New rules for bailiffs

20/03/2009

The government has announced a new code of conduct for bailiffs and confirmed that it will not be introducing charging order reforms.

Justice minister Bridget Prentice explained that the reforms will include tighter controls over what bailiffs can and can't do.

The bailiff reforms will focus on the Tribunals Courts and Enforcement (TCE) Act and will seek to clarify a number of ambiguous points including when and how a bailiff can enter a property and what goods can be seized.

Ms Prentice said these initial plans will pave the way for a "long-term reform of the enforcement industry".

"This will help debtors, creditors, bailiffs and the police understand what their rights and responsibilities are when debts are enforced," she added.

Reforming Charging Orders would have granted creditors the ability to turn unsecured debt into a secured debt, increasing the risk of repossession for those borrowers facing serious financial difficulties.

Commenting on this decision, Ms Prentice noted: "However, following the reassessment the government will not now be commencing provisions on Charging Orders or taking any action that would extend bailiffs' powers of entry."

Figures released by Which? today reveal that 43 per cent of couples fear the threat of repossession, with 73 per cent suggesting that the government should do more to prevent lenders taking such action.

Kevin Still, director of EuroDebt, said: "We welcome the withdrawal of the charging order reforms, which would have allowed debt buyers and unsecured lenders to apply for charging orders on judgment debts that were being paid on an instalment plan, even if the plan was being met.

"In some instance this would have lead to additional interest being applied to the debt, if this was permitted in the original credit agreement. There has been growing concern in the debt advice sector of the wider use of charging orders by companies buying delinquent debts and lenders to effectively convert an unsecured debt into a secured debt, often for balances below £1,000.

"Even if a creditor has no intent to apply for an 'order for sale', consumers become very distressed when this type of legal collection activity is applied. Over a quarter of EuroDebt's clients come to us with some form of legal action pending or already enforced. This is one of our earliest priorities."

Tags; Housing Debt and Bills,

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