Charging orders increase 100 per cent over 2 years
So what exactly is a charging order? Put simply it’s a second mortgage on a home that gives a creditor security on a loan or credit card debt if they find that a customer is not repaying the money they owe.
If you take out an unsecured loan or a credit card and then have trouble trying to make the repayments so fall into arrears your bank can take you to court. If you still cannot or do not pay, the court can issue a charge on your home.
New figures from the Ministry of Justice suggest that from 2005 to 2007 the increase in charging orders is near to 100 per cent.
John Fairhurst, from the debt advice company Payplan, said “Lenders are worried about people’s ability to repay and a charging order gives a guarantee to the lender that at some point in the future they will get their money back. What’s quite difficult for a creditor to do is to follow the charging order through to repossess the house” he said. “Repossessions as a result of charging orders are extremely rare.”
Lenders are prepaired to do almost anything to secure the repayments on their lending so don’t think that if you’re applying for unsecured credit it means that the debt might be written off.
If you’re struggling to keep up with debt repayments then seek professional debt advice
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