Scots struggling with debt – don’t worry alone!
If you are living in Scotland and struggling with debt it’s important you do not worry alone and seek advice as soon as possible to resolve your situation.
There is help available from charities and local authorities and it’s also possible to speak with experienced debt advisers at Scotland’s Trust Deed to see what potential solutions are available.
Also, the advice from Scotland’s Trust Deed is impartial which means you will find it helpful and you do not have to follow it.
All debt advisers in Scotland will take some details to understand fully your current financial predicament and then use their experience to offer a solution.
A debt management plan
This may include a debt management plan to help you budget effectively to repay debts.
It’s also possible if you can afford to repay creditors, those are the people and organisations you owe money to, that they may consider a temporary repayment plan. This will see you make a small payment as a token towards your debts and shows you are willing to deal with them.
Some people living in Scotland may look debt consolidation so you could take out one big loan and repay all of the debts with this money. For those with a debt problem this could be a risky solution and advice will be needed.
It’s also possible for homeowners to remortgage to provide the money to repay debts but there are other options before you should consider remortgaging. Some may also be considering equity release to free up money from their home but again you need to speak to someone for advice first.
Before we discuss popular debt solutions in Scotland, we should mention sequestration, which is also known as bankruptcy.
This is a serious step to take and will not be available to everyone, particularly if you can afford to keep paying your monthly debt repayments.
Scottish government-run debt arrangement scheme
Alternatively, for those living in Scotland, there’s access to the Scottish government-run debt arrangement scheme so you will repay your debts using a debt payment programme.
This will see you making just one monthly, or weekly, repayment to your creditors.
A big attraction for the debt arrangement scheme is that once the debt payment programme is in place, then creditors cannot take any action against you.
There’s also the option of a trust deed and again it’s only available to people living in Scotland.
Under a trust deed, you will sign a legally binding agreement to repay your debts over an agreed period, usually up to four years.
If you maintain your monthly repayment plan then the debt that remains at the end of four years is written off.
Seek impartial advice before committing to a trust deed
While this may appear to be an ideal solution you should seek impartial advice before committing to a trust deed.
This may mean speaking with the experienced debt advisers working with Scotland’s Trust Deed who will offer impartial help and advice which you will find helpful and you do not have to follow their recommendations.
Again, the debt advisers will be able to discuss all of the debt solutions mentioned in this article and offer a tailored solution to meet your own specific needs. If you simply want to find out what help is available without speaking to anyone, then there’s a debt test on the Scotland’s Trust Deed’s website which will highlight all of the potential debt solutions for your situation and it takes just a minute to complete.
While you may not be eligible for a trust deed, there will be a debt solution available so you can get into better financial health.
Help and advice about dealing with debts in Scotland
For more help and advice about dealing with debts in Scotland it’s important to act sooner rather than later and speak with someone who can help – the Scotland’s Trust Deed debt advisers are available to speak with every day.
After paying their bills a million Scots live in poverty
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.
How Scots can get out of debt in 2018
If you live in Scotland and are looking to get out of debt in 2018 then these tips and advice may help you.
Here at Scotland’s Trust Deed we have years of experience and our friendly debt advisers are experienced in helping people like you resolve their difficult financial situation.
There’s no doubt that it can be a crippling issue being in debt and the bills will not stop landing on your doormat but if you are struggling financially to cope there is help available.
It’s also true that around 8 million people regularly miss paying their bills in the UK or are feeling overwhelmed by debt.
Despite this fact, just one in five of us decide to seek debt advice.
One money organisation says around 10% of the population could be dealing with serious money problems in silence with those having large families, single parents and young adults who rent their homes being at higher risk.
Tips to help you get out of debt
So, here are some tips to help you get out of debt.
Step one: Understand your position
You need to be honest with yourself so get together every statement from your bank, credit cards, store cards and loans and work out how much you really do owe.
You need to calculate what the monthly repayments need to be and how much interest you are paying.
For many people who have never checked their overall debt situation this can be a sobering moment. The amount they need to pay every month just to service their debt can be huge.
Step two: Prepare a budget
It’s not just about preparing a budget to help you get out of debt but being prepared to stick to it.
You will need to list all of your income and outgoings with the essential bills such as your mortgage or rent, council tax and energy bills being top of the list because these must be paid.
You also need to work out how much you spend travelling to work and how much you spend on food.
Obviously, there will be other bills such as the telephone and Internet, clothing, insurances, holidays and birthdays.
This is where you need to reduce your outgoings so see what you can do without and the money saved can help to pay off your debt.
Step three: Focus on expensive debt
As part of your preparations, you will appreciate that some debts have a higher rate of interest than others. These debts are costing you the most and these need to be dealt with as a priority.
It’s also important that you do not run the risk of late payment fees on these debts which will make it even more expensive.
Step four: Switch debt
Now you’ve seen which are the expensive debts, is it possible to switch this debt to another provider or type?
For example, in the UK we owe more than £63 billion on credit cards, that’s around £2,500 per household, and with a £2,000 balance it will take around 26 years to clear with an APR of 18.9%.
