ABSTRACT
There seems no better time than the present to consider the protection of a debtor’s home against execution by creditors, whether within or outside of the insolvency system. The sub-prime mortgage crisis and current global economic distress have focused attention on the need to find ways to avoid the adverse consequences of mortgage foreclosures for both debtors and creditors. Unemployment and the rising cost of living have already burdened the social security systems of various countries.1 It may be difficult for governments that have already directed funds towards saving the financial and business sectors of the economy also to address the needs of individual debtors facing possible homelessness as a result of home mortgage foreclosures. Notably, in the United States of America, the then newly elected Barack Obama alluded to this in his ‘victory speech’ delivered on 6 November 2008.2 In the circumstances, as media reports indicate,3 the negative consequences of mortgage foreclosure which lenders also suffer have led financial institutions, in various parts of the world, to renegotiate and revise mortgage loan terms and conditions to allow defaulting debtors to remain in occupation of
1 See Lawless, R.M. et al., ‘Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors’ (2008) 82 American Bankruptcy Law Journal 349 in relation to the position in the United States of America.
