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Credit card companies looking to secure loans

2nd July 2008

Credit card companies are increasingly looking to securing their money against applicants' homes, it has been claimed.

According to James Falla, managing director of debt consultancy Thomas Charles, the worsening conditions for the lenders has seen them put increased pressure on debtors.

This has resulted in a sea change in the market with more and more lenders applying to take charges over property rather than treating the loan debt as though it is unsecured.

He said: "A credit card in general is unsecured debt - if you don't pay it, it's not secured against anything.

"But what any credit company can do is, if you do own a property and you’re not repaying the debt that you owe in the proper manner, they can apply to the court … to secure it against your home."

He added: "What that will then mean is that people in debt difficulties may start seeing increased pressure in situations where they’re looking at repossessions and that kind of thing."

Source : http://londonstockexchange.com/