Property owners in danger of losing their homes as a result of consumer debt could soon be better protected.
The Ministry of Justice has launched a consultation on proposed new measures that would set a minimum level of such debt before a court can order the sale of a home.
Under the current system, a property owner who cannot pay a credit or store card debt can have a charging order placed against their property to secure the debt.
In a small number of cases the charging order is followed by an order for sale, when a court decides that the property must be sold immediately to settle the debt, even though it was not secured against the property when initially taken out.
Justice Minister Bridget Prentice says: ‘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.”
She adds: “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.”
The consultation period closes on 30th April 2010.
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