Plans by the government and lenders to tackle credit card debt could put homes at risk of repossession, it is feared.Plans being prepared by the Department for Constitutional Affairs will make it easier for banks, credit card firms and major stores to repossess debtors’ homes. The department is planning legislation to allow charging orders to be made even against those who are keeping up the agreed payments to pay off their debts. A charging order is a means of securing a debt by placing a charge onto the debtor’s immovable property. The order 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. At present the court cannot make a charging order when payments due under an instalment order are not in arrears. But the DCA is proposing that enforcement by way of a charging order should be made available in cases in which debtors are not in arrears with an instalment order. The government believes that allowing lenders to obtain a charging order even when someone is making agreed payments closes a loophole in the law. It says at present people who have agreed to pay in small instalments can benefit from the sale of their property because they do not have to pay off the outstanding sum. The DCA paper states: “The debtor therefore obtains a capital sum and is under no obligation to make any payments towards the judgement debt.” David Lane, regional manager at Genworth Financial Payment Protection Insurance, says that if the proposals outlined by the DCA are implemented, the government and lenders will have a responsibility to ensure borrowers are aware of the risks they may face. He adds: “Personal debt isreaching new levels and over 30% of households have no savings to fall back on. There is now a real needfor more to be done to educate the public about the importance of building a financial safety net, and the role payment protection can play.”
- Top trends
Britannia has launched a two-year fixed rate mortgage offering a rate of 4.29% up to 95% LTV. This is a drop of 20 basis points as the previous rate was 4.49%. The initial rate on Britannia’s two-year discount tracker also falls to 4.35%.
The FSA Handbook section of the regulator’s website contains much more than just a downloadable copy of the publication and should be of interest to brokers, says Bill Warren
Yvette Cooper, housing minister, has defended Home Information Packs as good for consumers as the government published draft regulations for consultation of the contends of the packs. Cooper says that HIPs, which are being introduced by the government in February 2007, will benefit first-time buyers and aim to cut the overall costs of buying and […]
The cost of corporate ID fraud could be as high as 50m per year and Equifax is tackling the problem with its newly introduced anti-fraud tools. Working in partnership with the Metropolitan Police’s Stirling initiative, launched earlier this year, Equifax has introduced two services to protect businesses. Stirling is the police initiative targeting criminals who […]
Jamie Clark gives the lowdown on what happens when an employer fails to pay auto-enrolment fines. An employer has been served County Court Judgement (CCJ) for failing to pay auto-enrolment fines, according to the latest data from The Pensions Regulator (TPR). The CCJ TPR cite a case where a removal company continually ignored them despite […]
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