Greedy banks are using obscure legal powers to seize the homes of thousands of people who cannot pay their credit card bills — and worst of the lot is Northern Rock, bailed out with taxpayers’ money last year after near destruction at the hands of its ultra-greedy bosses. The Nationwide is the second worst offender.

Credit card companies are also in on the legalised theft, which involves serving the victims with little known court claims known as ‘charging orders’. In some cases, people owing as little as £1,000 have been hit with one of these legal instruments, which enable a creditor to order the sale of a property.

So much for the call by Yvette Cooper, chief secretary to the Treasury, for banks 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.

They allow financial institutions to order the sale of a property to pay off unsecured debts on credit cards, personal loans, store cards and car finance. Some will have been used only to threaten the debtor, or to levy a surcharge on the mortgage to recoup the debts.

While all householders know that their home is at risk if they fail to pay a secured loan such as a mortgage, no-one has ever been told when taking out an unsecured loan or using a credit card that their home is at risk if they fail to keep up with repayments.

The rate at which the courts have granted charging orders has increased sharply in the past two months, according to the National Debt-line. Alex McDermott, social policy officer at Citizens Advice, says the Government is ignoring a hidden scandal, because homes repossessed in this way did not appear in the official statistics issued by the Council for Mortgage Lenders.

And, far from stepping in to deal with the banksters and credit card loan sharks, the Government plans on making it even easier for them to seize peoples’ homes. From next year banks 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 just two or three months of missed payments.

So when the banksters bring their institutions and the whole economy to the point of collapse, the political elite all band together to tell us that we have ‘no choice’ but to hand over £Billions in bail-outs. But when an ordinary decent family who are hit by the banksters’ credit crunch can’t pay a couple of bills, the Labour government and Tory opposition sit on their hands while they lose their home.

If ever a system needed sweeping into the litter bin of history, it’s this one!

Two points:

(i) A charging order does not force the property owner to sell the property - it just means the charge has to be settled when the property is sold.
(ii)What is wrong with a bank trying to recover debt? There is a procedure to go through which is operated by the courts - fairly one must assume - and as it is your money the banks are operating in your best interests.

You complain about the taxpayer bailing the banks out (because they don't have enough money to cover their own debts) yet when they try to fix their problems themselves through the courts without recourse to the taxpayer you complain. Clearly you want to have your cake and eat it.

Please be careful when criticising the banks - if you don't know what you are talking about then don't say anything! As we are finding out when they stop lending. How chilly it gets!

MotCo

MOTCO wrote:Two points:

(i) A charging order does not force the property owner to sell the property - it just means the charge has to be settled when the property is sold.
(ii)What is wrong with a bank trying to recover debt? There is a procedure to go through which is operated by the courts - fairly one must assume - and as it is your money the banks are operating in your best interests.

You complain about the taxpayer bailing the banks out (because they don't have enough money to cover their own debts) yet when they try to fix their problems themselves through the courts without recourse to the taxpayer you complain. Clearly you want to have your cake and eat it.

Please be careful when criticising the banks - if you don't know what you are talking about then don't say anything! As we are finding out when they stop lending (which they will if idiots like you stop them recovering debt) how chilly it gets!

MotCo

Try reading it properly. It says a Sale Order can be applied for too.
Surely, if an institution sells you an "unsecured" loan, it should be just that. If they can use another law to force you to sell your property, then the loan is not unsecured, and has been sold to you on the basis of a misdescription.

The fact that the term "re-possession" is not applied to the methodology is academic if the net result is a forced sale of your home, which could be in the current climate, at an unreasonably low sale price.

This must be stamped on immediately, either through a redefining of the loan, so that the loanee is aware that a forced sale is possible, or the home should be ring-fenced from this obscure charging law on debt.

Unfortunately, it appears that due to their losses gambling in the USA and elsewhere, the Banks are now unwilling to write debt off so easily, so are pursuing an aggressive policy for relatively minor monies.
The thing is, I would like to see a victim appeal this under the pretext Irritated suggested, that my credit-card/loan agreements "NEVER ONCE REFLECTED ANY POSSIBILITY THAT MY HOME WOULD BE AT RISK ETC.." and get an once-and-for-all precedential ruling from a Court that in such cases actions like sale-orders are thus unlawful, punitive and unfair.
This would nip this nasty little practice in the bud.

