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Here's an interesting piece from this month's Credit Today magazine...
HM Courts Service remains "bullish" about plans that would undermine the effectiveness of charging orders following a meeting with the Civil Court Users Association as Credit Today went to press.
Under the Tribunals Courts and Enforcement Act, debtors who have some disposable income could apply to the courts for administration orders, which could compel creditors to accept a number of pence in the pound. HMCS does not want charging orders to stand in these cases, meaning creditors would lose their security.
Brian Havercroft, chairman of the CCUA, said it is trying to persuade the department not to go ahead as it will damage creditor interests. "There could be a composition order and your charging order would only return so many pence in the pound," he explained.
He added that government is not taking a consistent approach as a charging order is considered a secured debt by the Insolvency Service in Bankruptcy.
A further concern for creditors is the plan to set a limit for charging orders. This will deny those with smaller debts, such as water companies, access to the orders.
Claire Sandbrooke, chief executive of enforcement agency Shergroup, urged creditors to act now. "Look at your files and get the applications made and secured on the property because this is something they are very keen to implement. Get it done before the legislation comes in."
Havercroft said HMCS is open to consultation on the issue of debt management plans and proposals to allow courts to compel creditors to accept them. "They are saying it's not set in stone."
Under the Tribunals Courts and Enforcement Act, debtors who have some disposable income could apply to the courts for administration orders, which could compel creditors to accept a number of pence in the pound. HMCS does not want charging orders to stand in these cases, meaning creditors would lose their security.
Brian Havercroft, chairman of the CCUA, said it is trying to persuade the department not to go ahead as it will damage creditor interests. "There could be a composition order and your charging order would only return so many pence in the pound," he explained.
He added that government is not taking a consistent approach as a charging order is considered a secured debt by the Insolvency Service in Bankruptcy.
A further concern for creditors is the plan to set a limit for charging orders. This will deny those with smaller debts, such as water companies, access to the orders.
Claire Sandbrooke, chief executive of enforcement agency Shergroup, urged creditors to act now. "Look at your files and get the applications made and secured on the property because this is something they are very keen to implement. Get it done before the legislation comes in."
Havercroft said HMCS is open to consultation on the issue of debt management plans and proposals to allow courts to compel creditors to accept them. "They are saying it's not set in stone."
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