Warning-Your Home May Be at Risk if You Fail to Pay Even On Un-Secured Debts

citizenb

Like most people, I took credit out at a time when I could afford it and at no time did I ever believe I would be in a position where I would not be able to afford payments. However, there was no warning, as already mentioned previously, that in the event payments couldnt be met that this could be turned into a secured loan.

Surely there has to be some defence in the fact that there was no warning this could happen. Or perhaps even not make this law retrospective. It should only apply to new credit card deals where it should be written into the terms and conditions.

Presumably Credit Card companies have been aware of this for some time, therefore people taking out unsecured credit say in the last 12 months or so should have been warned. ?

blind-as-a-bat_2

The Bill was published in draft on 25 July 2006

So in answer to your last question yes you would have thought so

fermi

Bigdi wrote: »

You need to go to https://www.justabank.co.uk/products/dmp_supervision/index.php and scroll down to the news section. Nothing new on there yet though.

Doesn't work for me. It just boots me back to the login page. You must need to have an account.

pepe2008

RAS wrote: »

Link to the relevanat Act of Parliament.

http://www.justice.gov.uk/publications/tribunalscourtsandenforcementact.htm

I have doubts if those involved live in the real world and it was of course enacted in a rapidly rising housing market with excess credit sloshing round all over.
Apart from the personal issues for people, I wonder if the Government has the first clue about the likely economic impact of this.

The following looks really important - people need to be refering to section 93 (6)

93 Payment by instalments: making and enforcing charging orders

(1) Subsections (2), (3) and (4) make amendments to the Charging Orders Act 1979 (c. 53).
(2) In section 1 (charging orders), after subsection (5) insert—
“(6) Subsections (7) and (8) apply where, under a judgment or order of the High Court or a county court, a debtor is required to pay a sum of money by instalments.
(7) The fact that there has been no default in payment of the instalments does not prevent a charging order from being made in respect of that sum.
(8) But if there has been no default, the court must take that into account when considering the circumstances of the case under subsection (5).”
(3) In section 3 (provisions supplementing sections 1 and 2), after subsection (4) insert—
“(4A) Subsections (4C) to (4E) apply where—
(a) a debtor is required to pay a sum of money in instalments under a judgment or order of the High Court or a county court (an “instalments order”), and
(b) a charge has been imposed by a charging order in respect of that sum.
(4B) In subsections (4C) to (4E) references to the enforcement of a charge are to the making of an order for the enforcement of the charge.
(4C) The charge may not be enforced unless there has been default in payment of an instalment under the instalments order.
(4D) Rules of court may—
(a) provide that, if there has been default in payment of an instalment, the charge may be enforced only in prescribed cases, and
(b) limit the amounts for which, and the times at which, the charge may be enforced.
(4E) Except so far as otherwise provided by rules of court under subsection (4D)—
(a) the charge may be enforced, if there has been default in payment of an instalment, for the whole of the sum of money secured by the charge and the costs then remaining unpaid, or for such part as the court may order, but
(b) the charge may not be enforced unless, at the time of enforcement, the whole or part of an instalment which has become due under the instalments order remains unpaid.”
(4) In section 6(2) (meaning of references to judgment or order of High Court or county court), for “section 1” substitute “sections 1 and 3”.
(5) In section 313(4) of the Insolvency Act 1986 (c. 45) (charge on bankrupt’s home: certain provisions of section 3 of Charging Orders Act 1979 to apply), for the words before “section 3” substitute “Subsection (1), (2), (4), (5) and (6) of”.
(6) This section does not apply in a case where a judgment or order of the High Court or a county court under which a debtor is required to pay a sum of money by instalments was made, or applied for, before the coming into force of this section.

This section (6) looks a bit ambiguous but it could be read as meaning that the changes cannot be retrospective. ie if youve already got a CCJ and the instalments are up to date, then you are ok, they cannot just decide to go for a CO. It also stated that even if a CO IS in place, enforcement can only take place if the instalments are in ACTUAL arrears, so if you are late with a payment, you can still remedy it by making said payment.
There again I may be wrong.
CCCS dont appear to be overly concerned abput this as its ben washing around for ages and would be some time before any changes are made. Courts shoul definitely NOT be using these rules yet!!

pepe2008

Still signed the Petition though!

Cyril

This seems to be another knee jerk ill thought out response from this stupid Government. I can't possibly see how this can practically operate. There are going to be many more thousands of people who increasingly cannot meet their monthly obligations and will go down the DMP / IVA / CCJ route and if all of those together with anyone struggling on these now have charging orders placed on their houses the whole market will grind to a halt. The banks and lenders have been excessively greedy and increased interest rates to a point where they have caused people to go under.

What will we end up with when there will be no-one left able to borrow anything for the Banks to sell to. Houses are not selling and very few can get a mortgage anyway so any DCA could be stuck with a house that doesn't have the equity to pay off the sums owed anyway. Does the Government really have enough funds / social housing to home all these people who have been forced out, or if people have charging orders they won't / can't move again stagnating the market.

The whole thing is ridiculous if not illegal, how can you have a formal official document that both parties enter into and then change the terms half way through. Someone will challenge this through the European courts legally and it will take years to decide on.

The Government would be better to enforce lenders to pass on interest rate cuts and then everyone has a fighting chance of getting themselves straight.

PS did sign petition

mouncey

Excellent post Cyril. Can you imagine what role CAB,CCCS,Payplan and National Debtline would have if this piece of garbage went through! DMP's would be a waste of time, IVA's would be worthless and bankruptcies would increase. Hopefully government will see sense but I would doubt it with this load of wasters.

pepe2008

Exactly, so if anyone has been 'done' using these new guidelines, go back to the Court.
These are major 'proposed' changes and will hopefully get held up for years in higher Courts on test cases.
First Credit tried their hardest to convince me that they could use these methods....so they must be wrong!!!

RAS

blind-as-a-bat wrote: »

Quick update, the petition has gone from 81 yesterday to 116 since starting this thread:T

I believe it needs to be 200+ to get it refered for a formal responce so keep signing up

http://petitions.number10.gov.uk/chargingorders/

Now standing at 171, so it only needs a few more folk to get a formal response.

We can do this by tomorrow night.

BigNige

177 and counting
this is very worrying indeed. I have well over £50,000 in unsecured debt!!

Would the creditors insist in a charging order, even if there was no available equity in my property?