Scotland’s personal insolvency rates go up
To help highlight how many Scots are struggling with debts, it has been revealed that there has been a 20.6% increase in the number of Scots going through the insolvency process in Scotland.
That equates to 12,788 extra people opting on this route to help solve their financial problems.
The figures, from the Accountant in Bankruptcy, relate to personal debt and include both sequestration and protected trust deeds in 2018 and 2019. The biggest increase has been in the type of protected trust deeds that the team at Scotland’s Trust Deed specialise in.
What is a Trust Deed?
A trust deed is a financial solution for people who would prefer to avoid the impact that full sequestration can have on their lives and this year there was a 32.8% increase in the number of people taking this option.
Your trust deed will be an official agreement between you and the creditors you owe money to. Scotland’s Trust Deed will negotiate with your creditors on your behalf and if successful your trust deed will become ‘protected’.
Protected status means that you will pay a significantly reduced figure over four years. Keeping up with the payments negotiated will ensure that no creditor is permitted to chase you for payment or make threats about taking the matter to court.
Scotland’s Trust Deed is also experienced in providing qualifying customers with Debt Payment Plans (DPP) that may lead to Debt Arrangement Schemes (DAS). These too have seen an increase with 2,544 agreed in the 2018/19 financial year – that’s 226 more.
The data that the Accountant in Bankruptcy has collected shows a consistent increase in personal insolvency over the past three years. This makes for alarming reading, but the figures aren’t as high as the insolvency increases in the years 2007/8 and 2013/14. Periods of uncertainty lead to higher rates of unmanageable of debt.
According to Scotland’s business minister, Jamie Hepburn, he says the current insolvency figures are down to uncertainty around Brexit and the ongoing issues with Universal Credit.
Mr Hepburn also said that he is pleased that the Debt Arrangement Scheme, which Scotland’s Trust Deed can help with, is being used by people in trouble with debt.
He said they provide ‘controlled repayment of debt without fear of further recovery action being taken’.
Trust deeds and the DAS are becoming the preferred choice for Scottish people fighting their way out of debt. They allow debtors to keep their homes and don’t threaten positions as the Director of a company or within certain careers. Sequestration truly is the last resort and should be given careful thought.
Do you live in Scotland and have your debts become a struggle to finance? Are you looking for a solution to your financial problems? Then contact the team at Scotland’s Trust Deed today for support and advice.
Why Scots in debt should avoid payday lenders
Payday lenders will offer what appears to be a quick cash solution but here at Scotland’s Trust Deed, we strongly recommend avoiding them as we all too often see the consequences of borrowing from these loan companies which may lead to serious debt problems.
Astronomical interest rates, high charges, a lack of empathy and the deliberate targeting of people on low incomes are the modus operandi of the majority of the ‘short term loan’ companies.
And now it appears from research carried out by one debt charity, that families in Scotland who are struggling to pay for new school uniforms have become the focus of payday loan marketing. ‘Advice’ on how to meet ‘unexpected school costs’ has appeared on the websites of several unscrupulous lenders.
It’s a difficult time of year for low income families. The summer holidays see the free school meals and childcare that school provide taken away. Extra money must be found for food, new school uniform, equipment and entertainment. At the same time the child free hours needed to do the overtime to pay for it disappear.
Financial worry and stress that parents must be under
The financial worry and stress that parents must be under to even consider the terms for a short loan means we would urge them to pause before turning to payday lenders who will charge an incredible 1,333% APR interest on some loans.
To put that into context, a loan of £200 – the average cost of a new school uniform – over six months will cost £387. That’s a lot of money.
And if the customer defaults or pays late, the charges, interest and vicious circle of debt can rapidly spiral out of control.
Wonga, a payday lender who faced accusations that it was toxic and immoral, collapsed under the weight of public outrage.
When asked for comment about the rates of interest being charged, only one payday lender was prepared to speak out and they said: “The interest rates reflect the risk of unsecured lending.”
It is a risk these companies are happy to take as they know they will gain further income from charges, re-financing and interest.
Knowledgeable team at Scotland’s Trust Deed
The friendly, knowledgeable team at Scotland’s Trust Deed have years of experience in helping clients with debt problems. We advise and help with creditors and then support you to make better financial decisions in future.
This has to be a better option than a quick fix loan that will only lead to further debt so contact Scotland’s Trust Deed’s friendly debt advisors today to see how they can help you become financially stable again.
Growing numbers of Scots in debt go bankrupt
Growing numbers of Scots are going bankrupt in the country, official figures reveal.
Personal insolvencies in Scotland have grown for four consecutive years and last year grew by 300 to reach 3,520.
There’s been an 18.6% rise in protected trust deeds while traditional bankruptcy numbers fell by 5.1%.
The figures have been published by Accountant in Bankruptcy (AiB) who say that Scots repaid £9.3 million between April and June using debt repayment schemes.
A spokeswoman for AiB said: “Personal insolvency numbers have been on the rise generally in Scotland for four years and this further rise confirms that trend.
“Above inflation wage increases recently haven’t been enough to help many in debt keep up with repayments.”
Friendly advisers at Scotland’s Trust Deed
For those who live in Scotland and would like help in dealing with their debts there are a number of organisations to contact for advice and there’s a team of friendly advisers at Scotland’s Trust Deed.
