THERE'S been a steady resurgence in debt enforcement activity this month as Scotland moved beyond the level zero Covid-19 rules.

This trend can only continue to grow and it's a big issue for Glasgow.

One particular concern is the dusting down of old unsecured personal loans with eye watering rates of interest.

If you're a homeowner, the creditor may ultimately have its sights on making you homeless to access the equity in your home.

Often, they will play the long game; and the debt may have been sold on to a third-party company.

The best advice is don't ignore consumer credit loans in default.

Don't just allow decree to pass against you at court.

And don't send off an application for a time to pay direction without seeking advice first.

You can get free advice in Scotland from www.debtnavigator.scot

Here's an example of what can go horribly wrong.

Anne (not her real name) is a homeowner and took out a £5000 loan over a five-year period in 2007 with an interest rate of 42% per annum.

She was in insecure employment at the time and her job came to an end shortly after taking out the loan. She fell ill and was unable to make the monthly payments.

By the time Anne was taken to court a few years later she owed £7000 plus interest. She sent a time to pay direction to court herself and decree passed by instalments plus contractual interest of 42% per annum.

Fast forward to 2021 and the sum due is now £50,000.

The creditor had previously registered an inhibition - which means you can't sell your home.

This is a rock and a hard place. If you don't enter into a payment agreement the creditor can look to make you bankrupt.

If that happens the trustee in bankruptcy has a duty to realise assets to settle debts - which means you can lose your home.

Alternatively, you have to pay off the £50,000 - which continues to grow by the day.

Under Coronavirus legislation you can always seek a debt moratorium which gives you a breathing space of six months without debt enforcement. However, from the end of September you can only do this once in any 12-month period.

In other words, you can only put off difficult cases so long.

It seems incredible that a creditor can continue to enjoy 42% annual interest on a debt when the Bank of England's base interest rate is 0.1%. It's quite the bonanza.

Most personal loan agreements contain a clause in the small print that says contractual interest can be applied "after as well as before any judgment". That is legally significant.

In 2001, the House of Lords ruled in Director General of Fair Trading v. First National Bank plc that such clauses were not unfair in law. For Scotland, that principle had already been the law since the 1982 from Bank of Scotland v Davis.

In our example, Anne had submitted a time to pay application under the 1987 Debtors (Scotland) Act. What she should have done was submit a time order application under section 129 of the 1974 Consumer Credit Act seeking a variation of her interest rate under section 136 of that Act.

The good news is that for any consumer credit loan taken out on or after 6 April 2007 these are subject to the "unfair relationships" test in section 140A and 140B of the 1974 Act.

The unfair relationships test requires a customer's credit agreement and the way it's enforced to be fair. It covers anything done or not done by the lender before or after the agreement is made. There's no definition of "unfair" in the Act, so fairness is a wide principle.

In Anne's case, there may be a good argument that the creditor should never have lent money at such a high rate of interest as it was never affordable and sustainable given her lack of job security.

They ought to have performed a proper affordability assessment by looking at all of her personal financial circumstances.

Despite the years that have passed, it should still be possible to complain to her creditor that the loan was unaffordable and argue that she has suffered unfair hardship.

If a lender doesn't respond timeously - within the eight-week statutory period - or refuses to reduce sums due, a debtor can complain to the Financial Ombudsman Service (FOS).

The FOS has wide powers to alter sums due under credit agreements and determines cases on a "fair and reasonable in all of the circumstances" test.

If the FOS can't provide an adequate remedy, it would still be open to a consumer to apply to the sheriff court seeking an unfair relationships order.