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Greater court protection for homeowners: consultation

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  • Greater court protection for homeowners: consultation

    Greater court protection for homeowners: consultation - http://www.justice.gov.uk/consultati...s-for-sale.pdf

    Consultation on whether a minimum threshold should be imposed on Order for Sale applications in relation to Consumer Credit Act debts only

    05 February 2010
    A consultation on whether homeowners who have failed to repay consumer credit debts should have accrued a minimum level of debt before a court can order the sale of their home has been released today.
    Under the current system, 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, when a judge decides that the property must be sold immediately to settle the unsecured debt.
    Today’s consultation asks whether a minimum level of consumer credit debt should be set in law before an order for sale can be issued.
    Justice Minister Bridget Prentice said:
    ‘We know that only a small proportion of charging orders result in the property being sold, so it’s rare for a debtor to lose their home because of things such as unpaid credit cards. 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.
    ‘But it’s important that the government consider 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. We’re asking for views on whether a minimum threshold should be introduced in law, to prevent this from occurring.’
    The consultation will last until 30 April 2010.
    Notes to editors

    1. A charging order is a court order allowing a creditor to secure a debt by placing a charge on the debtor’s immoveable property, usually a house or land, although it can apply to shares. A charging order also allows a creditor to apply subsequently to the court for an order for sale. Charging orders therefore provide a means by which a creditor can gain access to any equity a debtor holds in a property.
    2. An order for sale can be made by a court against a property with a charging order placed on it, allowing creditors to recoup the money owing to them more quickly.
    3. Orders for sale consultation



    consultation paper.

    1. Do you agree there should be a threshold below which a creditor could not enforce a charging order through an order for sale for debts that originally arose under a regulated consumer credit agreement?

    2. If so, what do you consider would be an appropriate threshold level and why?
    Last edited by Amethyst; 9th February 2010, 11:14:AM.
    #staysafestayhome

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

    Received a Court Claim? Read >>>>> First Steps

  • #2
    Re: Greater court protection for homeowners: consultation

    Originally posted by Amethyst View Post
    Greater court protection for homeowners: consultation - http://www.justice.gov.uk/consultati...s-for-sale.pdf

    Consultation on whether a minimum threshold should be imposed on Order for Sale applications in relation to Consumer Credit Act debts only

    05 February 2010
    A consultation on whether homeowners who have failed to repay consumer credit debts should have accrued a minimum level of debt before a court can order the sale of their home has been released today.
    Under the current system, 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, when a judge decides that the property must be sold immediately to settle the unsecured debt.
    Today’s consultation asks whether a minimum level of consumer credit debt should be set in law before an order for sale can be issued.
    Justice Minister Bridget Prentice said:
    ‘We know that only a small proportion of charging orders result in the property being sold, so it’s rare for a debtor to lose their home because of things such as unpaid credit cards. 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.
    ‘But it’s important that the government consider 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. We’re asking for views on whether a minimum threshold should be introduced in law, to prevent this from occurring.’
    The consultation will last until 30 April 2010.
    Notes to editors

    1. A charging order is a court order allowing a creditor to secure a debt by placing a charge on the debtor’s immoveable property, usually a house or land, although it can apply to shares. A charging order also allows a creditor to apply subsequently to the court for an order for sale. Charging orders therefore provide a means by which a creditor can gain access to any equity a debtor holds in a property.
    2. An order for sale can be made by a court against a property with a charging order placed on it, allowing creditors to recoup the money owing to them more quickly.
    3. Orders for sale consultation


    consultation paper.

    1. Do you agree there should be a threshold below which a creditor could not enforce a charging order through an order for sale for debts that originally arose under a regulated consumer credit agreement?

    2. If so, what do you consider would be an appropriate threshold level and why?
    £20.000 In view the said debt was "Unsecured" and a greater proportion of interest added to a higher level. If I am reading threshold correctly.

    Comment


    • #3
      Re: Greater court protection for homeowners: consultation

      I'm finding this a bit thorny, as although I think there should be a threshold to stop the 'sledgehammer to crack the nut' merchants, the danger will be that there will be an implied assumption that anything over the set threshold will 'automatically' be granted a charging order.

      Even if a threshold is decided upon, it must be made clear to everyone (including the courts) that a charging order is decided on only after very careful consideration of the circumstances of the individual case.
      CAVEAT LECTOR

      This is only my opinion - "Opinions are made to be changed --or how is truth to be got at?" (Byron)

      You and I do not see things as they are. We see things as we are.
      Cohen, Herb


      There is danger when a man throws his tongue into high gear before he
      gets his brain a-going.
      Phelps, C. C.


      "They couldn't hit an elephant at this distance!"
      The last words of John Sedgwick

      Comment


      • #4
        Re: Greater court protection for homeowners: consultation

        I doubt it would happen, but for unsecured debts wouldn't it be far safer and simpler to go for a system whereby a charge can be applied (but with stunted interest from the moment of charge being applied) BUT remove the ability to go for an order of sale after the fact.

        Comment


        • #5
          Re: Greater court protection for homeowners: consultation

          Yep, I think I'm in the 'do nothing' camp including VERY STRONGLY not implementing the Tribunal, Courts and Enforcement Part 4 EVER.
          #staysafestayhome

          Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

          Received a Court Claim? Read >>>>> First Steps

          Comment

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