Banks exploit legal loophole to seize homes

[Monty2007]

Banks and credit card companies are exploiting obscure legal powers to seize the homes of thousands of people who cannot pay their credit card bills.

In some cases, people owing as little as £1,000 have been served with charging orders – the legal instrument enabling a creditor to order the sale of a property.

The practice has emerged days after Yvette Cooper, chief secretary to the Treasury, called on banks to do more to allow people to keep their homes.

According to the Ministry of Justice, 97,026 charging orders were granted by courts in England and Wales last year, a tenfold increase since 2000.

 

see:

 

Banks exploit legal loophole to seize homes - Times Online

[Belaflat]

After reading that article, I wonder what the implications are for those of us with long standing debts and disputes. Will the DCAs now just head straight for charging orders bypassing the courts route.

[creditcardmug]

This is the bit from the article that i wasnt aware of....very worrying...anyone know more on this?

 

From next year banks will be given further arbitrary powers because they will no longer need to secure a county court judgment against a defaulting debtor. They will be able to move directly to seek a charging order after two or three months of missed payments.

[Monty2007]

That's correct. So whereas the Government (i.e. Yvette Cooper, MP) are stating publically that they are trying to make it MORE difficult for banks to foreclose on debt/hardship the legislation that they are introducing is doing the very opposite.

 

How can it be reasonable for an unsecured debt, and the higher charges that go with such, to be made by default into a secured debt which can then be subject of a SD?

 

The first thing banks creditors now look at is property ownership and this is a obviously in their favour. I am surprised it has not had more publicity and objection.

[creditcardmug]

Just found and read Pathway's thread on this, the impact this could have on hardpressed families, especially in the ever worsening economic climate hardly bears thing about.

[babybear39]

The legislation is still under consutlation:

 

Tribunals, Courts and Enforcement Act 2007 (c. 15)

[UnmoderatetheNet]

I say let them do it!

 

Yes that’s right let’s see repossessions go through the roof (scuse the pun), let’s see thousands of homes being dumped on an already weak market.

 

Ultimately who would suffer? That’s right Mr. Bank, that’s who.

 

They have clearly not thought this thing through.

[itsamomentintime]

considering that so many creditors cannot produce a correctly executed CCA and therefore cannot prove that a debt exists, how can they force a charging order on anyone in the know?

 

knowledge is power

[Monty2007]

considering that so many creditors cannot produce a correctly executed CCA and therefore cannot prove that a debt exists, how can they force a charging order on anyone in the know?

 

knowledge is power

 

capitalise on those that are not in the know............

[cashins]

Although it's good that the press are finally taking an interest in what banks and DCA's get up to, the article is not the most accurate I have ever seen.

 

A charging order, is exactly what it says on the tin - registering a charge on a property and if they can't prove the debt in court, they won't get one.

 

David

[MrShed]

Correct. Nor does it force the sale of a property(or seize it).

 

Sensationalised in my opinion. It may or may not be a concern, but a lot of what has been stated on this thread is factually inaccurate.

[Monty2007]

Correct. Nor does it force the sale of a property(or seize it).

 

Sensationalised in my opinion. It may or may not be a concern, but a lot of what has been stated on this thread is factually inaccurate.[/quote]

 

Like what? The article is on the Times website and covered elsewhere!

[Hopster]

I have also read the same article.

Same paper but in Business news page 8 are two adverts offering to clear credit card debts, 1. Clear your Credit Cards and Personal Loans - Credit Issues and 2. 0800 822 2445. I have already paid one company like this to rid me of two credit card debts and both companies, Egg and Halifax have gone very quiet. I am wondering if I am about to be hit with a charging order on the house that we own.

Does anyone actually really know anyone who can definitely tell us whether cca's are enforcable or not ??

[MrShed]

Like the fact that it is being strongly implied that all charging orders result in seizure. Absolutely categorically not. It is a minute proportion.

[creditcardmug]

Correct. Nor does it force the sale of a property(or seize it).

 

Sensationalised in my opinion. It may or may not be a concern, but a lot of what has been stated on this thread is factually inaccurate.

 

It doesn't force the sale in itself...but an order for sale is only the next step once they have it

[mak71]

It was only this week i read that Gordon Brown was pushing for new legislation against mortgage companies, the artical said to be implemented mid november, basically was saying mortgage lenders would have to explore every avenue before repossesion, and only use repossesion as a last option,

So surely unsecured debt should come under even tougher rules?

where do accounts in dispute ,ie cca unenforcable come into this,

can a credit card company who cant supply your cca get your house repossessed ,surely they would have to prove the debt was enforcable in the first place,ie legal in law?

 

If it was that easy for banks.credit card companies to get these charging orders as the times is suggesting then surely the banks would be chasing more of these up instead of selling the debt on the dca"s for a fraction of the full outsatanding debt.

