On 5 February 2010, the Ministry of Justice (MoJ) published a consultation paper seeking views on whether a minimum threshold should be imposed on orders for sale applications relating to Consumer Credit Act 1974 (CCA) debts only.

Currently, creditors can apply to the court for an order for sale, to enable the property to be sold to repay the debt, even where the amount owed is relatively small. The concern is that there is a risk that the practice could grow in the current economic climate and more people lose their homes due to relatively low levels of debt they are unable to repay.

The MoJ is therefore seeking views on whether a minimum threshold should be introduced below which creditors cannot apply for orders for sale to enforce charging orders relating to what were initially unsecured CCA debts.

The MoJ also sets out four alternative options available:

  • introduce a threshold on all charging order and order for sale applications.
  •  restrict the scope of orders for sale so they no longer apply to consumer credit debts or residential property.
  • introduce a two-limb test before an order for sale can be granted, so that a debt must be of a high amount and account for more than a certain percentage of all debts owed to the applicant. t
  • ake no action.

The consultation period ends on 30 April 2010.