The debt solution options available in Scotland
It can be a very difficult time when dealing with debts but there are debt solutions available for people living in Scotland.
Among the options that you may be able to consider will depend on what money you may have for repaying debts.
If you do have money, then you’ll need to deal with the urgent debts first.
That’s because some debts are more important than the others are because they carry more serious consequences when you do not pay them. For example, not paying the rent or mortgage could see you losing your home.
Also, if you do have money to pay off a debt then you’ll need to work out the best way of doing this. For example, you can deal with creditors directly, those are the people and firms you owe money to.
Alternatively, you could consider a loan consolidation where you put all of your debts into one loan or you could consider a Scottish trust deed.
Apply for a Scottish trust deed
You’ll need to apply for a Scottish trust deed and there are criteria over who can apply and you’ll need to owe more than £5,000 to do so.
There’s also the debt arrangement scheme, which was created by the Scottish government to help people in Scotland repay their debts.
To some, the Scottish trust deed and the debt arrangement scheme may appear to be very alike, but they have one important distinction.
With a trust deed, a Scot in debt will repay an amount of money every month that they can afford and this will be an arrangement that will last for up to four years.
When this arrangement comes to an end, there will be an amount of debt remaining and this will be written off.
Sign up to the debt arrangement scheme
As with the trust deed, for those who sign up to the debt arrangement scheme, then you will repay an amount of money every month that you can afford but you will repay all of your creditors under the agreement.
There’s also another option for people struggling with debt in Scotland and that is bankruptcy, it’s also known as sequestration, but a lot depends on your financial situation currently and you’ll need to take advice before pursuing this debt solution route.
Indeed, all potential debt solutions have advantages and disadvantages, so you should gather as much information as you can and speak with an impartial adviser before you make a decision.
It’s also important that you do not sign anything unless you believe that the debt solution is the best option for you.
If you are seeking impartial and helpful advice, then there’s a team of advisers at Scotland’s Trust Deed who will be able to help.
If you have no money left for paying debts
They may also discuss, if you have no money left for paying debts, about the prospect of creditors writing off your debt.
They may also highlight the prospect of debt management plans, which is an informal arrangement to repay debt to your creditors.
As mentioned earlier, this advice from the Scotland’s Trust Deed’s debt advisers will be impartial, so you don’t have to follow it though it may help to speak with someone who understands your situation and the potential for resolving debt.
If you would like more information about debt solution options available in Scotland, including the Scottish trust deed and the debt arrangement scheme, then it’s time to contact Scotland’s Trust Deed.
Debts soar as Scots pay for daily essentials
According to one Scottish debt charity, growing numbers of Scots are falling into debt as they struggle to pay for their daily essentials.
The charity says that the average Scot will have £14,300 of unsecured debt to deal with including overdrafts, loans and credit cards.
That’s far more personal debt outstanding than Scots had before the economic crash in 2008.
Also, the charity highlights that the pattern of borrowing has changed radically since then, when borrowers were using credit to buy expensive items such as televisions and cars.
Scots are struggling with unsecured debt
However, today Scots are struggling with unsecured debt because they’re using it for buying essentials such as rent and food and other everyday items.
Their figures highlight that in 2007, Scottish households had debts of £13,300, on average, and this fell to £11,000 in 2013.
They say that by 2021, the figure will reach £15,400.
This is, the charity says in a report, a ‘concerning picture’ with growing numbers of families ‘using loans and credit cards to get by’.
In addition, the Financial Conduct Authority says that around one in six people in the UK are currently in ‘financial distress’.
Struggling to repay or cope with their debt
This means that 4.5 million people are struggling to repay or cope with their debt.
The findings coincide with a report from another debt charity that has calculated that 230,000 children in Scotland are currently living below the poverty line.
The situation could get worse with welfare reforms leading to benefit losses to growing numbers of those who rely on welfare.
If you live in Scotland and are struggling with debts then there are some solutions available that are worth considering.
Among them is a Scottish trust deed which sees a debtor paying their creditors what they can afford for up to 48 months and the amount that is remaining at the end of this period will be written off.