 

its confusing the hell out of me,

[Hopster]

In the Sunday Times it states that according to the Ministry of Justice 97,206 Charging Orders granted by the courts last year. You should read the article. Google it up under 'news' if you haven't seen it.

[creditcardmug]

It was only this week i read that Gordon Brown was pushing for new legislation against mortgage companies, the artical said to be implemented mid november, basically was saying mortgage lenders would have to explore every avenue before repossesion, and only use repossesion as a last option,

So surely unsecured debt should come under even tougher rules?

where do accounts in dispute ,ie cca unenforcable come into this,

can a credit card company who cant supply your cca get your house repossessed ,surely they would have to prove the debt was enforcable in the first place,ie legal in law?

 

If it was that easy for banks.credit card companies to get these charging orders as the times is suggesting then surely the banks would be chasing more of these up instead of selling the debt on the dca"s for a fraction of the full outsatanding debt.

 

its confusing the hell out of me,

 

No, they still wont be able to get a ccj,and charging order if you successfully defend against them.

But what is proposed is that if they get the ccj they get the charging order at the same time... what everyone is concerned about are the people who arent clued up regarding their rights, and dont defend, they automatically get a charging order.

 

also even if you defend and lose, you get the charging order even if you dont miss any payments.

[Monty2007]

Like the fact that it is being strongly implied that all charging orders result in seizure. Absolutely categorically not. It is a minute proportion.

 

No, Mr Shed, this was not implied. The fact is that there is now the potential for a significant increase in charging orders for previously unsecured debt which is a scandal. Unsecured debt is charged at much higher interest rates for that very reason, hence they have it both ways and the DCA's will go for this route given it will give them a fast result.

 

I agree with the point that they will still have to prove the debt and present the supporting documentation to obtain a CO. But this is secondary to the issue IMO.

[mak71]

No, they still wont be able to get a ccj,and charging order if you successfully defend against them.

But what is proposed is that if they get the ccj they get the charging order at the same time... what everyone is concerned about are the people who arent clued up regarding their rights, and dont defend, they automatically get a charging order.

 

also even if you defend and lose, you get the charging order even if you dont miss any payments.

 

Thanks for info,

so if they did get a charging order . would they almost certainly force a sale through as soon as they could,

who gets priority, lets say theres 5 creditors , is it who ever gets in there first and gets the order attached that is sure of getting their money you owe them first,if thats the case, surely thats worrying as it put more importance on all your creditors to get you in the courts first before any of the others do to secure their money,?

[MrShed]

Lets get some clarity here.

 

It is not a "secured debt" usually in the traditional sense of the word, where if people do not keep up repayments they may lose their home. The chances of you losing your home are VERY slim unless it is a very sizeable debt.

 

It is true that an order of sale is just the next step, but this is in the same way that climbing Everest is just the next step from walking up my local hill. The difference in the difficulty of acquiring is exponentially more, and will only be done in extreme circumstances.

 

All that is happening is that a creditor is making a request that at a future unspecified date, but a date when they KNOW you have money, they will request that a portion of that is allocated to them. It prevents them from never being able to recoup the loss.

 

I think what people need to remember is that although yes there are a lot of unfair debts, and unfair banks, there are also a lot that should be repaid fair and square. If the only way this repayment can and will happen is to get some at the time of house sale, then so be it.

 

It is perfectly MORAL to do this - why should people who owe other people(be it a bank, or some other institution, or some other INDIVIDUAL - remember that these can also be used to enforce personal claims) be allowed to sell their property and have that amount of capital asset, but the other person is the loser?

[creditcardmug]

Thanks for info,

so if they did get a charging order . would they almost certainly force a sale through as soon as they could,

who gets priority, lets say theres 5 creditors , is it who ever gets in there first and gets the order attached that is sure of getting their money you owe them first,if thats the case, surely thats worrying as it put more importance on all your creditors to get you in the courts first before any of the others do to secure their money,?

 

As things are at the moment, assuming they already had a ccj, then as long as you keep up the payments they cant apply for any enforcement order (including charging order), but under this new scenario they get the charging order at the same time as the ccj!

 

As for priority, i dont know for sure, but would imagine yes 1st 1st served for any equity left over after the secured creditors:(

[creditcardmug]

Mr shed, yes i can see and completely accept the point your making, however im lead to believe that the creditor is to get a charging order automatically at the point the ccj is entered.

 

I dont think this is fair, the debtor hasnt been given a chance to pay back the money, before suffering further penalty

[MrShed]

First of all - thanks for at least seeing my point of view CCM - I fully expected to be slated(like I usually am when I make this argument)

 

My point/understanding is that the CO itself is meaningless. It means nothing without a OOS, and if paid off incurs no further penalty whatsoever.

[MrShed]

What I would also say is that I have just read the article and it is at best misleading and one-sided, and at worst incorrect.