Charging order laws criticised by charity

26/06/2009

Laws governing charging orders in the UK should be made clearer, Citizens Advice has said.

The charity pointed to figures showing that the numbers of cases have increased by 722 per cent since 2000, with courts issuing the orders in roughly three in every four applications.

Charging orders are made when someone owes money in unsecured credit, such as through a credit card or personal loan.

When the order is gained, the lender gets the right to secure this debt onto the borrower's home, meaning that the property can be repossessed if they fail to keep up with repayments.

Citizens Advice recommended changes to the current law, including the setting up of a minimum amount that the debtor must owe before they can be taken to court.

David Harker, chief executive of Citizens Advice, said: "The law as it stands leaves debtors far too exposed to unfair treatment and the risk of losing their homes from unsecured creditors.

"Some creditors are using the court process as a tactic to intimidate vulnerable debtors into paying unaffordable amounts. This is not only unfair to the individuals concerned who have offered payments towards their debts but is also unfair to other creditors."

Tags; Debt Management and Banking, Credit Card Lifestyle,

• Share
• 
• 
• Store
• 
• Follow
•