The general trend of the last five years has been increasing numbers of CCJs and the trust also added that a judgment is incontrovertible proof that debt has not been managed.
Following regulatory changes such as the Mortgage Market Review (MMR) and latterly the Mortgage Credit Directive (MCD), responsible lending is embedded in our industry.
So, the fact that there has been an increase in judgments being issued is both disappointing and a little scary.
Couple these figures with recent commentary on unsecured debt such as credit card and car finance increasing considerably, and this may be enough to underline any apprehension that some may have.
There are also some that may feel that we didn’t learn lessons from the financial crash a decade ago. However, as an industry we are in a much better place now and are well positioned to help reduce this trend and negative commentary.
After all a large part of this is all about consumer education in debt management, which is paramount.
Brokers can help
There are many reasons why people’s financial situations result in judgments, or worse, and a good proportion of these can be either prevented with appropriate insurance products or alleviated with good financial management.
Mortgage brokers can help by assisting the consumer to manage their monthly outgoings and secondly, offer a little bit of education too.
There are many products available for credit impaired clients that will help stop them descending in to a downward spiral and not being able to cope.
I would urge all brokers to regularly communicate with their clients on the subject of managing finances, as there are products available to benefit any that are financially strained, including alternative solutions such as a second charge.
There are 14 lenders that will consider varying levels of credit impairment and seven lenders that have rates under 5%.
Speaking with any clients struggling with monthly budgeting would also present an opportunity to educate them on the potential outcome of poor financial management and if they are beyond the point of no return, we could advise them as to the right direction for getting the appropriate support.
Access to financial products for credit repair can also have longer term benefits to get the client back on their financial feet.
The aim here is to help the client become financially included rather than excluded from mainstream financial products in the term.
So, although the rise in CCJs continues, there are also opportunities for the industry to continue to educate clients on the alternative option, better financial management and help clients build a better financial future.