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[sequenci]

Magda, just as an aside. What do you recomend a creditor to do for debt enforcement rather than a charging order? What would be deemed as a reasonable option taking into consideration of a debtor's circumstances and their ability to repay the debt etc?

[MAGDA]

Originally Posted by sequenci

Magda, just as an aside. What do you recomend a creditor to do for debt enforcement rather than a charging order? What would be deemed as a reasonable option taking into consideration of a debtor's circumstances and their ability to repay the debt etc?

Hi, taking into account a debtor's circumstances and ability to pay, which a court would do anyway, I think the creditor, if a debtor refuses to pay for no good reason, i.e., the creditor has proven that the debt is covered by a valid CCA, the debtor was defaulted correctly, etc, then the creditor would have the option, as they do now, to obtain a judgement in court ensuring that the debt is repaid by instalments at an amount the debtor can afford. If the claimant feels the instalment order is too low, then of course they have the option of asking for a redetermination and to request the debt be repaid at a higher amount. They can even apply for financial disclosure etc, if they feel the OP isn't declaring their full income. I think this in itself is sufficient, given that the debt we are talking about is unsecured.

However, If the debtor is already maintaining regular repayments on a debt, then this action should not be necessary.

If the creditor wishes to take advantage of the option of a debt being secured, then they should offer a secured loan at the outset, reflected in the favourable interest rate offered. The debt industry is a huge industry, generating massive income for those involved and many creditors have lent money in an extremely reckless way, not caring whether the person could afford to pay the money back. We are all credit searched and many people owing thousands of pounds in unsecured debt were still granted more credit despite being on a relatively low income by comparison. Is the debtor in this situation solely to blame. No, I don't think so. I know from experience that the sole aim of many DCA's (and OCs) is to secure a charge, this is the classic threat they use, even though the person concerned is endeavouring to pay the debt back. We have recently been taken to court, when the claimant issued four claims against us within days of each other, because we wouldn't agree to a voluntary charge, although I had maintained repayments on these accounts for the last four years without fail. It has so far backfired on the DCA though as three out of four of the claims so far have been struck out or discontinued.

Debt, in my opinion (and this is just my opinion) should be either one thing or the other, i.e., secured, or not secured. Magda

[pugsley]

it is now closed

good luck

[Aequitas]

How about this for a rule then:

If you take out a loan and your circumstances change so that you cannot keep up payments no charging order should be put on your property unless you fail to keep to the revised payments ordered by the court (which will have been set to take account of your cirumstances).

If you take out a loan and your circumstances have not changed there should be no bar to the placing of a charging order. That is because it is reasonable to assume that if you take out a loan you have both the intention and ability to meet the payments you agreed to make. If you overcommit yourself you should be prepared to take the consequences.

[MAGDA]

Originally Posted by Aequitas

How about this for a rule then:

If you take out a loan and your circumstances change so that you cannot keep up payments no charging order should be put on your property unless you fail to keep to the revised payments ordered by the court (which will have been set to take account of your cirumstances).

If you take out a loan and your circumstances have not changed there should be no bar to the placing of a charging order. That is because it is reasonable to assume that if you take out a loan you have both the intention and ability to meet the payments you agreed to make. If you overcommit yourself you should be prepared to take the consequences.

The problem with this is that we are all human. I think most people on this forum are either in debt, or have been in debt, and it isn't a situation any of us set out to be in. It is very easy to overcommit and not realise at the time that you are because you genuinely believe you can meet all of the repayments required. Many people in debt bury their heads in the sand and the full extent of the problem is pushed to one side. I still think that even in this situation the loan or credit card debt should not become a secured one by way of a charge. I do think that if the debt is genuine then the debtor should of course attempt to clear it at a rate they can afford, but to do so, they need the co-operation of the creditor, and most of the time, they are far from helpful, which is why many people then choose to go down the route where they stop repayments due to an unenforceable agreement. As mentioned before, creditors were practically forcing cards on people who couldn't really afford them a few years ago and then appeared to be surprised when it all went wrong. The creditor takes the risk by offering a loan which is unsecured and even with charging orders in operation, there is no guarantee that they will get one if the OP understand their legal rights and defends the claim accordingly. A lot of the time they manage to get these charging orders as people simply do not know their rights, and they exploit this. To have complete security the creditor must offer a secured loan and both parties are then fully aware of the repercussions in the event of a default, or in the case of unsecured debt, be a lot less reckless when deciding who to lend money to. They should not be able to have it both ways. Magda

