Thursday 27 October 2016

Overwhelming unmet need for specialist personal insolvency advice in Scotland: update on the work of the Personal Insolvency Law Unit at GLC

Here, Alan McIntosh, Project Manager of Govan Law Centre's (GLC) Personal Insolvency Law Unit provides a brief update on some of the innovative work of our new service.

Over the last few months we have found that there is a overwhelming unmet need for specialist advice and support for clients in Protected Trust Deeds (PTDs) and who are bankrupt in Scotland. It has found many debtors are failing to obtain appropriate advice and representation in relation to:
  • Protecting their homes in PTDs and Bankruptcy; and
  • Obtaining advice and representation when their PTDs are at risk of failing.
The majority of cases that our specialised Personal Insolvency Law Unit has been dealing with have involved the debtor’s home when they have been threatened with being sold. Sometimes this has been as creditors have made the debtor bankrupt, but increasingly also involves cases where debtors have sought advice from advice services, like Citizen Advice Bureaux and insolvency practitioners and entered into solutions on their advice.

In one case Renfrewshire Law Centre working alongside with GLC's Personal Insolvency Law Unit, was able to make an offer of composition which was accepted by creditors, after an application to eject the debtors from their home had been in front of the sheriff for over a year. The PTD had been granted almost ten years earlier, despite initially only being expected to last three years.

Alan McIntosh, Project Manager
The problem with this case was when it was signed the proposal was that the debtor would not deal with the property to the end of the Protected Trust Deed, at which point they could re-mortgage. However, in that time the credit crunch occurred and clients were not able to re-mortgage, meaning despite continuing to pay their mortgage they lived with the threat of losing their home over that period.
In a similar case, granted around the same time, the £27,321 of debt the client granted the Trust Deed for grew to £52,507, due to statutory interest of 8% per annum being added. The case is still ongoing, however, when the client signed the Trust Deed he was advised he could re-mortgage at the end of the three years, but was not able to. Since then, with three children still living in the home, the mother of the family has passed away.
Another cases involved a client who had been referred onto an insolvency practitioner by a Citizen Advice Bureaux, in 2010, after the credit crunch, with the proposal being that the client could re-mortgage at the end of the Protected Trust Deed and deal with their equity then. The Trustee is now raising court action to sell the home, as the client has predictably struggled to re-mortgage in the current financial environment and with the credit rating they now have.

There have been other successes, however, with some lenders being prepared to show forbearance to debtors when the client’s circumstances have been explained, including that there have been disability issues in the family. However, even when these lenders are majority lenders in the bankruptcy, this has not always provided a solution and there is a number of on-going issues in such cases relating to technical procedural matters, that may still prevent a satisfactory solution being found.

The reality is personal insolvency law in Scotland is extremely complex and many debtors who are now trapped in solutions are struggling to source the specialist help they require to provide them with advice and assistance. Nearly all of Scotland’s free sector advice services are designed to advise clients on how to enter into bankruptcy and protected trust deeds, often with as we have found disastrous consequences, but there are no specialist services available to help people when things go wrong.
We aim to publish an interim report on our findings, based on our case work and relevant empirical evidence.  In the short time our Unit has been operating, it is clear there is a dearth of specialised advice available to clients who are in personal insolvency solutions, despite the serious consequences it can have for clients, risking their homes, often after they believed they had received best advice by people that should have been helping them.  

Sadly, all too often the initial advice given to clients was wrong, not impartial and the administration of the case has been flawed and contributed significantly to the risk of the case failing or the debtor losing their home.


Wednesday 26 October 2016

Report on Glasgow's 'Rights Hubs': helping homeless people in times of crisis

Our 'Rights Hubs' are a joint initiative with Glasgow City Council welfare rights services and Govan Law Centre. We target some of Glasgow’s most vulnerable citizens who need urgent crisis intervention because they are sleeping rough or at risk of homelessness. We have published a short report about our work here (opens as PDF).

We provide our services in Glasgow City Mission and The Marie Trust in alternative weeks. We have held over 42 hubs so far, that's 168 hours of legal and welfare rights services to 263 people. At least 90% of people who come and see us get accommodated, everyone gets a benefit check and we have increased the incomes of around 250 people. This is a real difference to people's lives. 

This is a model of legal advice we have been developing for some time. Govan Law Centre has long believed it is not enough to wait for people to come to us. We need to go to them. We are continuing to look at ways to ensure our rights hubs can expand and improve. Our experience is that by providing a holistic package of services - welfare rights, financial inclusion, financial capability, money advice and housing and homelessness advice with full qualified solicitor services  at the first point of engagement - we are able to do so much more for people who really need our assistance.

These hubs have had a significant positive impact and improved the outcomes for hundreds of people in Glasgow. We hope this short report explains the work we do and gives you a flavour of the impact we are making.

Monday 10 October 2016

On World Homeless Day we call on the Scottish Government to ensure homeless people know their statutory rights

It's one of the best kept secret in Scotland: housing options interviews are routinely used to deny homeless people their statutory rights.
Housing options interviews are provided when a person presents to a local authority's homelessness service. This is usually the initial interview the applicant receives instead of being offered a full statutory homelessness assessment.
This creates a false sense of security in terms of homelessness statistics in Scotland and provides statistics that don't represent the true extent of homelessness in Scotland. It gives a false impression that homelessness is decreasing as a result of housing options.    
The reality is that the true extent of homelessness is hidden by the use of housing options, and homeless people are being diverted from being properly assessed as homeless under the Housing (Scotland) Act 1987.
Councils in Scotland are telling homeless people to stay where they are; in unsatisfactory and inadequate housing, sleeping on a friends couch, and staying in situations that put them at risk of harm or exploitation. In other words, to go away while other options are considered.
The point is that a homeless person and their family have the right to be re-housed now! That statutory right should be implemented, and also recorded as homelessness statistics. 
The Scottish Government must act now. Govan Law Centre have been warning about these practices for years.

We need a new drive to enforce peoples rights and end homelessness in Scotland.  We are calling for the use of ‘Housing Options Interviews’ to be clearly set out in the statutory Scottish Code of Guidance on Homelessness. For all people to be given a statement of their statutory rights in the same way that you are with consumer protection rights or public health warnings:

"You have a right to a full homeless assessment. This housing options interview does not effect your statutory rights to a homeless assessment. Your housing options interview will help you look at all your housing options and what other support we might be able to offer you. However, you can make a homeless application and have the right to be treated as an homeless person, with a full assessment, and offered at the very least temporary accommodation while we assess your claim for entitlement to permanent accommodation"