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£1,000 Debt Could Result In Reposession

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£1,000 debt could force you to sell your home

New rules let lenders use property equity to get cash

Whether they know it or not, more than 700,000 households in England and Wales are at risk of losing their homes over debts as small as £1,000. New rules come into effect today governing the way that creditors can force the sale of property in order to repay outstanding sums on payday loans, credit cards and other forms of consumer debt.

The new regulations – the Charging Orders (Order for Sale: Financial Thresholds) Regulations 2013 – could prove controversial for two reasons.

First, they represent an about-turn by the Government, which had indicated in the Coalition Agreement in 2010 that a threshold of £25,000 would be set rather than the £1,000 limit that takes effect today.

Second, the numbers of people with charging orders on their property who could then go on to lose their homes could surge as house prices rise. Once a charging order exists on a property, the owners are only a step away from losing their home as their creditors can ask a court to force a sale in order to satisfy the debt. Just over 400 sales orders were made in 2011, the last year for which there are statistics.

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£1,000 debt could force you to sell your home

New rules let lenders use property equity to get cash

What's new about that?

Check out this story from HPC (tenant armed with a bunch of court rulings gets to the point of repossessing landlord's house in deposit dispute, before landlord finally pays up).

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Well what do you suggest let people not pat their debt if they do not want to?

pretty much, especially if they're savvy home owners and not loose forever renters

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I would say this would be fair enough if the powers that be, corporations and bankers weren't debt hungry obsessed lending sharks.

I think there needs to be a balance that says if you get in debt you must pay your obligations, but at the same time stop making everything related to tricking as many people into debt as possible.

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second charges are nothing new.

Unsecured debt can become secured.

dont really know whats changed...

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I would say this would be fair enough if the powers that be, corporations and bankers weren't debt hungry obsessed lending sharks.

I think there needs to be a balance that says if you get in debt you must pay your obligations, but at the same time stop making everything related to tricking as many people into debt as possible.

Should an original £1000 unsecured debt - which is subsequently placed as a charge against your property for non-payment - then become the reason for you to lose your home!!

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Should an original £1000 unsecured debt - which is subsequently placed as a charge against your property for non-payment - then become the reason for you to lose your home!!

if you don't pay the f*cking thing then yeah why not - what about the poor creditor, does he/she not count?

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Should an original £1000 unsecured debt - which is subsequently placed as a charge against your property for non-payment - then become the reason for you to lose your home!!

Yes! If you are refusing to pay a debt that you agreed to take on and have money tied up in your house you should be forced to sell the house to pay the debt.

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Should an original £1000 unsecured debt - which is subsequently placed as a charge against your property for non-payment - then become the reason for you to lose your home!!

should an unsecured bond issued by a Government result in austerity for the people who didnt issue the bond, but suddenly it becomes secured on their incomes and their state's assets, like sunny islands and gas reserves?

I see a new trend.

Houses of course, are sitting targets....as I may have mentioned before..

Edited by Bloo Loo

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Yes! If you are refusing to pay a debt that you agreed to take on and have money tied up in your house you should be forced to sell the house to pay the debt.

NO, if they wanted it to be secured then that should have been the load they offered (with a lower rate because its secured). In my eyes its not right that they could charge and APR for an unsecured loan but want the security of a secured one.

On this basis it must mean that there is no such thing as an unsecured loan (if you own a house)?

has anyone got a link?

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Yes! If you are refusing to pay a debt that you agreed to take on and have money tied up in your house you should be forced to sell the house to pay the debt.

What if the person through unfortunate personal or tragic circumstances - ie became very ill and couldn't work etc and had every intention to honour the unsecured debt when originally taken out, but the creditor (through impatience) manages to get a charge placed on the family home - should he/she now be forced to sell?

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NO, if they wanted it to be secured then that should have been the load they offered (with a lower rate because its secured). In my eyes its not right that they could charge and APR for an unsecured loan but want the security of a secured one.

On this basis it must mean that there is no such thing as an unsecured loan (if you own a house)?

has anyone got a link?

If you break the terms of your unsecured debt, and fall into arrears, the aggreived creditor can apply to the court to get the debt secured on assets...the logic is that a man can spend all he borrows and place it into assets...a court cant order assets to be transferred unless the aggreived agrees, therefore the recourse at court is the award of FIAT.

To get Fiat from a man who has physical assets, but refuses to sell, as is his right as the debt was unsecured, the court adds an attachment to the physical so that when it IS sold, part of the proceeds will go to the aggreived.

This is basically how a Bankruptcy is resolved, or a Death Estate is resolved.

Of course, being behind on a first charge, usuall a mortgage, means you get it all paid for you....which in itself is a problem for second charge holders in that the first charge holder sees no real problem and will refuse a sale.

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Of course, being behind on a first charge, usuall a mortgage, means you get it all paid for you....which in itself is a problem for second charge holders in that the first charge holder sees no real problem and will refuse a sale.

I don't think that is correct. First Charge just means that they are paid out before other charges sitting behind it.

Therefore if you fail to make payments on a second charge - they can force the sale - they just get paid out from the balance after the first charge is settled. Many people don't realise that second charges are far more inflexible in their attitude to people missing payments - and for obvious reasons - they are second in line to getting paid out.