The Debt Arrangement Scheme
There’s also the debt arrangement scheme which sees the debtor paying what they can afford until all of their debts have been repaid.
There are also alternative ways to deal with debt in Scotland, including re-mortgaging, debt consolidation, undertaking a debt management plan or negotiating a full and final settlement with creditors.
There’s a team of experienced debt advisers available at Scotland’s Trust Deed who can offer more advice and talk through what a suitable solution may be.
Not all of these solutions mentioned may be an option and you do not have to follow the advice given by the adviser since its impartial.
However, speaking with someone who understands how to resolve debts may be of great help and their advice may be very helpful.
Also, depending on how much you owe and your current financial situation means that sequestration, or bankruptcy, may also be an option but careful thought needs to be given before proceeding down this route.
Looking for debt advice
If you are looking for debt advice because you are struggling to pay for household essentials, then it will help to speak with the friendly team of debt advisers at Scotland’s Trust Deed.
How Scots can deal with ‘persistent debt’
For people living in Scotland and who are struggling with debts may find that their credit card debt may be holding them back as ‘persistent debt’.
Essentially, if you make a minimum payment on your credit card debt, and have been doing so for a while, then you may have received a letter from the credit card firm stating that you should increase your monthly repayment.
If they have been contacted but haven’t been asked for higher monthly repayments, they may phrase it suggesting that you do so.
That’s because the Financial Conduct Authority says that anyone with a credit card who has been paying more in charges and interest than their balance for at least 18 months should now be looking to increase their credit card payment.
What is persistent debt?
But what is persistent debt? A persistent debt is defined as one where you pay more in charges and interest on your credit card than you have repaid on the amount you borrowed.
Since minimum payments tend to cover only the charges and interest on the debt, only a small part of that payment will actually reduce the balance.
However, by paying more every month you could reduce your balance dramatically and save yourself money at the same time.
It’s important to appreciate that a persistent credit card debt will take a long time to reduce because most of the monthly payment goes to paying the interest on the debt.
Repay your credit card debt
If you want to know how long it will take to repay your credit card debt then there is a minimum payment calculator on the UK Finance website which will show how long this will take.
As an example, one charity says that for someone who has £2,796 on their credit card, a card they are no longer using, then by paying the minimum amount will take them 28 years to pay off the debt.
With the same debt, and paying the minimum amount plus £10 means they could repay that figure in 11 years.
The best way to get out of persistent debt is to understand where you can reduce your outgoings.
This may also help those in debt consider how much they can save towards getting out of their persistent debt situation.
Helpful debt advisers at Scotland’s Trust Deed
It’s at this point you may be need independent and impartial advice and there’s a team of helpful debt advisers at Scotland’s Trust Deed.
They are available to speak with every day and you don’t have to take the advice they give.
During a conversation they may discuss other debt solution options available to those who live in Scotland.
They include a Scottish trust deed, the debt arrangement scheme and sequestration, which is also known as bankruptcy.
Scottish debt solutions
The team at Scotland’s Trust Deed can also help begin the process to access one of the Scottish debt solutions and also discuss other potentials including a debt management plan, informal negotiation as well as debt consolidation and write-off.
For more help and advice about dealing with persistent debt, then it’s time to speak with the helpful team at Scotland’s Trust Deed.
Your steps to become debt free in Scotland
With growing numbers of Scots struggling financially, there may be a need for them to seek help and advice about how to become debt free.
The team of impartial debt advisers at Scotland’s Trust Deed have lots of experience and can offer details about potential debt solutions and this advice is impartial which means you do not have to follow what they recommend.
For people living in Scotland, there are a number of debt solutions available that are not available in the rest of the UK.
Here we will outline what they are and focus on a few, including a Scottish trust deed, bankruptcy and a debt arrangement scheme.
Other articles on the Scotland’s Trust Deed website will also cover writing off debt and undertaking a full or final settlement with creditors.
First step to becoming debt free
The first step to becoming debt free is to seek an impartial debt advice.
