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CCJs Soar

By: Darren Ferneyhough The amount of people with CCJs registered against them for unpaid debts rocketed last year in yet another concerning sign of our over-indebtedness.

An amazing, 843,853 people had CCJs registered against them, up by a third compared on the previous year and the second consecutive year that the figure has grown.

The Registry Trust, the organisation that tracks the figures on behalf of the Lord Chancellor's office claims that lenders are bringing cases to court earlier than ever before in order that they have a claim on the debtors property.

A CCJ is the first stage in a legal process that can lead to bailiffs at your door, taking possession of goods to the value of the debt. Also, it is the first step for a lender to apply for a charging order, which converts any unsecured debt into a secured one, enabling it to make a claim against the value of the debtor’s property.

CCJs are of course best avoided completely whenever possible, and for homeowners with a number of debts which are proving difficult to manage and risk acquiring CCJs as a result, an oft used and viable tool is to consolidate a number of smaller, unsecured loans by taking out a debt consolidation loan utilising their home equity to secure a lower interest rate, which can serve to lower the monthly cost of repaying their debts, especially if combined with a longer repayment period.

CCJs stays on a person's credit record for six years unless they pay the balance within a month of its issue. The CCJ will remain on file, even if the debt is paid within the six years, but will be marked as 'satisfied'.

Even for borrowers who already have CCJs, there are still solutions available to get their finances back on track. There are a number of lenders who specialise in providing debt consolidation loans to borrowers with adverse credit, and who will lend to borrowers with not only CCJs, but also mortgage arrears and even to borrowers in an IVA or bankruptcy.

The lenders have had bad debt levels explode in the last few years as increasing numbers of borrowes take advantage of less stringent bankruptcy laws and Individual Voluntary Arrangements. The most recent financial figures from the banks show that Barclays, Royal Bank of Scotland (owners of NatWest), HSBC and Lloyds TSB collectively wrote off £11.6bn in customer bad debts last year.

Registry Trust chairman Malcolm Hurlston said: ‘Judgments are an important item in creditors' armoury, particularly for dealing with people who are 'won't pays' rather than 'can't pays' and the sharp rise indicates that it is creditor behaviour that is changing.’

Mr Hurlston continued: ‘Creditors are seeking judgments as the necessary first step to obtaining charging orders against debtors' properties, thus securing their share in any equity. It is a further warning to homeowners who may have borrowed too heavily on top of rising interest rates and escalating house prices.’

Article Source: http://www.lifeweightloss.com

Darren Ferneyhough is head of marketing at The Money Helper and renowned for his experience in a number of areas in the UK financial services market. Darren currently writes for the online portal Loan-Sense.

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