Borrowers face repossession over unsecured debts

[vetran]

Judge should ask borrower to adjust rate past & present if they want the debt converted to secured. That would stop the rate sharks. Imagine if they had a debt at 30% rate and want it secured against the home so court asks them to drop it to 5% I bet most debts would be wiped out and the borrower would be quids in. Only need a debtor to be borderline and some shark will go for it setting a legal precedent.

As some other people mentioned its really easy for us guys in the top 20% of the wage hierarchy to say never get in debt, try living on £12K.

[centurian]

Judge should ask borrower to adjust rate past & present if they want the debt converted to secured. That would stop the rate sharks. Imagine if they had a debt at 30% rate and want it secured against the home so court asks them to drop it to 5% I bet most debts would be wiped out and the borrower would be quids in. Only need a debtor to be borderline and some shark will go for it setting a legal precedent.

As some other people mentioned its really easy for us guys in the top 20% of the wage hierarchy to say never get in debt, try living on £12K.

The two aren't linked. Any debt can be "made secured" - even forgetting to take your library books back on time.

The fact that people paid a higher interest rate for what was described as an "unsecured" loan will be irrelevant to the judge. A Charging Order simply attaches an asset to a CCJ - regardless of what the CCJ was for.

"Secured" just means a few less hoops to jump through.

[vetran]

Possibly but I do feel sorry for those sucked into debt who then lose their house to a company charging 30%+. I personally would prefer to see a ceiling on interest rates on personal loans say base + 10% so if the company doesn't believe they are a good risk they don't lend. Same for credit cards.

[pzz76077]

It's all very nice and wholesome to say that they should only borrow money if it can be repaid but the average family taking in 30 grand a year with 1.5 jobs have to buy a house and live somewhere. Taking a mortgage for most people is a leap of faith on the assumption that they will have continued employment. The banks know this and do not ask to see a 25 year contract from your employers.

Some people on here have to get off their high horse and stop pontificating to the average man.

Anyone on 30 grand a year cant afford a mortgage so should not be taking one out. Only a reckless idiot would expose there family to the live that this course of action would lead to.
Sorry, I have to disagree with M Thacher on this point, not everyone can own their own homes. This is a UK unique system you have there, in Europe a much higher proportion rent. UK people only try to lie to get a mortgage because that is what they think they should be doing.

PZZ

[pzz76077]

If I take out a loan at 10%, because it's unsecured, and then they convert it to a secured loan, I want that additional 9.5% I've been paying, refunded!

Nope - you took a loan out on their terms - see your signature at the bottom of the page??

PZZ

[TimberWolf]

Taking on a 25 year commitment, such as a mortgage or a wife and kids, is more of a gamble than it was 10 years ago IMO. Especially if you work in IT.

[pzz76077]

Taking on a 25 year commitment, such as a mortgage or a wife and kids, is more of a gamble than it was 10 years ago IMO. Especially if you work in IT.

Also probably not economically feasible in the current climate in fact.

PZZ

[Menelaus]

This is, as is becoming commonplace amongst m'learned friends in the media, utter bollocks and a non-story of the worst possible kind.

The use of charging orders or, in Scotland, charges is a method that has been on the statute books essentially forever. Their use to create forced sales - especially where there are no mortgage arrears - would be frowned upon (to say the very least) in the courts.

As for the question "so what purpose do they serve?", consider this: a debtor owes the credit card company £10,000, and sell their house without clearing off their credit card - this way, if the debtor sells or remortgages his house (as he would do normally - not under coercion from their creditors) the credit card debt is cleared.

[pzz76077]

This is, as is becoming commonplace amongst m'learned friends in the media, utter bollocks and a non-story of the worst possible kind.

The use of charging orders or, in Scotland, charges is a method that has been on the statute books essentially forever. Their use to create forced sales - especially where there are no mortgage arrears - would be frowned upon (to say the very least) in the courts.

As for the question "so what purpose do they serve?", consider this: a debtor owes the credit card company £10,000, and sell their house without clearing off their credit card - this way, if the debtor sells or remortgages his house (as he would do normally - not under coercion from their creditors) the credit card debt is cleared.

Thinking about it, Im also not sure this is a symptom of today's credit market , I seem to remember stories from Dickens about people that had all their possessions (furniture etc) taken away and then sold followed by them being thrown in the poor house because they couldn't pay their debts.
Its very easy to get a charging made against a property tile that would prevent someone selling a home. It happens prior to many divorce hearings.

PZZ

[Menelaus]

Thinking about it, Im also not sure this is a symptom of today's credit market , I seem to remember stories from Dickens about people that had all their possessions (furniture etc) taken away and then sold followed by them being thrown in the poor house because they couldn't pay their debts.
Its very easy to get a charging made against a property tile that would prevent someone selling a home. It happens prior to many divorce hearings.

PZZ

Indeed - and in divorce proceedings it may be worthwhile but here charging orders are typically made to prevent disposal of the asset without the underlying debt being extinguished.