The team at Scotland’s Trust Deed know that a spiralling debt is often caused by panic and pressure from creditors. The stress of a catalogue company or credit card ringing you several times a day threatening legal action can lead to bad decisions, extra loans and an exacerbation of the problem.
The UK Treasury recently declared a scheme that gives people in debt ‘Breathing Space’ of 60 days. During that time creditors must freeze interest and cease aggressive chasing tactics while the individual seeks advice on how to deal with their financial crisis.
The new project is only available in England and Wales though it is very like one that has existed in Scotland since 2015. There is one disparity which the Citizens Advice Bureau in Scotland has called for an end to.
In the Scottish ‘Moratorium’ Scheme, debtors have only 42 days to sort out their problems and this is unfair, the charity says. A spokesman said that their advisers are dealing with debt cases every day and ‘We welcome this scheme and we want to see its protections being extended to the people of Scotland.’
Debt struggles can lead to depression
For many people in Scotland, debt struggles can lead to depression and anxiety or make an existing mental health conditions worse. Breathing Space acknowledges this and allows those suffering to have extra time and an increased level of support.
A Scottish Moratorium has no such provision for mental health issues and this is also something CAS is keen to rectify.
How will the ‘Breathing Space’ scheme work?
- It will come into force from 2021
- People with financial problems will be safe from the enforcement action of creditors
- Interest on debts will be halted for the 60 days
- Debtors will mental health issues will be entitled to further help while they are receiving treatment
- The range of debts the scheme will cover is extensive
- People on the scheme will need to actively communicate with expert debt advisors in order to get back on the road to financial security.
Speaking with a friendly and experienced debt advisor
This last point is really important since speaking with a friendly and experienced debt advisor offering impartial advice can be inspirational.
The new scheme may yet be taken up in Scotland, in which case Scots who are struggling financially could see the period of 60 days being free of the threat of legal action, bailiffs, fines, interest and constant hounding being of huge help. It’s this breathing space that could allow debtors in Scotland to:
- Categorise their debts into priority and non-priority
- Seek advice from experts
- Apply for Debt Management Schemes and Trust Deeds
- Avoid applications for payday loans and expensive credit cards
- Seek extra work or hours
Potential debt solutions
There is a lot to recommend the introduction of a 60-day period as a perfect time to call the team at Scotland’s Trust Deed for help and advice. If you live in Scotland and are struggling financially, then contact us to learn more about a Scottish trust deed, a debt arrangement scheme or sequestration, among other potential debt solutions.