Home protection for credit card debtors considered
05 February 2010 17:13:07
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| Government explores order for sale laws for credit card debtors. |
The Ministry of Justice (MoJ) has released a consultation paper to explore whether lenders should be permitted to force the sale of a home in order to call in debts below a minimum level.
Although orders for sale in relation to credit card debts are only issued in a minority of cases, the MoJ is looking to protect against a substantial rise as a result of the current economic climate.
"It's rare for a debtor to lose their home because of things such as unpaid credit cards," said justice minister Bridget Prentice.
"But it's important that the government considers whether there is a risk that the [economic situation] could result in more people losing their homes because of relatively low levels of debt which they are unable to pay."
Although Ms Prentice did not outline a specific threshold for debts owed, the Office of Fair Trading indicated that the level could be set between £5,000 and £10,000.
Meanwhile, the National Audit Office revealed this week that demand for the government's free debt counselling agencies increased by 28% in the year to July 2009.
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