News In Focus
12 February 2010
MSPs pass Home Owner and Debtor Protection Bill
Homeowners faced with repossession will be given greater protection under the Home Owner and Debtor Protection (Scotland) Bill, which was yesterday approved unanimously by MSPs in the Scottish Parliament.
Under the bill all repossession cases will have to be heard in court, except where there is evidence that the property has been voluntarily abandoned. Lenders will have to demonstrate that they have taken reasonable steps to avoid repossession.
Homeowners will also be allowed lay representation to help them state their case, if they cannot afford a lawyer.
The vote came on the day the Council of Mortgage Lenders annunced that the number of homes repossessed in the UK last year rose to 46,000, the highest for 14 years though well short of the 75,000 predicted at the start of the year. The CML said low interest rates and lender forbearance had helped reduce the numbers, but forecast a further rise in 2010 to 53,000 cases.
Housing and Communities Minister Alex Neil said that too many Scots had found themselves caught in a debt trap as a result of the recession, putting family homes – and families – at risk.
"In implementing the provisions in the bill, we will continue in the spirit of co-operation that has been a feature of discussions among all political parties in the chamber.
"We will also ensure lenders, the courts, advice sector and others are geared up for implementation of the bill."
The debtor protection provisions extend the debt relief offered by bankruptcy to some who cannot presently meet bankruptcy criteria, by introducing a certificated route into bankruptcy. They also extend the protection currently offered for the family home in bankruptcy to trust deeds for creditors.