By admin | January 5th, 2009 | Credit Cards
According to recent reports some people that have credit card debt that they cannot afford to repay could end up losing their homes over the debt, even if the balance is only as small as one thousand pounds. Industry experts have said that some people could be forced to sell their homes to pay off debts as small as this as a result of a legal loophole known as a charging order. For many this is yet another risk with regards to losing the roof from over their heads.
Although the Ministry of Justice has been taking moves to try and protect homeowners at the moment as they still reel from the various damaging effects of the global credit crunch, this legal loophole could mean that some people with credit card debt could still end up losing their homes. Charging orders were introduced in 1980, but over the past two year the usage of these charging orders has increased by a massive 200 percent.
Although on hold at the moment changes and revisions are being made to the Tribunals, Courts and Enforcement Act 2007, and these changes and revision are designed to benefit to lender rather than the debtor, which means that consumers who are struggling with their credit card debt could face a forced sale if they own their home so that they can then clear their credit card debt.
One industry official stated: ‘Although the changes to the Act were put on hold to benefit debtors, there is a chance some debtors may have to sell their homes to repay smaller amounts of debts.’
Consumers that do have credit card debt are advised to try and make higher monthly repayments to try and get the debt cleared as quickly as possible, or contact a debt counsellor or their lender if they are struggling to meet their repayments.
Tags: credit card debt
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