What is a debt management plan?
When a client comes to us with financial worries, Scotland’s Trust Deed will offer them several solutions. Each of these, if chosen, will be fully managed by us and we will support you every step of the way.
A member of our knowledgeable and experienced team will take the time to discuss your circumstances and together we will discover the right option for you and your family.
Many of our customers fear that sequestration (or bankruptcy as most people know it) is the only option. At Scotland’s Trust Deed we see that as a last resort.
Potential solutions to your debt crisis
One of the potential solutions to your debt crisis will be a Debt Management Plan (DMP). A DMP will see Scotland’s Trust Deed acting as you DMP provider. We will:
- Work out how much spare money you have, after paying essential bills and expenses, that can be used to pay off your debts
- Discuss your case with your creditors
- Set up an arrangement with the companies/people to whom you owe money
- Receive your single monthly payment
- Split your payment fairly across each of the creditors you owe money to.
A DMP only concerns ‘non-priority’ debts which means you will have to handle your priority creditors yourself.
A Debt Arrangement Scheme
If this does not suit your situation, then a Debt Arrangement Scheme (DAS) is potentially a good idea. A DAS is very much like a DMP, however, it covers both priority and non-priority debts.
- The amount you can afford to pay off your debts is discussed. Your living expenses will be considered but budgeting will be necessary
- A single payment is made by you to your DAS trustee
- That money is divided up and fairly distributed amongst your creditors
- Any interest, charges or late payment fees will be frozen once the DAS has begun
- Your creditors are not permitted to take enforcement procedures against you once the DAS has been set up.
There shouldn’t be a charge to arrange a DAS however a proportion of each of your payments will go towards admin fees. You will end up paying more than you owe with both a DMP and a DAS.
Scots who are struggling to repay debts
There are many places where Scots who are struggling to repay debts can go for advice on financial issues and debt and the friendly team at Scotland’s Trust Debt can offer impartial advice – which means you don’t have to follow the advice we give.
The advice from Scotland’s Trust Deed is to seek help as soon as you realise that bills are becoming difficult to pay. The longer you wait, the more charges, interest and stress will build up.
Paying off debt takes discipline, commitment and a strict budget. Scotland’s Trust Deed has always taken pride in giving our customers the knowledge and tools to avoid being in the same situation again.
Contact Scotland’s Trust Deed today to seek advice and help on how you can get out of debt.
Scots with debts are missing meals
At Scotland’s Trust Deed, we take great pride in helping our customers back onto the road to financial freedom. Our Debt Arrangement Schemes and Trust Deeds are a great option for those in debt who are hoping to avoid sequestration or bankruptcy.
Sadly, a survey has shown that more Scottish people than ever are struggling to cope financially. The research from the Citizen’s Advice Bureau in Scotland has revealed that 47% of Scottish workers run out of cash before their next payday at least once a year.
What’s even worse is that 35% of them have not bought food because of that financial shortfall. And this is only a survey of those in work – it could be higher for those not in work.
The friendly team at Scotland’s Trust Deed know, from experience, that a couple of weeks without money can lead people to turn to credit cards and payday loans in desperation. It’s these first steps into high interest credit that start the spiral into unmanageable debt.
‘Scotland is facing unacceptable levels of poverty’
A spokesman for the Citizen’s Advice Bureau in Scotland said that low pay, social security changes and a rising cost of living means that many people in the country are ‘facing unacceptable levels of poverty.’
The team at Scotland’s Trust Deed will advise that anyone struggling with making their pay last the whole month should speak to debt counsellors as soon as possible. The sooner the problem is identified, the quicker a solution can be found.
A spokesman for the Scottish Government has stated that help is available for families and individuals who aren’t able to meet their bills and basic living costs.
This aid package includes the ‘Fair Food Fund’ which promotes help for those in food poverty with the of turning Scotland into a country ‘where people have access to nutritious and healthy food’ without having to rely on emergency food aid.
It’s always a good idea to have a measured approach to financial hardship rather than panicking and turning to loan sharks and pay day loans.
Scots who are struggling financially
Indeed, we recommend that Scots who are struggling financially undertake a financial health check to ensure you are getting all the benefits you are entitled to with the hope that further debt management intervention won’t be required.
Also, the experienced debt advisors at Scotland’s Trust Deed can discuss in confidence the potential debt solutions that might be available to you to resolve your situation, including sequestration, a debt arrangement scheme (DAS) and a Scottish Trust Deed. Call the team today to find out what they can do for you.
Scotland’s Debt Arrangement Scheme explained
‘Scotland’s Trust Deed’ may be the name of our company, however, we are much more than a Trust Deed service. Our non-judgemental experienced debt advisors will help you to discover and decide which of our debt management plans is right for you.
A Debt Arrangement Scheme (DAS) is a popular option for people needing help, support and a structured plan to get them out of debt. A DAS leads to a Debt Payment Programme (DPP) in which you pay off your debt in manageable, affordable monthly amounts.
A DAS is a financial product that is exclusive to Scotland and must be arranged by an approved organisation such as Scotland’s Trust Deed.
Do you qualify for a DAS?
Head to the Scotland’s Trust Deed website to check your eligibility and contact us for friendly, impartial and expert advice.
- You must live in Scotland.
- You must have money left over from bills and necessities such as food and fuel to pay some of your debt off.
- You must be able and willing to pay off your debt in a reasonable length of time.
Why is a DAS a good idea for me?
- Your monthly payments will be affordable.
- The interest and charges that would ordinarily be building up will be stopped.
- The creditors who you owe money to will not be permitted to hound you or threaten legal action.
