The Ministry of Justice has begun a consultation on whether property owners who have failed to repay consumer credit debts should have a minimum level of debt before a court can order the sale of their home.
Under the current system, a court can place a ‘charging order’ on a property if the owner has failed to pay unsecured debts, for example on credit or store cards. In some cases an ‘order for sale’ may follow if a judge decides a homeowner can only settle the unsecured debt by selling the property. There is no minimum level of consumer credit debt required before an order for sale can be issued.
Announcing the consultation, Justice Minister Bridget Prentice said:
“We know that only a small proportion of charging orders result in the property being sold, so it’s rare for a debtor to lose their home because of things such as unpaid credit cards. There are currently a number of safeguards in place to protect homeowners, while ensuring the creditors who need to recoup their money are able to do so.
“But it’s important that the government consider whether there is a risk that the numbers will increase due to the current economic situation, and whether this could result in more people losing their homes because of relatively low levels of debt which they are unable to pay. We’re asking for views on whether a minimum threshold should be introduced in law, to prevent this from occurring.”
** Additional Information & Advice About UK Insolvency Law **
Depending on your circumstances, however, you may want to speak with a speak with a solicitor. You can find a solicitor in your area for free via solicitor matching services, which can also help you to understand the best course of action for your situation and whether you are ready to hire a solicitor.
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