Credit Card Debt

Dan:_4

tomterm8 wrote: »

Unfortunatly, I simply don't think you are right. Charges are becoming increasingly automatic. Especially with the new courts and enforcement act.

As long as your making token payments of even a fiver a month, you can avoid having a charge put on your house.

tomterm8

Dan: wrote: »

As long as your making token payments of even a fiver a month, you can avoid having a charge put on your house.

As I said, that is roughly the case at the moment, but the reality is that several courts have refused to grant installment orders until a charging order hearing has taken place. In addition, under the Tribunals, Courts and enforcement act 2007 s93, the law has been ammended on charging orders so that courts have the authority to issue a charging order even if you are up to date on installments. I'm not sure when the provisions kick in, but I believe it is in the next year, The charge can't be enforced unless you are in arrears at the time of the enforcement.

bigfatbelly

You can't turn an unsecured debt into a secured debt. Credit card debts are unsecured debts and the companies cannot put a charge against your home if you owe them money. Against the law.

If you go bankrupt then all your debts become secured if you have equity - including credit card debts. But if you make token payments then the CC companies cannot even take you to court. End of.

I know of 2 people who have run up debts on their credit cards - one as much as £25k in total and he pays off something like a tenner a month. Every so often he gets letters offering him a deal to pay half what he owes in one lump sum and they'll write the rest off. He can't do that as he was made redundant last September and is stony broke. So he just gives them a tenner a month and they have to accept it. As it happens he's in neg equity anyway so fat lot of good it would do if they were able to put a charge against his home but the y can't do, and they will never be able to - the debt is UNSECURED.

nearlynew

bigfatbelly wrote: »

You can't turn an unsecured debt into a secured debt. Credit card debts are unsecured debts and the companies cannot put a charge against your home if you owe them money. Against the law.
.

I'm no expert in these matters, but I don't think this is correct.
As others have said, changes to the law mean that they now can

tomterm8

bigfatbelly wrote: »

You can't turn an unsecured debt into a secured debt. Credit card debts are unsecured debts and the companies cannot put a charge against your home if you owe them money. Against the law.

If you go bankrupt then all your debts become secured if you have equity - including credit card debts. But if you make token payments then the CC companies cannot even take you to court. End of.

I know of 2 people who have run up debts on their credit cards - one as much as £25k in total and he pays off something like a tenner a month. Every so often he gets letters offering him a deal to pay half what he owes in one lump sum and they'll write the rest off. He can't do that as he was made redundant last September and is stony broke. So he just gives them a tenner a month and they have to accept it. As it happens he's in neg equity anyway so fat lot of good it would do if they were able to put a charge against his home but the y can't do, and they will never be able to - the debt is UNSECURED.

Bigfatbelly,I disagree with your quote. Your statement that "You can't turn an unsecured debt into a secured debt" conflicts with the law as it has existed since 1979. On default, a creditor can obtain a county court judgement. Since The Charging Orders Act 1979, the court has had the power to enforce a CCJ in england and wales via a charge. This has the effect of securing the CCJ against a property.

In the event a charge is issued, the creditor can apply to reposess the property. It can not do so as long as an installment order is in place, and is being complied with.

The court is not obliged to grant an installment order unless it considers it just. Until recently, the court has not been able to place a charge on a property if the debtor is complying with a installment order; the labour government amended this law in the Tribunals, Courts and enforcement act 2007 s93, which is going to be implemented in the near future (we are in the transitional period) after which a charge can be granted against a property even if an installment order is in place, and the debtor is not in arrears under the installment order.

bigfatbelly

tomterm8 wrote: »

Bigfatbelly,I disagree with your quote. Your statement that "You can't turn an unsecured debt into a secured debt" conflicts with the law as it has existed since 1979. On default, a creditor can obtain a county court judgement. Since The Charging Orders Act 1979, the court has had the power to enforce a CCJ in england and wales via a charge. This has the effect of securing the CCJ against a property.

In the event a charge is issued, the creditor can apply to reposess the property. It can not do so as long as an installment order is in place, and is being complied with.

The court is not obliged to grant an installment order unless it considers it just. Until recently, the court has not been able to place a charge on a property if the debtor is complying with a installment order; the labour government amended this law in the Tribunals, Courts and enforcement act 2007 s93, which is going to be implemented in the near future (we are in the transitional period) after which a charge can be granted against a property even if an installment order is in place, and the debtor is not in arrears under the installment order.

Not according to my mate's lawyer they can't. Maybe they'll be able to put a charge order aginst debts run up AFTER the law (or IF) the law comes into practice, but they won't be able to put charges on property against debts incurred prior to the new bill coming out. They will be exempt. They'd be unlawful for one thing! Can't happen.

lostinrates

Is tomterm a solicitor? Have I misremembered that ?(sorry tomterm)

tomterm8

bigfatbelly wrote: »

Not according to my mate's lawyer they can't. Maybe they'll be able to put a charge order aginst debts run up AFTER the law (or IF) the law comes into practice, but they won't be able to put charges on property against debts incurred prior to the new bill coming out. They will be exempt. They'd be unlawful for one thing! Can't happen.

That's not quite correct in the general case - probably is for your mate though. What you are refering to is this

the_act wrote:

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

If an installment order is made, or applied for, before the relevant section comes into force, then the changes don't apply. However, the court still has the power to refuse to grant the installment order until a charge is issued, which is a loophole that exists under the current law.

If a CCJ is granted, and the debtor doesn't apply for an installment order before the relevant section comes into force, a charge could still be issued even if an installment order was granted after the provision came into force.

tomterm8

lostinrates wrote: »

Is tomterm a solicitor? Have I misremembered that ?(sorry tomterm)

I am not a solicitor.

lostinrates

tomterm8 wrote: »

I am not a solicitor.

My apologies! I have misremembered then. I do it all the time.:o