[bish]

I have to agree with Magda here, as I stated in my previous post my loan was paid back in full, it was only the late payment charges that prompted the threat of a charging order. Late payment charges that where clearly unfair as stated by the OFT in April 2006, yet still I find a company willing to ignore this and chace me for them and apply threats of charging orders. This was not a cowboy company, this was part of the Lloyds TSB group, the very group that is about to become a super bank. As Magda and Aequitas clearly say a judge is unlikely to allow such an order to proceed the distress caused by such threats is enough in itself. Again as Magda states most people, including myself, do not realise that your home could be at risk, all be it at the discretion of a judge, if you default on an unsecured loan. I think that point has been shown to be true on this post alone. Therefore all loans should carry the warning that if you do not keep up repayments or default by making a late payment etc your home may be at risk, in bold. Perhaps a lot more people would reconcider taking out such a loan. I am quite sure that in the coming weeks, months, and years there will be many DCA companies willing to take advantage of the words unsecured and secured. Words can be very deceptive.

[MAGDA]

Originally Posted by bish

I have to agree with Magda here, as I stated in my previous post my loan was paid back in full, it was only the late payment charges that prompted the threat of a charging order. Late payment charges that where clearly unfair as stated by the OFT in April 2006, yet still I find a company willing to ignore this and chace me for them and apply threats of charging orders. This was not a cowboy company, this was part of the Lloyds TSB group, the very group that is about to become a super bank. As Magda and Aequitas clearly say a judge is unlikely to allow such an order to proceed the distress caused by such threats is enough in itself. Again as Magda states most people, including myself, do not realise that your home could be at risk, all be it at the discretion of a judge, if you default on an unsecured loan. I think that point has been shown to be true on this post alone. Therefore all loans should carry the warning that if you do not keep up repayments or default by making a late payment etc your home may be at risk, in bold. Perhaps a lot more people would reconcider taking out such a loan. I am quite sure that in the coming weeks, months, and years there will be many DCA companies willing to take advantage of the words unsecured and secured. Words can be very deceptive.

I think as you say bish, when you have been on the receiving end of this, you realise just how wrong the whole charging order process is. Magda

[Aequitas]

There is something in what you say and we can agree that finance companies are wicked. However, I must express some unease as the following seems to flow from your comments:

1. People should be allowed to borrow money on certain terms, but then be afforded the chance to alter the terms to make them more favourable.

2. Someone whose assets exceed their debts should be allowed to keep the assets rather than selling them to repay their debts. Further, the assets they should be allowed to keep should not even be allowed to be charged with what they owe, even if the charge does not put their asset at risk, because at some undefinable time in the future it may cause them inconvenience and actually put them in the position of having to pay back what they owe.

3. People should not take responsibilty for their actions.

The only reason that unsecured loans are expensive is because there is a relatively high proportion of defaulters. The defaulters raise the cost for the compliers, just as shoplifting puts up prices in the shops. If charging orders are banned the finance companies will lose more money and put the cost of borrowing up further. People will borrow secure in the knowledge that the remedies for default will not put their assets at risk of being charged.

Everyone is very keen to curb the powers of lenders to recover their money, but I wonder if they are equally keen to curb the power of defaulters to borrow. How about a law that makes it a criminal offence to borrow money without the consent of the court if you have a CCJ outstanding?

[bish]

Know that is not what I am saying, I took out a loan for a car, the cost of that loan was £7000 + £3000 interest totaling £10000. I agreed to that and I also agreed to compensate the lender for my breaches of contract, under the terms and conditions of the contract. I paid back all of the borrowings plus the interest, the loan came to an end, I paid. The issue is can the lender then apply a charging order against charges that are clearly against what the OFT regard as unfair charges. You can not justify applying a CO to charges that are deamed unfair by the OFT. As I have already stated two wrongs do not make a right I do not want to get in to a protracted argument over the rights and wrongs of consumer contracts, but I must re-itterate what this site was formed for, the protection of the consumer against bad business practice. The consumer has relitivly no say over how these contracts are written, so can not be held responsible for mistakes made, we are not experts. If the provider of such agreements have made mistakes, well that is their problem not ours.

[bish]

AEQUITAS Who Do you Work For?.

