Bankruptcy Bill passed

Ministers undertake to review impact of land attachments

News, 1 December 2006

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The Bankruptcy and Diligence etc (Scotland) Bill passed its stage 3 vote in the Scottish Parliament yesterday and is set to receive royal assent next month.

The bill, which reforms the law on personal insolvency, company floating charges, and property attachment in security of debt, attracted controversy mainly through the new "land attachment" diligence under which property including houses can be attached and ultimately sold to pay any debt over £3,000.

Critics argued that there are insufficient safeguards to prevent people being made homeless but ministers resisted pressure to strengthen debtor protection, arguing that forced sales are likely to be very rare. They did however put through an amendment under which the impact of the new orders will be reviewed after 18 months, with power to exempt homes from the legislation if ministers think fit.

Deputy Minister for Enterprise and Lifelong Learning Allan Wilson said that the reforms would help ensure a fairer, more effective framework for both debtors and creditors.

"The bill will do more to help people who experience debt problems and help people who are overcome by debt to start again. But it also offers better protection for the public against those who try to abuse the system."

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