- A DAS is flexible within reason. If your circumstances change the payment amounts you make can be made lower or higher.
- A six-month payment break is a possibility.
- At the end of the DAS term, the rest of your debts will be written off and you will have a fresh start.
Are there any reasons to be wary about setting up a DAS?
- A DAS is not free. 10% of your monthly payments will be taken to pay for administration fees.
- Your DAS and subsequent DPP will be available to the public on an online register.
- The credit rating of someone with a DAS will be affected for six years.
- While there is flexibility you MUST abide by the rules and pay the expected amount on time. Failure to do so will cause the DPP to fail, interest and charges will be added by your creditors and there will be free to pursue you for the money you owe them.
How does a DAS work?
- An amount that you can afford to pay per month is discussed and agreed with your ‘approved money advisor’.
- The time span of your DAS will depend on how much you owe and how much you can afford to pay. It must be within a sensible length of time and cannot be over 10 years.
- A Debt Payment Plan (DPP) is set up and your monthly payments go into it.
- Any payments made are shared between and paid to your creditors by a ‘payments distributor’.
If you think that a Debt Arrangement Scheme and a Debt Payment Plan are a good option for you then contact Scotland’s Trust Deed to discuss how we can help.
What Scots can do to clear their debts
Seek free and impartial advice
Advice about debt needn’t be from an expensive financial advisor. There are many charities and businesses who will happily offer guidance and practical help for free – Scotland’s Trust Deed has a team of friendly and experienced debt advisors ready to listen and help.
You should ask for help as soon as you begin to worry that you will be unable to pay your bills, rent or debts. The earlier you get back on a firm financial footing the better as you will avoid late payment charges, interest and court fees.
There are several options for clearing your debt and you should think carefully about which will suit you the best. This article will help you decide which is right for you.
A Debt Arrangement Scheme (DAS)
This is a free plan in which you pay back your debts at an affordable rate over an agreed time frame. Creditors will not be allowed to chase you for money while the DAS is in place.
A Debt Management Plan
A third party, usually a debt management company, will set up an arrangement between yourself and the companies you owe money to. This type of plan is suitable for low priority unsecured debts and consideration will be paid as to how much you can afford to pay after your bills and home have been paid for.
This type of debt management is only available in Scotland. You will pay back what you can afford of your unsecured debts over a three- to five-year period. Once the Scottish trust deed has ended, the balance of your debt will be cancelled. Your creditors will be unable to add interest, chase you or take court action.
Scotland’s Trust Deed are experts at helping our customers achieve financial freedom by advising on and arranging Trust Deeds.
This is the most severe of the debt management options and will have the most effect on your present and future circumstances.
Sequestration is a last resort for dealing with the debts you simply cannot pay. Assets such as your car and home may be sold to pay off some of your debts.
After the term of sequestration ends, usually a year, the debts not paid off with your assets will be written off.
Your credit rating, employment prospects and ability to own a business may be severely affected.
Lump sum payment
In some circumstances, your creditors may accept a single large payment towards your debt as settlement for the entire amount. Negotiation will be required.
In rare cases when there is proof that a debt cannot be paid and there is no hope of it ever being possible, terminal illness or a severe life-long condition, for example, a debtor can request that their debt be written off entirely.
In all cases of debt and financial hardship, advice from experts is needed. Scotland’s Trust Deed are here to listen and offer support, so get in touch as soon as you begin to struggle with your payments.
A Scottish Trust Deed – what you need to know
A ‘Trust Deed’ is an agreement with the creditors to who you owe money to pay off what you can afford of your debt.
Fortunately, Scotland’s Trust Deed has a fantastic team who can support and guide you through every step of the process.
A Scottish trust deed is a less severe debt-solution route than sequestration (bankruptcy) and will avoid some of the legal restrictions and implications.
A Trust Deed will last, on average, for four years. After that time has ended, you will no longer be required to pay the rest of the debts involved in the Trust Deed and they will be written off.
You will be expected to pay an amount from your income to pay off some of your debts. The amount will be based on what you can reasonably afford after paying for your home, bills and necessities.
Some of your valuables (assets) may need to be given to the trustee of your Trust Deed. They will be sold to pay off a proportion of your debts.
Who is eligible for a Trust Deed?
- Your debts must be over £5,000
- You must have more than one debt.
- The applicant must be able to afford to pay back a minimum of 10p in every £1 they owe their creditors.
- You must live in Scotland
Why is a Trust Deed a good option for me?
- Interest and charges on your debt are not permitted once the creditor has agreed to your Trust Deed terms.
- If your Trust Deed becomes ‘protected’ even the creditors who did not agree to the terms must abide by them.
- Your creditors must communicate with your trustee, not you. The stress and worry of being hounded for money will be over.
- Unlike sequestration, you will be allowed a bank account with a debit card.
- Your employment will be unaffected except in very rare circumstances (check your contract of employment.)
- It is a flexible agreement that can be re-negotiated should your circumstances change.
- Your home may be protected from being sold to pay off your debts.
What are the negatives of a Trust Deed I should consider?
- Unless your Trust Deed becomes protected you will still have the creditors who did not agree to the terms to deal with and repay. Scotland’s Trust Deed can help you with this.
- Your financial freedom will be lost during the term of the Trust Deed. You must follow the advice of the trustee and do as they instruct, they can make you bankrupt if you don’t follow their rules.
- If you are the Director of a company this may have to end. Your Trustee and the rules of the company involved will decide.
- Your credit score and ability to get finance will be affected.
If you think that a trust deed is the right option for you, then you need to speak with the friendly team at Scotland’s Trust Deed as soon as possible. We look forward to helping you back on the road to financial stability.