County Court Judgments Soar

The number of consumers with County Court Judgments registered against them for debt rocketed last year in another worrying indication of our over-indebtedness.

A massive, 843,853 people had County Court Judgments registered against them, an increase of a third compared on the previous year and the second year in a row that the figure has grown.

According to the Registry Trust, the organisation that tracks the figures on behalf of the Lord Chancellor's office, lenders are bringing cases to court at an earlier stage of the process of debt recovery to make sure they have a claim on the debtors property.

County Court Judgments are the first step in a legal process that can culminate in bailiffs knocking on your door, demanding goods to the value of the debt. It is also the first step for a lender to obtain a charging order, which converts an unsecured debt into a secured debt, enabling it to make a recover it’s debt from the value of the debtor’s property.

County Court Judgments 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 County Court Judgments as a result, an oft used and valuable tool is to consolidate a number of smaller, unsecured loans by applying for a debt consolidation loan using the equity in their property to secure a lower interest rate, which can serve to lower the monthly cost of repaying their debts, especially when combined with a longer repayment period.

County Court Judgments stays on a person's credit file for six years unless they pay it off in full 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 consumers who already have County Court Judgments, 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 County Court Judgments, but also mortgage arrears and even to consumers in an IVA or bankruptcy.

Many lenders have had bad debt levels explode in recent years as more consumers take advantage of less stringent bankruptcy laws and Individual Voluntary Arrangements. The latest set of financial figures from the banks show that Royal Bank of Scotland (owners of NatWest), HSBC, Barclays 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 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.’

Darren Ferneyhough is head of marketing at The Money Helper and a respected commentator on a number of subjects in the UK financial services market. Darren currently writes for the online portal Loan-Sense.

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

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