A consultation has been launched by the Ministry of Justice with a view to increasing the minimum amounts owed before the sale of a home can be ordered by the courts to force repayment of the debt by the homeowner.

The system that is currently in place means that a charging order can be placed against the property of a homeowner in the event that they are defaulting on repayments on their credit or store cards, and ultimately this can force them to sell the home and repay the money that they owe. The courts can make a decision to force the sale of the property and make the consumer repay the debt even though the debt was not originally secured against the home.

The Ministry of Justice has stated that sales of properties are only forced in a small proportion of cases, and it was therefore rare for people that could not pay their store or credit cards to be forced to sell the home over it. However, it does happen in a small number of cases and the new measures would help to provide greater protection for those that could find themselves in this situation.

An MoJ official said: “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.”

Increased protection could be put into place for homeowners in debt is a post from: Glitec Loans

These short term loans do not generally require a credit check, and many people that need some cash to tide them over until they get paid use pay day lenders to get the cash that they need. Doorstep lenders have also become increasingly popular in the current climate, where many people cannot get the loan that they need through a traditional lender.

However, there are concerns over the interest rates that are being charged by some doorstep lenders, which can lead to low income families – often the ones that rely on these lenders – really struggling to repay the money that they owe. It has now been revealed that these lenders could face having the rates of interest that they charge curbed following proposals that are set to be discussed in the near future at Downing Street.

The Better Banking Coalition has put the package of changes forward, and the group is focussed on getting ‘fair access to credit for all’. The group comprises social enterprises, voluntary groups, and community organisations. Both doorstep and pay day lenders who focus on short term loans for those that would struggle to get money from a mainstream lender will be on the agenda with regards to curbing the rates of interest that they charge.

A spokesperson for the coalition stated: ‘In the worst case, these rates can run at 9,000% a year, and 1,000% is not unusual.’ She added: ‘Financial institutions are not lending enough to enough people and that is having a huge impact. The Government has been working on the issue of financial exclusion for many years, but we do not feel that existing measures are strong enough.’

Interest rates to be curbed on pay day loans is a post from: Glitec Loans

Many people will have spent up on their higher interest credit cards over the festive season, and will now be lumbered with debt on which they are paying significant sums of interest. However, taking the right steps could help them to save money on interest.

With the New Year now well underway many people will have made resolutions involving clearing their debts as quickly as possible, and officials from lovemoney.com have said that using a balance transfer card onto which they can transfer high interest credit card debt could go some way towards helping them to achieve their goals, as it means that they can enjoy a generous period of interest free credit without being charged any interest on the balance that they have transferred.

A spokesperson for the group said that many people may feel daunted at the prospect of having to shuffle around financial commitments, but he said that using a balance transfer card to shift more expensive debt onto could release the strain for those that are struggling financially, and the process was a pretty simple and straightforward one with an increase in the choice of balance transfer cards that were available.

He said: “If you have got a credit card at 17 or 20 per cent, try if possible to get your consumer debt onto the lowest interest rate as possible. Whether that is a nought per cent credit card or the best personal loans at about eight per cent, try to pay it down as fast as you can. The rates you will be paying will rise over the next couple of years so to get that debt as small as possible as quickly as possible is the best way to go.”

Size of debt could be decreased with a balance transfer credit card is a post from: Glitec Loans

The increase in the loan rates since the start of this year means that borrowers will end up paying more each month for their loan or will have to take it out over a longer period to keep repayments down.

Industry experts have said that whilst the base rate has fallen dramatically over the past twelve months, and has been at an all time low for the last nine months, this has yet to feed through to the personal loans market.

They have also said that there is a lack of supply with personal loans, as banks as being far more choosy over who they will give loans out to. Recent research suggested that around d eight out of nine banks were now only offering personal loans to existing customers, such as those that have current accounts, rather than to opening their loan products up to those that are not already customers.

The British Banker’s Association said: “The UK economy has changed considerably since the credit crunch began and it is still changing. Lenders price their loans according to the economic factors of the time, and although there is still aggressive competition for customers, there are also harsh economic realities they have to deal with. They still have to fund their loans using a mix of wholesale money and customers’ deposits, and neither of these options is open to them at anything like the Bank of England’s base rate.”

Cost Of Personal Loans Increased By Banks is a post from: Glitec Loans

Officials are worried that many consumers are heading for a lifetime of debt because they are only making paltry minimum repayments on their credit card debts, which the providers are happy to accept because it means that they keep the customers in debt and make more interest off them.

A recent report also showed that some consumers were paying three times more interest than others simply because of the credit card that they were using. The report said that using the wrong card could be a very costly mistake and could make a huge difference to the amount that the cardholder pays on their debt. In fact, the report claimed that it could take sixteen years longer to repay a debt simply by using the wrong credit card.

The minimum repayments that are requested by credit card providers are supposed to cover at least the interest that is being charged and a fraction of the debt itself. However, for many who are paying rock bottom minimum repayments on their credit cards the debt could drag on for years or even decades, as the repayment that they are making does not even touch the actual debt itself.

For example, making repayments on a Lloyds TSB card at just the minimum amount requested on a £1000 debt would mean that it took over two decades to clear the balance.

David Black from Defaqto stated: ‘The differences of how long it will take you to repay debts on different cards are staggering. It is no wonder that consumers don’t fully understand the risks of making only the minimum repayment. That is good for the card companies, because they can charge you interest on your debt for longer.’

