Tribunals, Courts and Enforcement Bill [HL]

I wonder if I may assist because I have a briefing on this which the noble Lord, Lord Kingsland, may not have. The issue which arises is the possibility that this Bill permits an unsecured creditor to obtain a security for his debt. When an unsecured creditor lends money or provides goods, he incorporates in the price the concept that they are unsecured. If a secured debt were created, no doubt the cost of it to the debtor would be cheaper. The Bill gives to an unsecured creditor the value of security. Generally speaking, for people who are not very well off it means a charging order on their home. Clause 85 introduces changes to the Charging Orders Act 1979 which provides creditors with a way of enforcing a court judgment by placing a charge on the debtor’s property. As I say, that is often the home. So the creditor who uses this procedure can secure a previously unsecured debt. A creditor who obtains a charging order can obtain a court order to sell off the asset subject to the charge, although such sale orders are comparatively rare. The Bill proposes that even though there is an agreement between the creditor and the debtor for the repayment of the debt by agreed instalments, and even though the debtor is keeping up those instalments, nevertheless the creditor can obtain a charging order and thereby ultimately, if necessary, sell off the debtor’s home.