Compromise over home seizures

Ministers last night offered a compromise over a new law which could lead to people losing their homes for debts of just £3000 but failed to silence all their critics. The Scottish Executive relented in the face of fierce opposition from homelessness charities, legal experts, citizens advice bureaux, and back-bench MSPs. However, their plan was criticised for not going far enough. Under the Bankruptcy and Diligence Etc (Scotland) Bill, which is due to complete its final parliamentary stage today, creditors will be able to use "land attachment" orders against people with more than £3000 of unsecured debt, such as credit cards or catalogue debts. If, after six months, the debt is not repaid, the debtor's home and land can be sold. Although ministers say there are more than 20 hurdles to clear before a sheriff allows a house sale, critics fear thousands of families will be made homeless. They claim the mere threat of losing their home will panic people into borrowing yet more money – possibly from loan sharks – or result in them neglecting mortgage payments, risking repossession by the bank. Citizens Advice Scotland calls land attachments the "nuclear option" for debt recovery. In light of the attacks, Deputy Enterprise Minister Allan Wilson last night tabled an amendment to the bill giving ministers the power to exempt homes from land attachments if, at some unspecified date, they feel they have worsened homelessness. The amendment would also allow ministers to give sheriffs more discretion in considering whether house sales should go ahead. Mr Wilson told TheHerald: "I don't think it's a climb-down, I think it's a reasonable solution. I have added to this bill by giving ministers the power to deal with unintended consequences." However, Gavin Corbett from Shelter Scotland, the housing and homelessness charity, urged MSPs to ensure that homes were exempt from land attachments from the outset, rather than wait for the system to go wrong. He said: "Recovering debt through these means is heavy-handed and excessively harsh. We could see homeowners with a debt of as little as £3001 losing their home to repay creditors. If we have a chance to avoid laws that could make people homeless, then we should do so." Mike Dailly, the secretary of the Scottish Association of Law Centres, said in its original form the land attachment provision was "the most regressive piece of legislation ever introduced into the Scottish Parliament". Even in its amended form it would cause problems, he warned. "How will ministers know if this causes homelessness? What will happen is people will neglect their secured debts to get the land attachment off their back, and end up in court having their house repossessed. "There's no way to track those figures, so ministers will never know the impact of this law. If they don't exempt homes, they should at least give courts the power to consider people's personal circumstances when considering a warrant sale, as happens in England." The bill has also stirred trouble within Labour's own ranks, with Gordon Jackson, the MSP for Glasgow Govan, asking for a full, and possibly embarrassing, review of the system within 15 months of it passing into law. This would force the executive to reveal the number of people made homeless as a result of the system and the debts recovered. Alex Neil, the SNP MSP, who has tabled an amendment which would immediately exempt homes from land attachments, said the minister's deal was unacceptable. Citizens Advice Scotland said debtors would still be intimidated by land attachments under the amendment, and urged MSPs to exclude homes from the system.
Herald November 30 2006