World Financial News
Warnings are being offered about the possibility of home owners losing their homes due to credit card debt. Debt charities have been launching campaigns against the high street banks for home repossessions that are just to recover a few thousand pounds. These borrowers have been struggling to pay their credit card debts or personal loans, and now they are at risk of losing their home.
This is because the lenders want the debt to be secure. The banks in these struggling times feel too unsettled to have high debts out there. They want to stop the struggle with unsecured debt by making sure a home is used as collateral even against credit cards.
A charging order is secured against a property for a debt. The creditors are allowed to issue an order for sale in order to recover the money from the debt by selling the property. This is done even for small sums of money. It is no longer a matter of not paying the mortgage on time for some families. Instead it is about having too much unsecured debt, and the bank no longer wants this around.
This problem has been increasing since 2000. In 2007 74 percent of the applications for order of sale were agreed by the courts. Thus these individuals lost their homes in a sale. The law currently states that a creditor can apply for this order if a CCJ or county court judgement has been issued to settle the debts. However, individuals from the charity have started seeing that this rule is not being followed. Many of the recent cases have no CCJ’s in which they have failed to pay the installment agreed upon. Instead the banks are just acting and getting the order passed, which means even credit card debt can mean you lose your home.
This type of story is not just common to the UK, but many other countries around Europe, including Spain, Portugal and Germany which have been hit very hard by the recession. If you look on Spanish credit card sites you will see that the number of cards they now offer is considerably lower than it was 2 years ago as the industry is starting to be much more careful who they lend their money too. There is now a smaller number of offerings and focus more on the quality of loan rather than quantity.
