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Hi folks, my apologies for being probably the most infrequent blogger on the internet – not enough hours in the day and all that. Thought I’d give an update on some forthcoming changes to legislation in Scotland to do with trust deeds/sequestration for those who are interested.
The Homeowner & Debtor Protection (Scotland) Bill was passed by MSPs a few weeks ago, though is not yet in force. It’s purpose is primarily to try to provide greater protection to people who are in danger of losing their homes. Very briefly, Part 1 of the Bill puts more onus on mortgage lenders to accept reasonable proposals from people in arrears, as well as giving individuals the right to be represented in court by appropriate lay representatives (eg money advisers) and the ability to recall a decree for repossession.
Part 2 is concerned with making a few changes to trust deeds and sequestrations. It will become easier to apply for sequestration – rather than having to wait for a creditor to take legal action, it will be possible to be certified as insolvent by an authorised person (money advisers/insolvency practitioners presumably) and apply on the back of that.
The other main change is that it will, theoretically at least, become possible to set up a protected trust deed but leaving any equity in a person’s dwelling home out of it. Whether creditors will accept such proposals in practice remains to be seen, but at least it will be possible to try. I think what will probably happen will be that creditors will allow a certain amount of equity to be ignored (£5000? / £10000?) but may object to proposals if a larger amount of equity is being ignored. However, we will see how this pans out…
There may be other changes on the horizon for trust deeds too as a working party has been set up to look more closely at trust deeds and to investigate ways of improving them, for those in debt and for creditors. Will be interesting to see what happens so watch this space!Tags: Equity, homeowner and debtor protection, protected trust deed, trust deeds, working party