themselves in the foot. ( in some cases both feet at the same time)

[MelanieGiles]

We are seeing a greater use of Charging Orders across the board now Paul, and this serves as a timely warning for anyone contemplating their financial difficulties to act with haste and thus preserve their asset position for the benefit of all creditors if they are in an insolvent position.