Credit card debts could result in the loss of your property

Industry officials have recently warned that consumers with outstanding credit cards debts of as little as £1000 could risk losing their homes in the event that they do not make repayments on their debt. With a rising number of people defaulting on their credit card debts this could mean a further rise in the number of people that lose their homes.

The reason why this action can be taken over such a small debt is known as a charging order, which enables lenders to get courts to force the sale of a borrower’s property in order to retrieve the money that they borrower owes on the credit card. This could be really bad news for homeowners given the low value of property at the moment.

Industry officials have also said that at present some changes are being discussed in relation to the Tribunals, Courts and Enforcement Act 2007, and the changes could end up benefiting the lender rather than the consumer, although the Ministry of Justice has recently acted to try and provide consumers with more protection.

‘Although the changes to the Act were put on hold to benefit debtors, there is a chance some debtors may have to sell their homes to repay smaller amounts of debts.’