Minimum repayment encouraging credit card debt is a post from: Glitec Loans

Over the past couple of years, where finances have been tight for many, homeowners have been under the impression that the vital thing that they had to do was ensure that they were paying their mortgage and secured debts before worrying about unsecured debt, as otherwise they could lose their homes. However, a recent report has shown that some may end up losing their homes anyway for failing to keep on top of repayments on credit cards.

Up until now lenders have not been able to repossess a home for failure to pay on an unsecured debt, as the Ministry of Justice said earlier this year that it would be postponing introducing a new law that would allow lenders to do this. However, it has now stated that the issue is to be open to consultation within the industry starting from next month. The consultation period is set to last for six weeks.

There are worries that giving the green light to lenders to take repossession action for unpaid unsecured debts could lead to unscrupulous lenders taking action for quite small debts on which the borrower has defaulted, and could counteract the effects of any measures that the government has taken in order to try and reduce the number of repossessions.

Repossessions relating to credit card debt could increase is a post from: Glitec Loans

Officials have said that by this time of year the housing market traditionally goes very quiet, as consumers focus their efforts on getting Christmas shopping sorted, but this year has been very different.

The usual trend sees people looking for property in the spring or autumn according to officials, but this year has seen something of a turnaround. According to the Frank Knight estate agency there are a number of factors that may be behind the surge in interest in the property market at this time of year.

One of the things that may be resulting in increased sales could be the lack of competition, with demand for property far higher than supply at the moment.

Another factor that could be affecting rising property sales at this time of year is the rock bottom interest rate, with many people keen to get their hands on a more affordable mortgage deal before the base rate increases again, as it is expected to do next year by many industry officials.

Many are also keen to take advantage of the stamp duty holiday on properties of up to £175,000, which is set to end at the end of this year.

Nick Chivers from the estate agency said: “We are very busy: one house that came on earlier this month at £475,000 had 84 viewings in one week. A lot of people have been paying quite a lot of rent at the same time as not earning much interest on their capital, so their equity lump is being eroded, and that’s partly what’s driving the demand.”

Property market more active than usual for this time of year is a post from: Glitec Loans

Figures were released from the Bank of England, and showed that consumers are trying to rid themselves of various loans and credit cards debts in a bid to try and reduce their outgoings are their overall debt levels.

The number of mortgages that were granted went up to the highest level since March of last year according to the figures.

However, overall lending levels were down, which officials have said indicated that people are less likely to take on debts in the current climate, and those that already have debts are looking to get their debts repaid as quickly as possible. During the month consumers repaid £579 million worth of debt. This reflected the biggest overall repayment on unsecured debts since records began back in 1993.

Repayments on overdrafts and loans fell for the ninth month in a row in October. It is thought that there are a number of factors behind the drop in credit card debt as well, two of the main factors being restrictions on lending levels from credit card providers and increased wariness from borrowers with regards to taking on further debt. Remortgaging levels for the month were also down according to figures.

Howard Archer, an economist from Global Insight, said: ‘The record, and fourth, successive net repayment in consumer credit in October is clearly the consequence of many consumers’ desire to reduce their debt, low demand for credit and a lack of availability of unsecured credit from banks.’

Many people are also loathe to put their money into savings at present due to low interest rates, and instead are putting the money towards paying off debt.

Borrowers trying to pay off more debt is a post from: Glitec Loans

She said that she contacted Yes Loans and went through some application details, and she was then asked for her bank account details.

Under the impression that she had been approved for the loan she gave her details to the loans officer, but after doing so she was put through to another member of staff who said that she had been turned down for the loan.

The second staff member told Louise that Money Worries, which was the sister company of Yes Loans, could help to get her into a debt management plan that would reduce her repayments and help her stabilise her finances, and that there would be an upfront fee for this.

Louise went on to state that the categorically told the staff member that she did not want to go ahead with this until she had discussed it with her partner.

However, when she received her bank statement she found that a sum of money had been paid out to Money Worries.

Louise said that she was outraged, because she hadn’t signed anything and had not even verbally agreed to go ahead with the plan. She said that the missing money caused them a lot of problems financially.

Officials from Money Worries disagreed, stating that she had agreed verbally to the debt management plan and that the company had subsequently carried out work on her behalf. The firm added: “We categorically deny that we take fees from customers’ accounts without them realising.”

Consumer felt duped by Yes Loans is a post from: Glitec Loans

Many people have been turning to their credit cards to get them through various tight spots financially, and without even realising it may have accrued a large amount of credit card debt that they suddenly realise that they will struggle to repay.

An official from a national debt advice agency has said in a recent report that some of the people that find themselves in this position, with a high amount of credit card debt and other unsecured debts that they cannot afford to repay, may find that their best option is to opt for one of these IVAs, which is a legally binding agreement that could help them to get through their debt problems more effectively.

An IVA is often referred to as a softer form of bankruptcy, and in order to qualify borrowers will need to have a certain level of unsecured debt.

For those that do qualify an assessment of outgoings and income is made, and then a plan is set up whereby the borrower makes a set monthly repayment to an agent, which is then distributed amongst the different creditors on a pro rata basis.

Generally, after five years any amount that is still outstanding is written off and the IVA is considered complete.

An official from the debt charity Credit Action stated: “A lot of people are reliant upon being able to borrow on their credit cards to smooth out peaks and troughs in their income and in many unfortunate situations they rely on cards simply to buy essential living costs.”

More people could end up taking out IVA due to credit card debt is a post from: Glitec Loans