Putting the brakes on charging orders

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New York orphans off on a trip to Coney Island; from the New York Public Library collection on Flickr.

Further to my comments recently about the folly of paying mortgage instalments via credit cards, I was interested to see this announcement of an MoJ consultation on whether there should be a minimum level of consumer credit debt before charging orders can be made or enforced. A brief look at the consultation paper reveals a concern that there is potentially a disaster waiting to happen here. There is lots of unsecured credit or credit secured against the (now diminishing) equity in property, and although statistically the number of charging orders obtained has actually fallen over the past couple of years, the threat that these orders could be used to enforce defaults in the future is still out there and the government is clearly apprehensive. Personal insolvency is increasing – record numbers were recorded last year – and lenders will be looking more and more to get hold of security to increase their chances of repayment. Do follow the link and contribute to the consultation if you have clients who have already been affected by this problem.