Is unsecured lending really unsecured?

Norfolk_Jim

Sorry if this is a bit of a dumb question but is unsecured lending really unsecured or can an unsecured creditor go to court and get the debt secured on a debtors house?

fermi

If they can get a CCJ they can try for a charging order.

https://www.nationaldebtline.org/EW/factsheets/Pages/countycourtchargingorders/chargingorderadvice.aspx

Norfolk_Jim

So creditors could apply for a CCJ even if the debtor had arranged a DMP with one of the main debt charities?

sourcrates

Always a possibility yes.

Depending on the clients situation obviously.

fatbelly

It's not a charge like a mortgage. If you default on a mortgage you will lose your house but orders for sale on COs are very rarely given. If it's a sole debt on a jointly owned property, it is only recorder as a restriction, not a charge.

Interest after judgement is complex but I think National Debtline has a factsheet on it

sourcrates

To the best of my knowledge 8% interest is whats added to court claims, so I would assume the same would apply in the scenario you describe, at the most, as Fatbelly said, the rules are complex and interest may not be charged at all.

sourcrates

Its a charging order, or if jointly owned, just a restriction.

A legal charge that must be paid on sale of the property.

However if your paying the debt off via monthly payments then a court would not make an order for sale, common sense is always applied.

Orders for sale are extremely rare.