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The numbers of Scots struggling with debts has led to a rise in personal insolvencies for the last three months of last year.

The figures from Accountant in Bankruptcy (AiB) reveals that there were 2,691 bankruptcies and trust deeds in that period, a rise on the year before of 2.1%.

When the figures are analysed, the numbers of Scots opting for protected trust deeds grew by 6.9%, and those opting for bankruptcy dropped by 4.2%.

Also, the number of Scots having their debt arrangement scheme application approved grew to 573, which compares with 528 over the last three months of 2016.

AiB says that Scots repaid £9.5 million through the debt arrangement scheme during the last quarter of 2017, slightly down from the previous year’s final quarter figure of £9.6 million.

The number of Scots entering insolvency has been growing

The chairman of the trade body for insolvency practitioners, Tim Cooper, said that the number of Scots entering insolvency has been growing generally since the last quarter of 2015 with the latest increase fitting the overall trend.

He says: “Consumer debt is still rising though at a slower pace while inflation is outpacing wage growth which is leading to pressure on finances.”

He added that fuel is becoming more expensive particularly for Scots in rural places who are rely on their vehicle for transport needs.

One reason why a Scottish trust deed is a popular choice for those who are struggling financially is that it enables someone living in Scotland to write off unaffordable debt.

Essentially, the trust deed sees them repay what they can afford, and this could be over 48 months.

A trust deed is also popular with homeowners

The amount of debt that remains when this period ends is then written off. A trust deed is also popular with homeowners since they should be able to retain their home.

It’s important to appreciate that the trust deed is a legal agreement so there is a contract between the lender and the person struggling in debt.

Should you not be accepted for a trust deed then it is worth looking at a debt arrangement scheme.

There are a number of reasons for doing this including the fact that lenders will be prevented from hassling you when chasing money.

Also, it’s possible to lower your monthly debt repayments under the scheme.

With a trust deed you will be able to repay what you owe

As with a trust deed you will be able to repay what you owe but unlike a trust deed, you will repay everything and there’s no amount remaining to be written off.

The debt arrangement scheme is run by the Scottish government as a way to help people with debt manage their money effectively so they can repay unsecured debts over a longer period and in full.

For anyone considering whether they should undertake a Scottish trust deed or a debt arrangement scheme, then you could do the simple test which is on the Scotland’s Trust Deed website to reveal whether you will qualify for either scheme.

How a Scottish trust deed works

If you would like to know more about how a Scottish trust deed works that it’s time to speak with the friendly team of debt advisers at Scotland’s Trust Deed. They can explain more about trust deeds and also other potential options including a debt arrangement scheme and sequestration, which is better known as bankruptcy.

The team is available every day between 8am and 7pm on (0141) 297 1178.