mortgage and unsecured loans ?

withoutahope

hi all,what can a lender do to me if i stop paying an unsecured loan, i cant seem to find a definitive answer,some posts suggest the lenders can do absolutely nothing due to the fact that the loan or c/card in question is unsecured against my home,afterall whats the point of unsecured v secured if they can still force me to sell my home to cover the debt,not bothered about credit rating but seriously...........what can they legally do in a court of law,would/can a judge legally make me sell/charging order etc..... really confused even though ive searched and searched,any advice greatly appreciated,ballpark figures are house value 160000,mortgage 144000,unsecured debt 30,000........

Tixy

Hi

First of all they could obtain a CCJ against you. If you then don't pay the CCJ then they could instruct bailiffs to try to recover goods or apply for an attachment of earnings (if you are employed).

Another option is to return to court and obtain a charging order against your house. The number of these is certainly increasing, creditors are increasingly using them when people do not comply with the CCJ. Usually a charging order would then sit against your property until such time as you sell it.
There is such a thing as a forced sale charging order - these are really very rare but they do exist.

I would suggest you don't just stop paying your unsecured loan. If you are genuinely having difficulties meeting you repayments then seek advice from one of the debt charities.

You say you are not bothered about your credit rating but if you stop paying your loan and get a default or CCJ you will find it gets harder to shop around for competitive mortgages - eg if you want to apply for a fixed rate mortgage as interest rates start to rise.

withoutahope

many thanks for advice,a lot of ifs and maybes in regards to unsecured loans,i guess the banking sector is a no risk business if they can get their hands on your home even though you signed up to an unsecured loan,personally i think the government should get rid of unsecured loans alltogether,whats the point afterall ? thanks again.

Tixy

Well there are plenty of people around who don't have a property to secure a loan against for starters......

Plus anyway its not an easy process to get a charging order against a debtor and you should in theory always be able to prevent one being issued (on the assumption you reply to CCJ papers and ask to pay the CCJ in installments that you can afford and then ensure you keep up with those repayments). Even if it gets past this stage and a creditor applies for a charging order there are often ways to defend against them being granted.

Its only if you don't pay what you can afford and ignore your debts that charging orders tend to become an issue.

withoutahope

hi tixy,i meant to say just making token payments not stop alltogether,basically i cant even make minimum payments at the moment and was just wondering what can/will they do to my home,many thanks for advice.