New laws planned on repossession

New laws will make it harder for homes to be repossessed

Plans which aim to give home owners greater protection from repossession have been outlined by the Scottish government.

The Home Owner and Debtor Protection Bill seeks to make it more difficult for family homes to be seized when the owners fall into debt.

Housing Minister Alex Neil said: "The government recognises it has to take action where it can to help people."

Repossessions have reached historically high levels in the current recession.

Mr Neil said: "With an increasing number of families facing financial difficulties, it is imperative that they are protected with the full weight of the law.

"When families are feeling the pinch it is important that politicians pull together to increase protection for those who are facing repossession or become bankrupt."

An estimated 65,000 homes will be repossessed in the UK this year, according to the Council of Mortgage Lenders - up 25,000 on last year.

Debt relief

The Scottish legislation is intended to improve protection for home owners at each stage of the repossession process, with all cases now to be heard in court.

Lenders will also have to show in court that they have taken reasonable steps to avoid repossession.

The Scottish proposals follow the recommendations of a debt action forum which was set up by ministers to address the issue.

They will also extend the protection currently offered for the family home in bankruptcy and trust deeds, an alternative to bankruptcy where the debtor's assets are conveyed to a trustee.

Debt relief measures will also be extended to some people who have not yet fallen into bankruptcy.

The planned legislation has cross-party backing.

Graeme Brown, director of Shelter Scotland, also welcomed the proposed measures. He said: "Given that thousands of families in Scotland are staring the spectre of repossession in the face, this bill could act as a saviour for them by making repossession a last resort."

Citizens Advice Scotland chief executive Kailiani Lyle said its advisers dealt with thousands of people every year worried about mortgage debt and repossession.

She said: "The credit crunch and the recession have brought a sharp increase in these cases, and the human consequences are heart-breaking.

"There can be few things more awful than the prospect of losing your home and of seeing your family on the street."