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New threshold introduced for charging orders: just £1000!
http://www.credittoday.co.uk/article...harging-orders
Absolutely disgraceful! :mad2: :mad2: :mad2:
Especially when you consider that, when you take out an unsecured loan or credit card, there is no mention of the possibility of securing the debt on your property.
Creditors can secure a debtor’s property against unsecured debts as low as £1,000 due to new regulations on charging orders which have come into effect.
The Charging Orders (Order for Sale: Financial Thresholds) Regulations 2013 came into effect on Friday 5 April, introducing a threshold on the enforcement method for the first time.
Charging orders can now be sought for debts of £1,000, as opposed to the higher threshold of £25,000 promised by the government in the Coalition Agreement in 2010.
The move has prompted criticism from debt charities over the government’s change of mind and the possibility that the low threshold could lead to a huge rise in charging orders.
“The government has reneged on its promise to keep the threshold at £25,000 and we do not believe there is sufficient justification for these measures,” said a spokesperson for StepChange Debt Charity.
“The likelihood is that we will see more charging orders and this will potentially create a situation in which other creditors take similar action, which in turn places undue stress onto financially vulnerable people.”
But justice minister Helen Grant told Parliament in January that placing a high threshold on charging orders would encourage creditors to initiate bankruptcies as an alternative.
She said more debtors tend to lose their home in bankruptcy than with charging orders, therefore encouraging bankruptcy was likely to produce a much more draconian outcome for debtors.
The Charging Orders (Order for Sale: Financial Thresholds) Regulations 2013 came into effect on Friday 5 April, introducing a threshold on the enforcement method for the first time.
Charging orders can now be sought for debts of £1,000, as opposed to the higher threshold of £25,000 promised by the government in the Coalition Agreement in 2010.
The move has prompted criticism from debt charities over the government’s change of mind and the possibility that the low threshold could lead to a huge rise in charging orders.
“The government has reneged on its promise to keep the threshold at £25,000 and we do not believe there is sufficient justification for these measures,” said a spokesperson for StepChange Debt Charity.
“The likelihood is that we will see more charging orders and this will potentially create a situation in which other creditors take similar action, which in turn places undue stress onto financially vulnerable people.”
But justice minister Helen Grant told Parliament in January that placing a high threshold on charging orders would encourage creditors to initiate bankruptcies as an alternative.
She said more debtors tend to lose their home in bankruptcy than with charging orders, therefore encouraging bankruptcy was likely to produce a much more draconian outcome for debtors.
Especially when you consider that, when you take out an unsecured loan or credit card, there is no mention of the possibility of securing the debt on your property.
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