Debtor Protection Bill
The Scottish Government recognises the responsibility it has to take prompt action where it can to help the Scottish people, particularly in the context of continuing economic uncertainty.
The proposed Debtor Protection (Scotland) Bill will introduce measures to protect the people of Scotland who are struggling to deal with debt.
It will also increase protection for those who are facing repossession or become bankrupt.
The Debtor Protection (Scotland) Bill will be introduced into the Scottish Parliament in autumn 2009.
The Bill offers protection by:
- Providing for all repossessions cases to involve court proceedings with the exception of cases where the borrower voluntarily surrenders possession
- Requiring all lenders to demonstrate to a court that they have taken reasonable steps to avoid repossession, i.e. a 'pre-action protocol with teeth'
- Enabling the use of lay representation in repossessions cases where the home owner wishes it
- Extending the period by which a sheriff may postpone the sale of a family home in bankruptcy from one to three years
- Introducing a requirement for trustees in bankruptcy and trust deeds to notify the local authority of the sale of a family home
- Allowing the exclusion of specified assets, including the family home, from protected trust deeds
- Improving access for debtors to debt relief by providing a new route into bankruptcy