MSPs have urged the Executive to drop plans which could see debtors lose their homes for owing as little as £1,500.
The provision is contained in the Bankruptcy and Diligence Bill, now going through the Scottish Parliament.
But Holyrood's Enterprise Committee warned: "In our view, it would make no sense for bankruptcy proceedings to cause homelessness. The committee recommends that the Executive ensures that its proposals in this part of the bill are consistent with its policies on tackling homelessness, and to bring about any changes that are necessary."