As for 'Idiots like me' I don't owe a penny of unsecured debt, and have not insinuated I want to see people get away with paying up. I believe there are perfectly good laws already to deal with unsecured debts, and secondly am simply stating that a rip-off is occuring here as this possibility has never been mentioned in the agreements.

Surely an astute businessman such as yourself can see the wisdom of fair and clearly-worded loan agreements, because you'd squeal like a stuck pig if in these difficult times your bank or lender suddenly siezed your business under some obscure piece of legislation for a relatively minor problem.

Try changing your source!

http://www.hmcourts-service.gov.uk/infoabout/enforcement/charging/how.htm

MotCo

Not so sure I would call myself astute but thanks for the compliment!

I think that the main point here is that when a loan is obtained that is not secured on "assets", namely a "personal" loan, surely the bank - via the courts - should not be able to claim such assets in payment for debts ?

If all loans are given putting a person's home at risk then this should be made clear UP FRONT !

If what Chalkie suggests is true then this is a WHOLE new area of debt-recovery that was not there before.

I might suggest that the debt-recovery agencies have quite enough weapons in their arsenal that they can use without going down THIS road.

An interesting post Chalkie !

That sounds scary. I hope it is not true !

Angie baby wrote:That sounds scary. I hope it is not true !

It IS true and it's happening now.
Until someone (like punitive bank charges) challenges it in court in a test case.

Maybe the Consumer Action Group will get in on this one too.

http://www.consumeractiongroup.co.uk/

This could be a good one to put into their forums Chalkie.

MOTCO wrote:Try changing your source!

http://www.hmcourts-service.gov.uk/infoabout/enforcement/charging/how.htm

MotCo

Not so sure I would call myself astute but thanks for the compliment!

Yeah, and?
That says exactly what one part of my initial post says, you conveniently ignore the 'selling order' part which is disingenuous of you as you ain't that daft that you can't see that that is where my point of concern lies.
Repossession and selling orders have the same outcome - the property is disposed of normally at auction, thus a low price, often the agents who do this are (illegally) in league with friends who are tipped off so they can get cheap houses.
The costs of these sales are far higher than selling normally in the market, and even though after the plaintiff has been paid off and the mortgage settled the surplus is returned to the mortgagee/homeowner (if applicable) this is thousands down on what the mortgagee/homeowner would have realised in a normal sale.
Double whammy.

That's our Motco for you: selectively myopic when it suits his argument !

Sometimes I wonder why I bother at all with Motco as he is so dogmatic and blinkered at times that he is almost impossibe to get through to !

I guess the best way to find out about such stuff is to suffer when it applies to YOU and it is you that is feeling the pain of such unfairness !

Yes, but the creditor can also get the court, if appropriate, to give a 'sale order' or realization order' which is the part that concerns me.
Another thing worth remembering, these 'unsecured' loans and cards have a high interest rate to reflect their status, and this covers the banks' profits for the inevitable small percentage who default, thus not necessitating the drastic actions described here.
The problem is, the rate of default has rocketed, thus the lenders are scraping up any oppotunity to secure funds.

PANORAMA on BBC1 Monday 10 November next week is going to have a special on this subject, as it seems to be growing daily. Worth keeping a look out for.

Thanks Chalkie, I for one will be watching it !

papa_umau wrote:Thanks Chalkie, I for one will be watching it !

Did you see it ppm?
Disturbing stuff.
And so was the blackie and his missus who were in 120k of unsecured debt and managed to get over 100k of it written off by using loopholes in the 1973 Consumer Credit Act, such as interest being stipulated in the wrong section of the agreement etc.

No dammit, I missed it as I was up to my eyeballs with this car incident yesterday.

I will try to watch it on the BBC Panorama website !

---

Been there, done that !

Although the programme was not shown in full on video, the video that they did show DID support the original premise in your threadstart.

I read the whole text report and it seems that while much of these debts CAN be written off by looking for loopholes, in fact the court case that might use these loopholes could finish up costing more than the original debt.

There is little recourse to the law for the ordinary five-eights in this country and the only way that such a route can be taken is if it is via what they call a "Class action" in America or a "Group action" in Britain.

That is how the Bank Action Group, now known as The Consumer Action Group, have been so successful in other ways.