An article from Times online points out that desperate banks and credit card companies are increasingly taking people’s unsecured loans and getting them secured against the borrower’s house instead.
The lenders are using charging orders to do this, sometimes with borrowers that have only missed a single payment on their loans. The Courts report that there were more than 92,000 applications for “charging orders” in 2006 – more than seven times the figure in 2000.
Twitchy lenders use the procedure to get more security against defaulters – even in an atmosphere where, ClearDebt believes, as many private individuals have been oversold to as have over-borrowed.
“This is yet another reason why people with debt problems should get advice early, rather than wait for banks to take this sort of action against them – after all, consumers get charged more interest on unsecured loans because they are more risky – why should lenders be able to continue to charge more whilst risking less, because they now have a claim on your house?” says ClearDebt SEO, David Mond.