It’s been revealed that nearly 90% of tenants in Scotland who are in receipt of Universal Credit have racked up rent arrears.
The news follows a revelation from one council in Scotland that 87% of its UC tenants, it is around 633 people, owe them £525,000.
The figures highlight that people in Scotland are increasingly struggling to cope with their levels of debt and many are now struggling to pay for their housing.
The council concerned says it’s trying to help those who are struggling to repay their debts and avoid losing their home.
Universal Credit is being rolled out currently and is available to a limited number of people and replaces six means-tested benefits including housing benefit.
The result sees claimants receiving all their benefits in one monthly single payment.
Now, for the first time, tenants are responsible for paying their rent to their landlord rather than having it paid directly to them.
The UC system has been dogged by problems
However, the council that has revealed its figures says the UC system has been dogged by a number of problems including delays in tenants receiving payments and also wrong or no payments being made.
Now the council says that the levels of debt will increase as more people are brought under the Universal Credit umbrella.
The findings have been backed by one Scottish Charity which helps people in debt and with housing, and a spokeswoman said: “The big problem facing people is the six-week delay in receiving UC payments which makes it difficult for those who are struggling already and are in poverty.
“This means they can fall into rent arrears, debt and also have to rely on food banks.”
She added a big concern for the charity is that some people may never recover financially from this delay and then face the real prospect of losing their home.
There’s no doubt that growing numbers of Scots are falling into serious debt and putting their homes at risk. This extends to both tenants and homeowners in the country.
Helpful team of debt advisers available to speak with
However, there is help and advice available and there is a helpful team of debt advisers to speak with at Scotland’s Trust Deed, for instance.
As well as discussing the prospects for a trust deed or a debt arrangement scheme, the team can also talk about debt write-off and consolidation as well as informal negotiation and a debt management plan.
It’s also possible to discuss whether sequestration, or bankruptcy, is the best route for Scots struggling with their debts.
As an example, a trust deed is a popular way of dealing with debts and, particularly for homeowners, enables them to retain their home.
Under the scheme, they will need to repay their debts at a rate they can afford for up to 48 months.
At the end of this term, the amount that remains is considered to be unaffordable and will be written off.
A debt arrangement scheme
A debt arrangement scheme works on similar lines and sees the debtor in Scotland repaying what they can afford on a regular basis with them repaying everything to their creditors.
Under both schemes, while the arrangement is kept then their creditors will be prevented from contacting the debtor and adding charges and interest to the amount owed.
For more help and advice about repaying debts or whether to consider a trust deed or a debt arrangement scheme, the helpful team of debt advisers at Scotland’s Trust Deed will be able to help.