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Debtors 'more likely to have home repossessed than end up in prison'

By Sarah Engle, Thu 31 Jul 2008 - Published in Loans

People who take out loans and are then unable to meet the repayments could face a number of different consequences, according to Credit Action.

Director of the financial education charity Chris Tapp said with secured debt like mortgages the most likely outcome is that lenders will repossess a debtor's home or force them to sell their property.

He insisted: "Lenders will try to recoup their money by seizing property as opposed to forced imprisonment."

However, Mr Tapp claimed, where unsecured loans were concerned, lenders might use country court judgements and bailiffs in an attempt to get their money back.

By the end of May 2008, the amount of personal debt in the UK was £1,433 billion, an increase of £107 billion compared with the same month in 2007.

Meanwhile total lending secured against homes was £1,210 billion, a rise of 8.2 per cent over the course of the previous year.