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Home | Business | Customer Service An amazing, 843,853 people had CCJs registered against them, up by a third compared with 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 going to the courts at an earlier stage of the process of debt recovery in order that they have a claim on the debtors property. A CCJ is the first step in a legal process that can result in bailiffs knocking on your door, demanding goods to the value of the debt. Also, it is the first step for a lender to take out a charging order, which converts an 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 valuable tool is to consolidate a number of smaller, unsecured loans by taking out a debt consolidation loan utilising the equity in their property to secure a lower interest rate, which can serve to lower the monthly cost of servicing their debts, especially if combined with a longer repayment period. A CCJ stays on a person's credit file for six years unless they pay the balance within one month of being issued. The CCJ will remain on file, even if the debt is paid within the six years, but will be marked as 'satisfied'. Even for consumers 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 offering debt consolidation loans to consumers with adverse credit, and who will lend to consumers with not only CCJs, but also mortgage arrears and even to consumers in an IVA or bankruptcy. The lenders have had their bad debt levels rocket in the last few years as increasing numbers of debtors become aware of the less stringent bankruptcy laws and Individual Voluntary Arrangements. The most recent financial figures from the banks show that Lloyds TSB, HSBC, Barclays and Royal Bank of Scotland (owners of NatWest) collectively wrote off £11.6bn in customer bad debts last year. Malcolm Hurlston, Registry Trust chairman 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 further added: ‘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.articlewheel.com
Darren Ferneyhough is a partner in The Money Helper and an expert in a number of areas in the UK financial services market. Darren currently writes for the online portal Loan-Sense.
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