[MAGDA]

Originally Posted by Aequitas

There is something in what you say and we can agree that finance companies are wicked. However, I must express some unease as the following seems to flow from your comments:

1. People should be allowed to borrow money on certain terms, but then be afforded the chance to alter the terms to make them more favourable.

It isn't a case of making the terms more favourable, it's just that in reality, there are times when someone, for whatever reason is unable to meet the normal repayments, but a least if they are willing to try to pay something (and sometimes the amount isn't that far off the normal payment anyway) this should be allowable. A lot of the time, as bish has said, the debt is made up of unlawful charges (I had a debt recently the DCA was pursuing me for - same one who recently took me to court, and when I actually looked at the figures, they owed me money, and they have now 'gone away') In addition, DCAs purchase these debts for a pittance and then immediately demand repayment of the full amount, not willing to negoitate or come to any arrangement.

2. Someone whose assets exceed their debts should be allowed to keep the assets rather than selling them to repay their debts. Further, the assets they should be allowed to keep should not even be allowed to be charged with what they owe, even if the charge does not put their asset at risk, because at some undefinable time in the future it may cause them inconvenience and actually put them in the position of having to pay back what they owe.

Again, you have to remember that the debt was not secured, a decision the creditor made at the outset, when deciding to lend on this basis. If the debt wasn't secured, for example on a car, or a house, or whatever, why then should that person feel compelled to sell these item at a later date if the account falls into difficulty. They have been making payments at a higher rate of interest to reflect the risk involved. What that person can do, however, is to offer reduced repayments to clear the debt as quickly as possible.
3. People should not take responsibilty for their actions.

All of the people in this country who are currently on DMPs are taking responsibility for their actions - very much so.

The only reason that unsecured loans are expensive is because there is a relatively high proportion of defaulters. The defaulters raise the cost for the compliers, just as shoplifting puts up prices in the shops. If charging orders are banned the finance companies will lose more money and put the cost of borrowing up further. People will borrow secure in the knowledge that the remedies for default will not put their assets at risk of being charged.

Yes, that is one way to look at it. what you actually forget is that most fianance companies sell the debt on as soon as it hits problems. They wash their hands of it. The high number of defaulters has largely been due to the reckless lending by banks, I remember, as I'm sure we all do, a time when the lenders were actively seeking to encourage people to take out more and more debt - every shop you walked in to had huge signs, 'buy now, pay 18 months later' etc. and this is where the problem, IMO, stems from. If lenders lend more responsibly, then to a large extent, the number of defaulters will reduce. Of course, we must also borrow resonsibly, which I'm sure anyone who has been in debt, realises anyway.

Everyone is very keen to curb the powers of lenders to recover their money, but I wonder if they are equally keen to curb the power of defaulters to borrow. How about a law that makes it a criminal offence to borrow money without the consent of the court if you have a CCJ outstanding?

No, this country has become enough of a nanny state already, I don't think that would be very helpful. Defaulters already have their power to borrow money curbed - you should take a look at my credit file, no chance of borrowing anything there! That is the whole point I made earlier, creditors credit search us all, but still, were lending money to people already seriously in debt.

Magda

[banker_rhymes_with]

The problem here is we are talking about the froth on top of the real problem.

The Debt Industry wants to blame the Consumer, when the real problem is the Debt Industry itself.

We've reached the scary situation where the bankers have been given everything they ever wanted, and look where it has taken us. We are now a nation of Debt Slaves with little to show for all the number money Debt we are supposed to have spent.

Meanwhile, the bankers have been steadily increasing their percentage share of real Assets, such as property and land. The Charging Order issues are just another example of their hunger to acquire an even greater percentage of our Nation's assets during this next Recession.

We have a pro-bank Government literally pooping itself because it knows the over-inflated Debt Bubble is close to irreparable bursting point. And yet the bankers are being selfish, despite being thrown the most expensive life-line in History.

There is no easy solution to this banking mess, but I know that trying to borrow out of it will only push the problem into the future, and will make the task of addressing the issues all the harder.

Somehow, we need to take charge of the bankers, and re-introduce very tight limits on their ability to create money from nothing. Then we need to impose tight limits on how much they can earn from money, and especially from money created from nothing.

All that you see on the news at the moment is missing the underlying point. I have yet to see anyone question the underlying role of the banks in all of this. Talking about levels of borrowing and spending is just discussing the symptoms and not the cause.

