Official figures have revealed that after paying their bills, there are around one million Scots living in poverty and the situation is getting worse.
Also, around one in four children are classed as living below the official poverty line, the Scottish government says.
The figures relate to 2014 to 2017 and reveal that every year there are around one million people in Scotland living in poverty. That’s an increase of 30,000 people on the figures between 2002 to 2005.
What this means is that 19% of Scots live in relative poverty after their mortgage or rent has been paid.
Definition of relative poverty
The definition of relative poverty is for someone who receives less than 60% of the median UK income though the threshold varies depending on household size.
For example, a single adult learning less than £9,700 year before their housing costs is considered to be in relative poverty. For a family of two adults and two children, this figure rises to £22,200 a year.
One debt charity in Scotland says that growing numbers of parents are opting to go without meals while they juggle debts and see their health suffering to protect their children from poverty.
However, for people living in Scotland there are various routes to resolving their debt.
For example, they could undertake a trust deed which will see someone in debt repaying what they can afford over an agreed period of time which could be up to 48 months.
Attractions for a trust deed in Scotland
One of the attractions for a trust deed in Scotland is that the debt that remains at the end of this period is considered to be unaffordable and will be written off.
It’s important to appreciate that the trust deed is a legal agreement between the debtor and their lenders.
There’s also a case study on the Scotland’s Trust Deed website which illustrates why a trust deed is a popular choice for those in debt.
In the example, for someone with a debt worth £20,000 they will be repaying at a rate of £520 per month.
With a trust deed in place, this repayment will fall to £200 per month which means that at the end of the agreed period that there will be £15,835 remaining to be written off.
Only an insolvency practitioner can arrange and then administer a trust deed
A trust deed may not suit your circumstances and only an insolvency practitioner can arrange and then administer a trust deed since it’s a legal requirement for them to do so.
The insolvency practitioner effectively acts as the debtor’s trustee and will negotiate with lenders to accept the repayment terms.
It’s also possible to undertake a debt arrangement scheme which runs along similar lines and has been launched by the Scottish government.
Under a debt arrangement scheme, someone in debt will repay all that owe over a longer period of time but at a rate they find affordable. The big difference is that there is no amount of debt remaining at the end of this agreed period to be written off.
Both routes are proving to be popular with people in Scotland and it’s important to seek impartial debt advice to see what can be done to help.
A trust deed and a debt arrangement scheme
For those who are under stress with their debts, both a trust deed and a debt arrangement scheme will see the debtor being protected because their lenders will not be able to take any action against them so long as their monthly repayments are kept up.
It may also be suggested for those people who may not qualify for a trust deed that they look at informal negotiation with their creditors or undertake a debt management plan to help repay what they owe.
There’s also the possibility of debt consolidation and write-off with equity release or remortgaging.
Would you like to know whether you qualify for a trust deed? If so, there’s a simple online debt test available on the Scotland’s Trust Deed website that will give an instant answer and will take just one minute of your time to complete.
Impartial advice from debt advisers
Otherwise, for impartial advice from debt advisers who have lots of experience, then contact Scotland’s Trust Deed today to find out what you can do to resolve your debts.