Latest Debt News
Government increases repossession risk
24/10/2005 17:45:00
Government changes to the way in which credit card companies recover debt owed to them could have serious repercussions for homeowners.
In a Department for Constitutional Affairs paper, the government plans to give more power to banks and credit card firms to implement charging orders, the Times reports.
Charging orders, which have more than tripled in number since 1999, mean that any money left over from the sale of a home or settling of a mortgage goes straight to paying outstanding credit card debts.
Currently, charging orders can be enforced if the person in debt fails to pay back two successive debt instalments.
However, the Department for Constitutional Affairs intends to allow charging orders to be made even if debtors are up to date on payments, making it easier for their home to be repossessed.
"The Government is committed to tackling over-indebtedness and addressing concerns about increased levels of consumer debt," a department paper says.
With the average cardholder facing debts of £1,360, debt advisors want health warnings to be issued with loans and credit cards to advise people about the risks to their homes.
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