Among the issues they can discuss confidentially will be the prospect of using a Scottish trust deed to repay debts at a lower rate.
This makes the process more affordable for those who are struggling financially and so long as the debtor keeps up the repayments for an agreed period of time, then the amount that is remaining at the end is written off as unaffordable debt.
It’s also important to appreciate that the advisers at Scotland’s Trust Deed will offer advice that you do not have to follow.
The advice may also cover the prospect of the Scottish Government’s debt arrangement scheme.
Again, it’s an attractive solution since someone in debt can repay at a lower rate but all of the debt will be paid back.
Potential debt solution opportunity
Another potential debt solution opportunity is bankruptcy but this needs to be considered carefully before someone who is struggling financially decides it’s the best solution for them.
Indeed, there’s a lot to consider when dealing with debts in Scotland and seeking advice is always the best first step to becoming debt free.
The debt advisers at Scotland’s Trust Deed are available every day to discuss your financial issues and along with the three solutions mentioned here, they may also offer advice on a debt management plan, remortgaging and even how to conduct an informal negotiation before agreeing to a full and final settlement of debts.
It’s also important for those who consider a trust deed that this is a legal agreement that needs to be honoured and the debt arrangement scheme offers an affordable route to becoming debt free.
Information about a Scottish trust deed
If you live in Scotland would like more information about a Scottish trust deed, a debt arrangement scheme or bankruptcy, then you should contact the advisors at Scotland’s Trust Deed.
Scots increasingly clearing debts
While there are still big issues with the number of Scots struggling with debts, official figures show more of us are using pay rises to clear debt.
Also, more Scots are able to save after wages grew last year, Scottish government figures reveal.
However, there’s not been a rise in consumer spending which means Scots are either saving or clearing debts, financial experts say.
The figures also show that many people in Scotland are having to borrow cash to sustain their spending levels so are falling further in debt.
The figures cover the first quarter of 2019 and for those who live in Scotland and want to become debt free, there are several routes to enjoy this.
Debt advisers at Scotland’s Trust Deed
The first step is to speak with the experienced debt advisers at Scotland’s Trust Deed who can discuss the potential routes to clearing debts. They include:
- A trust deed
- Sequestration (or bankruptcy)
- A debt arrangement scheme
All of these have various criteria and not everyone will qualify for a Scottish trust deed.
Under a trust deed, someone who is in debt in Scotland can write off their unaffordable debt after making repayments over 48 months.
Essentially, they will be paying back what they can afford and the amount that remains is then written off.
For those who own their home, this is a way of keeping their property though equity release may be necessary.
Scottish trust deed
A Scottish trust deed works along similar lines but there is no debt to be written off since the entire amount owed is repaid over a period of time.
For those who want to write off their debts, then sequestration is an opportunity for doing this but it needs careful thought because the ramifications can be serious.
There’s a lot to consider when dealing with debt and the experts at Scotland’s Trust Deed can help and also offer advice on:
- Debt consolidation
- Debt management plans
- Informal negotiations
- Full and final settlement
- Remortgaging and equity release.
For more help and advice for any Scot interested in clearing their debts, then it’s time to contact the experts at Scotland’s Trust Deed.
Why people in Scotland are struggling with debts
Citizens of the city of Dundee have the highest levels of personal debt in Scotland according to the latest research results.
£20,000 is the staggering amount of the average debt – that’s an astonishing amount of money and it is easy to see why people are struggling and becoming desperate.
Financial experts are blaming the heavily criticised Universal Credit System and the low amount of wages in the city.
In comparison, the average personal debt for the rest of Scotland is £17,600. That’s still a worrying amount. The figures have been released by Creditfix, a personal insolvency company.
Scotland’s Trust Deed see the repercussions of debt
Scotland’s Trust Deed regularly see the repercussions of this level of debt and we are adept at helping our customers get themselves back onto a strong financial footing.
The summer holidays can often be a time when families find themselves getting into even more debt. Six weeks without access to free school meals and the pressure to entertain the children and ‘make memories’ forces cash-strapped parents to turn to credit cards to get by.
To counter the alarming level of debt in Dundee, one charity has introduced a service for the people who are in financial hardship.
The operations head has reported that between December and June last year, the increase in the average amount of their customer’s personal debt had risen to over £1,000.
Increase in debt
So, who and what is to blame for the increase in debt over those six months?
- The cost of Christmas (another source of pressure for families)
- Universal Credit and all the issues that it has created
- A rise in the cost of living
- Consistently low incomes.
Scotland’s Trust Deed recently published a blog about the 47% of people who are in work but who run out of money by the end of the month at least once a year.
In the same survey that we quoted in that blog found that 25% of Scottish people are finding it increasingly difficult to survive on their existing pay packet.
Sadly, in the current climate these trends are likely to continue which is why Scotland’s Trust Deed strongly advises against turning to pay day loans or high interest credit cards to manage the shortfall.
Universal Credit is proving to be a challenge to the people who have been placed into the system and if you find yourself in a position where you are no longer able to manage financially due to Universal Credit, contact your local Jobcentre Plus. They have measures in place to support people who are being forced to wait too long for their first payment.
Help and advice about debt in Scotland
For more help and advice about debt in Scotland and ways to resolve it then contact the friendly debt advisers at Scotland’s Trust Deed.