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Extra home protection considered for debtors

Extra home protection considered for debtors

Category: Credit cards

Updated: 09/02/2010
First Published: 08/02/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Homeowners facing the possibility of losing their property as a consequence of failing to repay consumer credit debts could be afforded a greater level of protection, if new proposals get the go ahead.

At present, property owners who have unsecured debts such as credit or store cards, which they have been unable to pay, can have a charging order placed against their property to secure the debts.

In a small number of cases, the charging order is followed by an order for sale, meaning the property has to be sold immediately to settle the debt.

However, the Ministry of Justice is considering whether new rules should be introduced that would mean a minimum level of debt would have to be accrued before the enforced sale of a home could be ordered.

"There are currently a number of safeguards in place to protect homeowners, while ensuring the creditors who need to recoup their money are able to do so," said Justice Minister Bridget Prentice.

"But it's important that the Government considers whether there is a risk that the numbers will increase due to the current economic situation, and whether this could result in more people losing their homes because of relatively low levels of debt which they are unable to pay."

The consultation period will last until 30 April 2010, after which a final decision will be made.

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