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.