However, if you switch that credit card bill to another provider offering a 0% balance transfer deal then the debt can be cleared in 43 months by paying them £48 per month.
Step five: Over pay bills
Another easy trick is to overpay your minimum repayment every month which will pay down the debt more quickly.
It’s also important that you stop building up more debt and learn to live within your means.
Essentially, if you can’t afford to buy something then don’t do it.
if you are looking for impartial debt advice then it will be worthwhile speaking with the friendly debt advisers at Scotland’s Trust Deed who have the experience to help and can offer advice about a trust deed, which is only available to people living in Scotland to repay debt, and also on the debt arrangement scheme and sequestration, which is another name for bankruptcy.
The Scotland’s Trust Deed’s debt advisers are available to speak with every day and there’s an online debt test to see what potential solutions are available for people living in Scotland and struggling with their debts.
Problem debt is now at ‘epidemic levels’
The issue of problem debt is growing and has risen to epidemic levels, says the Archbishop of Canterbury.
The Most Rev Justin Welby says that when those in debt contacted one debt charity their total debt is equal to 96% of their annual household income.
He highlights that last year many financial institutions were flagging up issues over consumer borrowing levels and the potential problems this will bring to people already struggling with debt.
The Archbishop says: “Problem debt is at epidemic levels.”
Problem debt has a big impact on the lifestyles of those struggling
The debt charity says that problem debt has a big impact on the lifestyles of those struggling with 37% of their clients saying they were afraid to leave their home.
Also, 73% admitted they were too scared to answer their telephone and 60% said they were afraid to answer the door.
The charity also highlights that along with financial difficulty, there are issues with isolation since those in debt are unable to afford the cost of travelling to social events or to meet friends for meals.
They add that the pressure from creditors hassling those in debt also leads to deteriorating mental health.
The charity’s chief executive said: “Debt touches all areas of life from health, relationships, children’s welfare and housing.”
Struggling with debt and living in Scotland
For those who are struggling with debt and living in Scotland, there are a number of solutions available. The better known ones include a trust deed and a debt arrangement scheme.
While these two debt solutions for Scots are fairly similar, the big difference is that under the debt arrangement scheme they will repay everything.
For those who sign up to a Scottish trust deed, then the amount of debt that may be remaining when the agreed period ends will be written off.
There is a helpful team of debt advisers available at Scotland’s Trust Deed and they can discuss the pros and cons of a trust deed and a debt arrangement scheme.
Discuss the potential of a debt management plan
It may also pay to discuss the potential of a debt management plan, debt write-off and consolidation and also informal negotiation.
There’s also an online debt test at the Scotland’s Trust Deed website so someone who is living in Scotland and looking for answers to resolve their debt problems can find out instantly whether there’s a potential solution available.
‘Financial shocks’ help plunge people into debt
It can happen to any of us and that’s when a financial shock, such as redundancy or divorce, will help lead people into a debt crisis, one debt charity warns.
They highlight that those who are aged under 25 are particularly prone to financial issues caused by poor budgeting while for most age groups, a lack of money rather than poor budgeting will plunge them into the red.
A spokesman for the charity said: “It’s easy to look at the statistics and then fail to see the human face of having problem debt.
“It’s a problem that is far from resolved and the prospect of higher interest rates in future means it’s a mistake to believe there is a gradual improvement for the wider economy.”
Figures for debt in Scotland
The charity has also published figures to highlight that personal insolvencies have risen for two years running and their figures for debt in Scotland, where there is a different system, highlight that in the final quarter of 2017, there were 2,691 individual insolvencies.
Compared to the same period in the year before, that is a 2.1% rise.
Of those asking for help, 21% were single parents with children even though this group makes up 6% of all UK households.
The charity says that tenants are also more than likely to seek financial guidance with four in five of them being tenants though they only account for one in three UK households.
The charity says that two in five have arrears for the debts that are considered to be a priority, for example council tax.
For people living in Scotland there are routes to resolve debt problems
For people living in Scotland there are various routes to resolve debt problems and there’s a helpful team of debt advisers at Scotland’s Trust Deed.
They can offer help and advice on issues such as a Scottish trust deed or a debt arrangement scheme which is run by the Scottish government.
Under a debt arrangement scheme (DAS), which is only available to people living in Scotland, it’s possible to reduce your monthly debt repayments to an amount that you can easily afford.
The repayment period for debts will also be extended over a longer period and you will repay all that you owe to creditors, that is an organisation or someone you owe money to.
This is a rather different arrangement to a trust deed which sees an amount of the debt being written off when the agreed period comes to an end.
Big attractions for the debt arrangement scheme
One of the big attractions for the debt arrangement scheme, and also a trust deed, is that lenders will be prevented from hassling you and you will enjoy legal protection.
If you live in Scotland and are struggling with debt, then Scotland’s Trust Deed have an online debt calculator available to highlight what the potential debt solutions might be for your circumstances and their debt advisers are available to speak with daily.