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Proposals for a new law to protect people affected by debt were published in the Scottish Parliament today.

The Home Owner and Debtor Protection (Scotland) Bill is the first of its kind in the UK to review legislative protection available to home owners and to address practical support for those in financial difficulty.

The main proposals in the Bill include:

• Improving protection for Scottish home owners faced with repossession at each stage of the repossession process, in particular by ensuring that all repossession cases are heard in court (except where there is evidence that the property has been voluntarily abandoned)
• Requiring all lenders to demonstrate in court that they have taken reasonable steps to avoid repossession
• Allowing lay representation from approved organisations to make it easier for homeowners to present a defence in court
• Extending the debt relief offered by bankruptcy to some who cannot presently meet bankruptcy criteria by introducing a certificated route into bankruptcy
• Extending the protection currently offered for the family home in bankruptcy and trust deeds

Housing and Communities Minister Alex Neil said:

"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.

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

"Acting on the recommendations of the expert Debt Action Forum and the Repossessions Working Group, I am pleased that this Bill has attracted backing from across the political spectrum.

"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.

"Through the forthcoming Housing Bill and Debt and Family Homes Bill we are committing to giving even more support and protection for those hard pressed families."

The Debt Action Forum and the Repossessions Working Group were set up in January 2009 to examine current information and initiatives on debt relief, debt advice, repossession, and to consider a package of legislative and non-legislative measures to address debt problems.

These groups comprised membership from representatives of the main stakeholder groups including lenders, advisers, insolvency practitioners, public authorities and other experts.

The Bill complements other Government support such as:

• The £35 million Home Owners Support Fund
• The Scottish Legal Aid Board's targeted expenditure of £3 million to improve access to advice
• £1 million to Citizens Advice for its face to face debt advice services
• £250,000 to support those seeking accreditation against the National Standards for Information and advice

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