Rather than fix the issue by doing exactly what the bankers want, i.e. throwing more number money at the problem to get Consumers borrowing again, I think the alternative should've been to leave everything as it was...and tackle the banks instead.

How?

Cap all Interest, then constrain the bankers' ability to generate money from nothing, and then impose harsh fines on any bank that fails to lend within the new Capped levels.

For example, bring back the Liquidity Ratio, and force banks to align lending to an actual Reserve, that prevents their lending from going beyond certain limits without extra real Cash being injected at the base.

Then Cap the Interest they can charge to a set Level above Base Rates, say, +5% maximum to include Mortgages, Loans and particularly Credit Cards.

Then fine them if they do not lend. Say, a fine based on a percentage of their Reserves if it's clear they are refusing to lend. Or a fine that imposes a harsher Liquidity Ratio on the bank in question...forcing them to only loan what they have as real Reserves. They'll soon get lending again if faced with a ban on creating any number money is imposed on them.

Other useful steps may be needed, such as to make it compulsory for all banks to issue a Basic Bank Account with Debit Card to anyone who asks for one who can also prove their ID. These basic accounts would have No Overdrafts, as lending is not needed just to have an operational Account. These Accounts would earn Interest, and bank charges should be zero. The bankers can earn their money from the difference between the Rate they Pay to these Accounts, and between the Rate they lend out to borrowers who borrow any surplus of available funds the bank holds in relation to these basic Accounts.

Banks can control accounts to stay above a Zero balance if they want to. Such a step would allow many people to function at a basic level, who are currently pushed outside of the financial system due to the power of the CRAs and the clear evidence of Credit Blacklisting.

The Recession will still be nasty, but at least we'd be heading in the right direction. The bankers would be forced to work within similar constraints to the rest of us, and they'd have to start lending appropriately because the fat profits they once enjoyed for doing very little would no longer be attainable. If they get short of funds, then they'll just have to Sell off some of the Assets they have steadily acquired over the last 50 Years or so, starting with their expensive HQs in London.

China is waking up to the fact that the number money we are paying them to produce for us, is potentially worthless. If the Debt Bubble bursts and that fact becomes a reality...we'll lose probably 80% of the goods we are currently used to having. These are goods we can no longer produce, so if the Debt Bubble does burst, we will lose them until we can either start making them again, or until we can restore confidence that our number money has at least some value because it is again tied to actual Reserves.

Likewise, Nations who produce vital supplies such as Gas and Oil and getting twitchy too, as they won't be too keen to accept our worthless number money in Payment for real commodities.

That's the real bubble burst the banking Government are so scared about. They know that if they cannot prop up our Debt Based Economy, then we could face very real collapse. Our ability to Buy and Import will collapse, and with it our access to all the goods and services we can no longer make or produce for ourselves (because making/producing them never fitted into the banking ideal of how a rotten to the core Debt Based Economy should operate).

This is what they are so desperate to avoid, and yet their solution is to push the problem into the future, when it could become an even greater problem than if we faced up to it right now.

We are not alone, because at least 20 other Nations have allowed themselves to get into the same banking mess. Sadly, we stand out as being one of the worst, possibly only second to the USA.

But at least this Christmas will be a good one. Hang on to that memory, because 2009 onwards could be very bleak.

Cheers,
BRW

[MAGDA]

Well said Banker and I too think the future is bleak. That is something else the government should be focussing on - the fact that we have no real industry in this country any more. The jobs are all outsourced and unfortunately, just looking at the situation locally even, there is going to be massive unemployment as all the remaining industries (e.g., car manufacturing) pull out. For a long time now, companies have been shutting down operations here and shifting them abroad to save money, and the government has allowed them to do so. I think the debt industry is pretty much all that is left! As for Gordon Brown's latest idea to cut VAT, I hardly think that is going to solve the problems this country currently has. regards, magda

[Aequitas]

Originally Posted by bish

AEQUITAS Who Do you Work For?.

I do not work for anyone, indeed I do not work at all.

I think you need to know where I am coming from. I am a bit of a leftie. Society is not organised the way I would like to see it organised. If society were organised the way I would like to see it organised everyone would earn enough to have a fulfilling life without having to borrow money to get the things they need - not the same as the things they may want. However, the way that society is organised, at least in modern representative democracies, is fairly tolerable for most of the time for most people. There is a general consensus (which has been arrived at after trying various models tha