The Law Commission is currently consulting on its latest piece of draft legislation – the Goods Mortgages Bill. As the name suggests, the proposed legislation enables individuals to use goods they currently own as security for debts. It also regulates the relationship between borrowers, lenders and third parties who may acquire secured assets.
The Bill replaces the current law in this area (contained in the “Bills of Sale Acts”) which is antiquated and needlessly complex. Recently, this area of law has come under scrutiny thanks to the expanding “logbook loan” industry, which involves the making of low-value loans to individuals on the security of their cars. However, there are also examples of higher-value lending over other assets, including furniture, wine and classic cars. Continue reading