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Credit: How your credit card could cost your home; Personal debt in the UK is now at a whopping pounds 17trillion, and advice agencies warn that financial institutions are poised to get tough with borrowers.

Byline: Alex Morgan

IF YOU don't keep up with your debt repayments, you could end up in court and even lose your home.

Lenders are becoming increasingly tough on borrowers who fall into arrears.

And that means even unsecured debts - such as credit card balances - could ultimately cost you the roof over your head.

The UK's collective personal debt now stands at more than pounds 1trillion - that's pounds 17,000 for every man, woman and child.

Over 300,000 people owe at least pounds 10,000 on credit cards alone, and more than ever are struggling with their repayments.

Frances Walker, spokeswoman for the Consumer Credit Counselling Service, which runs the Scottish Debtline, says: 'Calls to our helplines are up 50 per cent on last year.'

It's a similar story at Citizens' Advice Scotland. Spokesman Ian Brown says: 'Debt is the biggest issue we deal with. The total debt handled by our 77 offices last year was pounds 157m. That's a rise of pounds 27m in a year.'

In England and Wales, a growing number of lenders are taking legal action against borrowers who fall seriously behind.

Last year, courts south of the Border granted 45,000 charging orders - an increase of 32,000 in just five years.

These allow the lender to seize money left over when the borrower sells his or her home to settle the debts.

But if it doesn't want to wait that long, having an order means it can also force a sale.

Here, lenders can take an even harder line, often pressing for full-scale sequestration - the Scottish form of bankruptcy - if borrowers consistently fail to make repayments.

Matt Henderson, a Scottish-based partner with accountancy firm Grant Thornton, says: 'We are seeing a lot more sequestrations.

'People incur personal loans, get high credit limits and run up catalogue and store cards debts.

'Opportunities to get into debt are all around in a way they weren't 10 or 15 years ago.'

There were 1461 sequestrations in the three months to the end of September, a rise of 58 per cent on the same period in 2004.

In the first nine months of this year 3676 Scots were sequestered - 379 more than in the whole of 2004 - potentially losing everything, including their homes.

But Matt fears these cases are just the tip of the iceberg.

He says: 'I believe there will be tens of thousands of families across Scotland who are on the verge of a financial crisis.'

Ian Brown says local authorities are also getting tougher when it comes to council tax arrears.

He points out: 'They are applying to the courts for more bank arrestments.

'There's a danger people can be left with virtually nothing to live on.'

And Scots creditors are about to get a new weapon.

A spokeswoman for the Scottish Executive says: 'There plans to introduce an equivalent to charging orders in Scotland.

'These will be called land attachments and they will be in the Bankruptcy and Diligency Bill we will be introducing shortly.'

Of course, the best way to protect your home and other assets is to keep up with your debt repayments.

If you can't, there are plenty of sources of free help.

But if you do end up in court, the panel explains what can happen.

Where to get help

FOR free help to sort out your debts, contact the Scottish Debtline (0800 138 3328), your local money advice centre ( or the Citizen's Advice Bureau (see phone book or

For advice on sequestration and the alternatives, call the Accountant in Bankruptcy helpline (0845 762 6171) or visit
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Title Annotation:Business
Publication:Daily Record (Glasgow, Scotland)
Date:Nov 22, 2005
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