Government shelves bill to cut '19th century red tape' around logbook loans


16/05/2018

The Law Society Gazette

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The government has announced that it will not proceed with a bill that would have provided more time for vulnerable people taking out 'logbook loans' to seek debt advice and avoid paying hundreds of pounds in court fees. The Law Commission, which drafted the Goods Mortgages Bill, said the news was 'disappointing'. Bills of sale enable individuals to use goods they already own as security for loans while retaining possession of those goods. They are found in 'logbook loans', where a borrower grants security over their car or van. The borrower may continue to drive the vehicle so long as they keep up repayments: if they default, the vehicle can be repossessed. Bills of sale are governed by the 1878 and 1882 Bills of Sale acts. Last year the commission recommended repealing the acts. Law commissioner Stephen Lewis said at the time that borrowers were not protected and lenders had extra costs because of '19th century red tape'.