SFHA seeking views on debt recovery regulations
The Bankruptcy and Diligence (Scotland) Bill passed Scottish Parliament in June 2024.
The Bankruptcy and Diligence (Scotland) Bill passed Scottish Parliament in June 2024 – this Bill commits to a moratorium on debt recovery action by creditors against people who have a mental illness. The draft Mental Health Moratorium regulations recently published define the details of that commitment.
The proposed moratorium is on debt recovery action relating to debts accrued before a mental health moratorium application is made on behalf of individuals in acute mental health crisis: the mental health criteria is strictly defined in the proposals.
The proposed mental health moratorium would not cover debts incurred after the moratorium application is submitted: meaning the individual should continue to pay their ongoing liabilities (including ongoing rent payments, for example) during their moratorium. Under the proposed regulations, creditors would not be able to take enforcement action or instruct any other agents or debtors to take enforcement action against debts incurred before the mental health moratorium is applied—including, for example, rent arrears accrued before a mental health moratorium is initiated. This activity would be prohibited for the duration of the moratorium. Protection against eviction is not included in the proposed moratorium regulations.
SFHA has met with the Accountants in Bankruptcy Team leading the consultation and will submit a further response on behalf of members to represent views. The consultation is open until March 17.
A copy of the slideshow that was presented at the recent SFHA Housing Management forum is available for download. The slides present a brief overview of the proposals and SFHA’s key considerations for response.
To discuss or share your views, please email Annabel at apidgeon@sfha.co.uk. Thank you!
The online consultation and more information is available at the Scottish Government website: https://www.gov.scot/publications/draft-debt-recovery-mental-health-moratorium-scotland-regulations-consultation/pages/4/ .