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NO, if they wanted it to be secured then that should have been the load they offered (with a lower rate because its secured). In my eyes its not right that they could charge and APR for an unsecured loan but want the security of a secured one.

Bzzt. Might be a lower rate, but that would be swamped by the higher cost of securing it. £1k loan over 1 year, 10% unsecured (£100), or 3% secured + £450 cost to secure it (£480)?

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What if the person through unfortunate personal or tragic circumstances - ie became very ill and couldn't work etc and had every intention to honour the unsecured debt when originally taken out, but the creditor (through impatience) manages to get a charge placed on the family home - should he/she now be forced to sell?

That's what insurance is for.

Or was, before SMI offered free help to people in precisely that circumstance.

Though for many it's even better than that: your employer pays your full salary but you pay less tax on it, so you're actually better-off (happened to a family member who had a heart attack).

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So what is this all about?......can stay in the place whilst still negative equity servicing the debt....but once so called value has increased above all debt and costs, the creditors will claim it back....doesn't surprise. ;)

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if you don't pay the f*cking thing then yeah why not - what about the poor creditor, does he/she not count?

Won't someone think of the children?

You wouldn't understand, you're not a home owning parent, you know, "hard working family". Until you've taken on that sort of level of responsibilty i don't think you're in a position to opine.

:D

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That's what insurance is for.

Or was, before SMI offered free help to people in precisely that circumstance.

Though for many it's even better than that: your employer pays your full salary but you pay less tax on it, so you're actually better-off (happened to a family member who had a heart attack).

Assumes you are employed (rather than self-employed).

Assumes you had insurance.

Assumes insurance actually agrees to pay - ( they are notoriously slippery when it comes to paying out)

The point being, if it was originally £1k or unsecured debt, that subsequently gets it placed as a 2nd charge on the property (by the creditor), who then triggers action to force a sale - i don't think this is acceptable.

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Assumes you are employed (rather than self-employed).

Assumes you had insurance.

Assumes insurance actually agrees to pay - ( they are notoriously slippery when it comes to paying out)

The point being, if it was originally £1k or unsecured debt, that subsequently gets it placed as a 2nd charge on the property (by the creditor), who then triggers action to force a sale - i don't think this is acceptable.

Ok would this be better. I hire a builder to build an extension on my house. He finishes the work to a good standard but unfortunately my wife loses her job. I tell the builder unfor tunately I wont be able to pay.

What should happen?#

a ) I stay in my house and just don't pay and builder goes bust and loses business + house.

b ) I have to sell my house to pay builder and keep whatever remaining equity I have.

Edited by doomed

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I don't think that is correct. First Charge just means that they are paid out before other charges sitting behind it.

Therefore if you fail to make payments on a second charge - they can force the sale - they just get paid out from the balance after the first charge is settled. Many people don't realise that second charges are far more inflexible in their attitude to people missing payments - and for obvious reasons - they are second in line to getting paid out.

Whilst not set in stone, my post is practically correct...here from the CAB:...maybe this is what is changing from today, but I doubt that the argument about others suffering on a forced sale would be ignored:

You may be able to use one of the following arguments to persuade the judge that a charging order should not be made.

There is very little or no equity in your property

Equity is the amount of profit you would make on your property when you have sold it and the mortgage has been paid off. If there is little or no equity in the property, your creditor wouldn’t get their money back if it was sold. This might apply where a mortgage or other secured loans have to be paid back first or where the value of your property is low.

Other creditors aren't asking for a charging order

If you have more than one creditor, the others may have agreed to let you pay back their debts by instalments, rather than asking for a charging order. You may be able to argue that you shouldn't have to grant one creditor a charging order if none of the others think it's necessary – especially if the others are owed more money.

Other creditors have priority

You may have other creditors who would need to be paid back first out of the proceeds of the sale of your home. This might leave little or no money to pay back the creditor who is asking for a charging order, so there would be no point in them getting one.

A charging order is unfair on other people who live with you

You may be able to argue that other people who live with you, such as children, an older person or someone with a disability, would be severely affected if your home had to be sold.

There are other ways to pay back the debt

It may be possible to argue that there are other ways to pay back the debt than through a charging order. Some of these may be better for you, depending on your circumstances.

Other ways of paying back the debt include:

  • an instalment order, where you pay back what you owe in instalments
  • an attachment of earnings order, where the money you owe is taken out of your wages. This would only be useful if you are employed and your job isn't at risk
  • an administration order. You could ask for this if you owe credit debts of less than £5,000 to more than one creditor. An administration order allows you to make one regular payment to the court. The amount of the payments depends on what you can afford to pay. The court then divides the money up and pays your creditors what it thinks is the fairest amount. As long as you keep making the payments, your creditors can't take any further action against you, although they can ask for the decision to be reviewed
  • a time order. This is an order that extends the length of time you have to repay the debt. You can also change the amount you pay each month. Time orders are particularly useful if you want to stop or reduce the amount of interest you are paying on top of your debt. Time orders are only granted on credit debts such as a credit card or other loan.

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  • 243 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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