Committee's fears over homes-for-debt rules

Enterprise and Culture Committee concerned that Bankruptcy Bill could lead to homelessness

News, 17 May 2006

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A report from Holyrood's Enterprise and Culture Committee has recommended that people's homes should not be used to settle their unsecured debts.

In its report published today on the Scottish Executive's Bankruptcy and Diligence etc (Scotland) Bill, the committee welcomes the general principles of the bill but records a number of points where it believes it could be improved.

In particular the committee voices its concern over the new diligence of land attachment. This would allow a creditor to apply for a court order forcing a debtor to sell his or her property if more than £1,500 was owed.

The committee's convener Alex Neil MSP said there was a recognition of the need to reform the laws relating to credit and debt, but the new diligence on land attachment was the issue people had felt most strongly about in submissions to the committee.

Having listened to evidence from the homeless charity Shelter and Citizens Advice Scotland, among others, the committee urges the Executive to amend the proposal so that the debtor's main dwelling is excluded.

"We believe that there should be a presumption against selling a home to recover a debt if the end result is homelessness", said Mr Neil.

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