For those Scots who are struggling with their finances, then a debt arrangement scheme (DAS) may help them pay off what they owe in a manageable way.
Indeed, for many people the repayment plan, which is backed by the Scottish government, offers a credible alternative to both the trust deed and bankruptcy, known as sequestration in Scotland.
While many of us find ourselves in debt, this is often down to circumstances that are beyond our control.
And, as many people who are struggling with debts will know, there are other issues such as ill-health and divorce that can occur because of someone’s finances.
There’s also the issue that when people are trying to deal with a life changing crisis, their growing debt situation will often take second place for things that need dealing with.
However, there are many Scots who will find themselves being made bankrupt when they could be eligible to repay what they owe under a debt arrangement scheme.
Repaying debts in a manageable way
The idea behind the DAS is to help ease the financial burden by repaying debts in a manageable way.
One of the big attractions for undertaking a debt arrangement scheme is that the debtor has ackknowledged they need help and by having a repayment plan they will be able to freeze their creditor’s charges and demands.
There’s also a boost in confidence because the person struggling with debt will know that they will repay what they owe in full.
For those who do not consider a debt arrangement scheme, or even a trust deed, then they may find themselves in a struggle to keep up with their debt repayments, facing increasing costs and still receive threatening letters from creditors.
Now the Scottish government is encouraging Scots to contemplate a DAS as their first option before thinking about insolvency since this route has more serious consequences.
Scots struggling with money
Another important point for Scots struggling with money to appreciate is that you are not alone.
For example, more than 2,239 debt repayment programmes were created under the scheme last year and more than 1,500 of them were completed.
Under the debt arrangement scheme, since 2010 the total amount repaid to creditors is £150 million.
If you live in Scotland and would like more help and advice about the debt arrangement scheme or indeed about any aspect of dealing with debts including a trust deed, then it’s time to speak with the helpful team at Scotland’s Trust Deed.
The debt advisers will be able to explain more about the pros and cons of the DAS as well as a trust deed.
The essential difference between these repayment schemes is that under the DAS the entire amount owed will be repaid while with a trust deed, the debtor will need to repay what they can afford with the remaining debt considered to be unaffordable and then written off.
Route a Scot takes to resolve their debts
However, whichever route a Scot takes to resolve their debts, they will be making a legal agreement between themselves and their lender to keep up with the repayments for the contract to remain valid.
There are also other potential debt solutions for those living in Scotland including debt write-off and consolidation, negotiating an informal settlement and undertaking a debt management plan.
The helpful team of debt advisers at Scotland’s Trust Deed are available every day to speak with to discuss the potential solutions and they have helped lots of Scots already.