Unsecure debts.

Boromoor

I read somewhere in this site that the courts do not have the power place a charge on your house to cover an unsecured credit card debt. What about vehicle leasing? I was in a business partnership with a friend running a haulage company, stupid I know butwhat can I say. Anyway, we had two 40 ton trailers on lease purchase which we had to return, the leasing company sold these trailers leaving us with shortfall in what we owed them. It now turns out that they have put a charge on both our houses for the full amount owed, in other words twice what we actually owe. any advice would be welcome.

Debt_Free_Chick

Firstly, it depends on the term of the leasing agreement. Did this state that it would be secured against your homes?

Secondly, a creditor can apply to have a charging order secured against your home for a debt that was originally unsecured. The process, however, involves the Courts so you would have been informed if they were applying for a charging order.

The normal process is - default on debt, creditor applies for CCJ (County Court Judgement) for the whole amount outstanding. With a CCJ you, again, are notified by the Court that the application for the CCJ has been made. You get the opportunity to propose a payment plan i.e. to pay by instalments. If you default on this plan, then the creditor can apply for the charging order. This is, however, not often used.

It sounds as though the leasing agreement was secured. Check the terms of the agreement first.