The Ministry of Justice has said that lenders are moving to secure credit card and loan debt agains houses. This is a further sign of the jitters that are affecting the lending industry as the credit crunch continues to bite.

Banks are shoring up their lending positions, and are now ever quicker to seek court orders which would allow them to secure debt against property.

The number of these court order applications rose 42% in 2007 to almost 132,000, and the figure is expected to increase further this year. If successful, the lender is granted a charging order, which, in effect, secures the debt against the home of the borrower. When the house is sold, the lender is repaid from the proceeds.

The figures quoted above were obtained by the BBC, and come from internal Ministry of Justice reports. They also show a growing trend of lending criteria being tightened, while at the same time bankruptcy petitions have almost doubled in four years.

The Chancellor of the Exchequer, Alistair Darling has urged lenders to help struggling borrowers, and Philip Hammond (the Shadow Treasury Chief Secretary) claims that UK personal debt is increasing by £1 million every five minutes.

This entry was posted on Monday, April 28th, 2008 at 5:34 pm and is filed under General Debt News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.