Will your credit card put your home at risk?

11th September 2006

Homes could be at risk of repossession by credit card companies - so says an article by Joe Morgan in today's Times (October 24).

The Times article says:

"Already a harder line towards those failing to pay their debts is being taken by the high-street banks, which are increasingly going to court to secure their loans against a debtor’s house.

The number of “charging orders” has jumped from 13,000 in 1999 to 45,000 last year, with more and more people failing to make agreed payments to settle debts. A charging order means that, when a home is sold and the mortgage cleared, any money left over pays the outstanding bank or credit card debt. It also means that the creditor can apply to the courts for property, land and even a person’s shares to be sold to meet the debt."

ClearDebt thinks this is a strange development - considering it's from the same government that wants to introduce a simple, low-cost IVA (which we applaud) to make this debt-forgiving procedure more accessible.

We think many have got into debt because of the easy availibility of credit - this change will do nothing to persuade lenders to be more prudent.

See the Times article here.

Links to related ClearDebt articles:

Credit card users need minimum payment education
Credit card attempts to teach financial discipline
Credit card website aims to advise would-be debtors
Store Card pushers criticised for not knowing products
Credit Card spending keeping Brits from reality
Charges cut at 3 credit card providers
Which? wants credit card charges explanation
"UFOs" identified as a potential source of debt
Credit Card Debt
Credit card guide recommends right choice
Taking responsibility - credit card debt dropped by more than 40%

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