The new Goods Mortgage Bill has been revised by the Law Commission, allowing individuals, sole trader and partnerships to have more flexibility in the way in which they secure their debts.
The new Goods Mortgage Bill will replace bills of sale, the way in which individuals and businesses could use goods which they currently own to secure debt – whilst retaining the possession of said goods.
The Bills of Sale Acts (1987 and 1982) currently govern the area is now outdated and cause problems for lenders, borrowers and third parties alike.
The new legislation is set to impose fewer personal burden upon lenders, as well as granting more protection to borrowers and third party purchasers.
Opportunities proposed include high net worth individuals would be able to use a goods mortgage to secure a guarantee and would be able to secure running-account credit, such as an overdraft or revolving facilities made up to a specified credit limit.
The new bill will tackle the current problems regarding the registration of bills of sale. This is due to the complex, expensive process that currently stands. The Law Commission prioritises the simplification of registration as a key aim of the reform – this is expected to be welcomed by all parties.