There’s no need to pay for this advice and whoever you approach will need to spell out the most suitable way for you to manage and then clear your debts.
Also, there’s no time like the present to seek advice because the sooner you start, the sooner you’ll get back on track financially.
It also needs to be appreciated that of the debt solutions available, you’ll need one that is suitable for your personal circumstances.
If you can reach an informal arrangement with your creditors, then this may be a suitable solution, but otherwise you’ll need to consider a more formal debt resolution process.
The debt arrangement scheme
For people living in Scotland there is a free debt management solution called the debt arrangement scheme.
The big attraction for this is that it enables someone struggling financially to repay debts over a period of time, but this will be at an amount they can afford.
While you are repaying the agreed amount you will be protected from your creditors hassling you and trying to recover money.
As with all solutions there are criteria attached and to be eligible for this scheme you must be based or live in Scotland, have at least one debt and apply using an approved money adviser.
It’s also important to appreciate that the amount that is agreed upon will be decided after you have paid essential bills, including food and other outgoings.
A Scottish trust deed
A Scottish trust deed also enables someone in Scotland who is struggling financially to repay what they can afford, but usually over a three or four-year period.
The deed itself is a voluntary agreement between you and your creditors to repay an agreed amount.
For many of those who undertake a Scottish trust deed, the big attraction is that when this agreed period of repayments ends, the amount that is left will be written off as unaffordable.
Also, the protection will see that no interest is added to the debt and your creditors cannot take you to court.
There’s no doubt that for people living in Scotland and who are struggling with their finances that there are debt solutions available but you need to contact the experts to find out which one is suitable and how to begin the process of repaying debts and becoming financially stable once more.
Debt arrangement scheme or a Scottish trust deed
For more advice about the debt arrangement scheme or a Scottish trust deed, then you should contact the impartial and friendly team at Scotland’s Trust Deed.
Scotland’s debt arrangement scheme – what you need to know
Scotland’s debt arrangement scheme is an innovative solution for Scots to repay their debts in a way that’s easy to manage and at a lower rate.
They also get protection from their creditors, that’s the people they owe money to, and this means they won’t be taken to court.
Essentially, the scheme sees a Scot creating a debt payment programme which is then sent to each of their creditors.
The big attraction for the debt arrangement scheme is that it can be set up for any amount of debt.
That’s not the case for the similar Scottish trust deed which needs a minimum of £5,000 in debt to access.
Also, the debt arrangement scheme can also see someone in debt apply for it, along with their spouse, cohabiting partner or civil partner if they are both liable for one debt, at least between them.
The debt arrangement scheme
For anybody interested in the debt arrangement scheme, then they’ll need to seek advice and an approved person will then make an application on their behalf.
As with all debt repayment programmes there are criteria attached to them so if you can answer yes to these questions, it might be for you:
Do you have enough cash for making regular payments?
It’s important that you have enough money to repay your debts over a reasonable length of time.
This may mean that you have a stable job with money left over every month after paying for essentials (rent/mortgage etc) and other bills.
If benefits are your only income, then this scheme may not be for you.
You do not want to sell your home
If you own your home and have a high level of equity, but don’t want to sell it then this may be a choice for you.
Other solutions for Scots include a protected trust deed and also sequestration, better known as bankruptcy, which may mean you having to sell your home for the equity in it to be released. Equity is the profit you’ve made on the property since you’ve lived in it.
Your job might be at risk from other debt solutions
There are some jobs which could be affected by some debt solutions, including bankruptcy or undertaking a Scottish trust deed.
For example, for those who are working in Scotland’s financial sector and become bankrupt then they are facing the real prospect of dismissal.
It also needs to be appreciated that setting up a trust deed or becoming bankrupt may prevent you from standing for public office and being a company director.
Scots struggling with debts
There’s no doubt that for many Scots struggling with debts, a debt arrangement scheme is an ideal solution and if you would like more help and advice about whether this is the correct route for you, then you should contact the team of experienced debt advisers at Scotland’s Trust Deed for a chat.