Newton Abbot, UK (PRWEB) February 5, 2009
Credit card companies are now more likely to take legal action against borrowers who default on payments, warns Credit Problems No Problem (http://www.creditproblemsnoproblem.co.uk). The credit card companies are seeking County Court Judgements (CCJ) against bad credit card holders who default on payments. If money is still not forthcoming, the credit card companies are then applying for charging orders against the homes of borrowers who cannot pay up.
"In the past credit card companies shied away from taking a defaulter to court and applying for a CCJ against them," said a spokesman for Credit Problems No Problem, which specialises in 'bad credit' loans online for borrowers with County Court Judgments and defaults.
"This is because interest stops accruing when a CCJ is registered against the defendant - preventing a credit card company from adding interest to the monies already owed. But times are changing now. Many card holders are home owners. The credit card companies are seeking CCJs against them then going for charging orders."
A charging order is made by the court and placed on your property's Land Registry file. Should you sell your home in the future, the charging order has to be paid before you receive any money from the sale.
"You should also be aware that a charging order cannot alone be used to force the sale of your home. We advise anyone faced with having a charging order placed on their property to get good legal advice and proper representation at court. Better still, talk to your credit card company and seek another solution if at all possible."
According to the Ministry of Justice, 132,000 charging orders were granted by courts in England and Wales last year, 42 per cent than the previous 12 months and at least a tenfold increase since 2000.
Credit card companies' crackdown on bad credit borrowers comes despite a string of interest rate cuts by the Bank of England's monetary policy committee - 0.5 per cent in October, 1.5 per cent in November and 1.0 per cent in December and 0.5 per cent in January.
Last month, it was reported that increasing numbers of non-mortgage debts - such as credit card debts - were triggering repossessions. One building society discovered that 28 per cent of all its repossessions were initiated by other lenders.
The sudden increase in repossessions has prompted City regulator the Financial Services Authority to warn lenders over their behaviour towards borrowers who default.
Last November, data from financial information service Moneyfacts revealed that credit card companies had raised interest rates or fees on at least 10 per cent of credit cards. This pushed up the average rate on all credit cards from 16.8 per cent to 17.2 per cent.
Some credit card companies have also cut their zero per cent balance transfer rates - making it harder for borrowers to pay off their debts cheaply. Moneyfacts said the credit card companies were pushing up interest rates to cushion themselves against defaults.
In November it was also reported that the Government had given credit card companies two weeks to agree to stop overcharging borrowers. Prime Minister Gordon Brown told the Commons: "We have got to have proper measures to regulate the industry where people are charging exorbitant rates and we will take whatever action is necessary."
Credit Problems No Problem holds a Consumer Credit Licence issued by the Office of Fair Trading. The company is also covered by the Financial Ombudsman.
Credit Problems No Problem is also registered with the Information Commissioner's Office for Data Protection.
For rapid help, phone 0800 412 5634 or visit http://www.creditproblemsnoproblem.co.uk.
Notes For Editors:
Credit Problems No Problem Ltd
Tel: 0800 412 5634
Credit Problems No Problem was formed in 2003, bringing together a team of specialists that together offers 27 years of expertise to help applicants gain the unsecured loans they need. From its UK head office in Devon, Credit Problems No Problem operates across Britain, sourcing loans for people with bad credit.
Credit Problems No Problem holds a Consumer Credit Licence issued by the Office of Fair Trading. The company is also covered by the Financial Ombudsman. Credit Problems No Problem is also registered with the Information Commissioner's Office for Data Protection.
No fuss service - guaranteed.