It’s hard to believe but more than 200 Scots will go bankrupt every week in Scotland this year, one accountancy firm is predicting.
The forecast from French Duncan highlights that nearly 12,000 people were sequestered in Scotland last year, that’s the name for bankruptcy in the country, or they took out a protected trust deed.
A Scottish trust deed is a formal arrangement that enables someone in debt to repay what they owe at an affordable rate and the numbers are, the survey reveals, at the highest level in five years.
Now, the accountancy firm is predicting that the same number of people will face a similar fate this year.
Despite favourable interest rates, personal insolvencies have risen steadily in Scotland.
Accumulated debt means Scots will struggle to repay
However, French Duncan says that rising food costs and utility bills, along with stagnant wages and long-term accumulated debt means Scots will struggle to repay these are leading to a growing problem.
Also, a change in someone’s circumstances through a divorce, job loss, or ill-health can also quickly lead to bankruptcy.
A spokeswoman for the firm said: “Though employment is high and many people have low mortgage interest, for thousands of Scots their underlying indebtedness cannot be addressed.
“This debt may have been acquired over several years and they can’t do anything else but pay the interest.”
She added: “A change in circumstances could see them being thrown into a financially precarious situation, such as a slight rise in living costs or a drop in overtime payments.”
Scots are using high interest short term loans
The survey also found that growing numbers of Scots are using high-interest, short term loans to help cover themselves financially but this simply increases their debt level rather than resolving the issue.
The firm’s data highlights that 7,000 protected trust deeds were arranged last year – a 21% increase on the previous year.
There’s no doubt that being in debt can lead to stress and ill-health but for people living in Scotland there are solutions available and the Scotland’s Trust Deed team can help with impartial advice on what to do.
There’s a team of friendly debt advisers available who will offer advice on what the potential solutions are and whether the person calling will be eligible for them.
The news from the accountancy firm comes at a time when many people may be struggling to pay for Christmas and may have gone into debt to buy presents for family and friends but these bills will begin landing and it’s important that for people in debt that they do not ignore the problem.
Along with a Scottish trust deed, Scots can also access a debt arrangement scheme, which runs on similar lines so the debtor can repay what they owe at an amount they can afford. The entire debt will be repaid in this way.
Option of sequestration or bankruptcy
There’s also the option of sequestration, or bankruptcy, which is a serious undertaking and needs careful thought beforehand.
If you would like more help and information about a Scottish trust deed and what the team at Scotland’s Trust Deed can do for you, then it’s time to get in touch on 0141 297 1178.