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Govan MSP secures concessions to prevent 'land attachment' homelessness
Scottish Ministers agree to Bankruptcy Bill amendments
The Scottish Parliament passed the Bankruptcy and Diligence etc., (Scotland) Bill on 30 November 2006. While Govan Law Centre remains of the view that land attachment will be seized up by unsecured creditors resulting in thousands of families being threatened with homelessness, we are grateful for the concessions secured by Gordon Jackson QC MSP.
Govan Law Centre had been working closely with Mr Jackson on amendments to require the Scottish Ministers to publish a comprehensive report on the impact of land attachment on debt recovery and homelessness within 15 months of enactment, and to give the Scottish Ministers delegated powers to provide additional debtor protections to prevent family homes being subject to land attachment warrant sales. We had also worked closely with Citizens Advice Scotland and others on amendments to exempt residential property from land attachment warrant sales, and to give sheriffs the discretion to refuse warrant sales of residential property, however, given the Scottish Executive position on land attachment concessions it was thought unlikely such amendments would be successful.
The day before Stage 3 consideration of the Bill, the Scottish Executive tabled late manuscript amendments to sections 81 and 87 of the Bill - effectively taking on board one of the two amendments lodged by Gordon Jackson (reproduced below as amendments 208 to 211). These amendments give the Scottish Ministers the power to exempt residential property from an application for a warrant to sell attached land. They also enable the Scottish Ministers to add additional factors which the court must have regard to in deciding whether to grant a warrant for sale.
Following a persuasive speech by Gordon Jackson, it became clear there was considerable backbench support for the principle of a 'Statement on the impact of land attachment'. The Executive had agree to undertake to provide a statement after 2 years, but was unwilling to make this a statutory requirement. The issue was important for two reasons. Firstly, land attachment may result in homeless either directly or indirectly (for example, a debtor using mortgage payments to repay a land attachment debt). If land attachment does lead to a major increase in homelessness it is vital evidence is ingathered so that the Scottish Parliament can require the Scottish Ministers to use their power to exempt residential property. Secondly, without a requirement to collate evidence and undertake research it would be difficult to ascertain the extent of the problem, particularly as the Civil Judicial Statistics series (of court statistics) has been discontinued while it is subject to review. The latest civil court statistics available to the public in Scotland are from 2002.
However, in the afternoon Stage 3 consideration of the Bankruptcy Bill the Deputy Minister for Enterprise & Life Long Learning, Allan Wilson MSP, indicated the Executive was now prepared to support Gordon Jackson's 'Statement on the impact of land attachment' (reproduced below as amendment 157 and introducing a new section to the Bill). Accordingly, the issue of land attachment will remain firmly on the political agenda - indeed from the amendment a formal statement must be laid before the Scottish Parliament no later than 15 months from enactment. Importantly, the door remains open to exempt family homes from land attachment.
There are, of course, many progressive aspects to the
Bankruptcy Bill. In particular we were pleased to see the
Deputy Minister bring forward an amendment at Stage 3 allowing a
debtor appearing at the first calling of a petition for sequestration
to ask the sheriff to continue the petition for up to 42 days to
enable the debt to be repaid or satisfied (section 23A). We
also warmly welcome the provisions making it easier for debtors to
apply to the court for the release of arrested monies in bank
accounts (an initiative orginally proposed by the Bank Arrestment
Action Group, which first met at Govan Law Centre in February 2000),
the ability to apply for time to pay in summary warrant procedure
(i.e. for council tax debt); much needed improvements to DAS; and a
route to debtor led bankruptcy for low income, no asset debtors.
Mike Dailly, Principal Solicitor
Govan Law Centre
30 November 2006
After section 115
157 After section 115 insert
< Statement on impact of land attachment
(1) The Scottish Ministers must, within 15 months of the commencement of this Chapter,
prepare, publish and lay before the Scottish Parliament a statement setting out the
impact of land attachment on debt recovery and homelessness.
(2) The statement must specify
(a) the number of land attachments registered;
(b) the number of warrants for sale
(ii) refused; or
under section 86;
(c) the number of persons made homeless as a consequence of this Chapter;
(d) the mean and median sums recovered by land attachment; and
(e) the effect which land attachment appears to have had on debtors abilities to meet
ongoing financial obligations and repay other debts.
(3) In this section, homeless has the meaning given in section 24 of the Housing
(Scotland) Act 1987 (c.26).>
208 In section 81, page 58, line 14, after <may> insert <, subject to subsection (1A) below,>
209 In section 81, page 58, line 15, at end insert
<(1A) The Scottish Ministers may by regulations provide that where attached land, or any part of it, is
(a) a dwellinghouse; or
(b) a dwellinghouse of such description or class as may be specified in the regulations,
an application under subsection (1) above may be made only in relation to such part of the attached land which is not a dwellinghouse or, as the case may be, such a dwellinghouse.>
210 In section 87, page 63, line 8, at beginning insert <Subject to subsection (5A) below,>
211 In section 87, page 63, line 15, at end insert
<(5A) The Scottish Ministers may by regulations modify subsection (5) above to
(a) add to;
(b) remove from; or
the matters mentioned there.>