Figures released by the Bank of England reveal that consumer credit has now reached a post financial crisis record of nearly £200 billion.
The figures also mean that growing numbers of people around the country are struggling financially and are looking for ways to solve their problems.
A recent conference on the issues of personal debt in Scotland revealed there are growing concerns that rising prices and stagnating incomes means growing numbers of people will struggle.
Household budgets are coming under increasing pressure which means more and more Scots who are struggling with their money face the prospect of ending up in serious debt.
The conference heard that organisations that give money advice say the issue of debt is linked closely to that of living costs.
They say that Scots on low incomes are falling behind with paying bills such as gas and electricity as well as their council tax.
The need for impartial financial advice
They also add that the need for impartial financial advice is growing in importance.
This last point is particularly important and for those who are living in Scotland and struggling with debt there is an easy way to access impartial help and advice from experienced debt advisers.
That is to speak with the team at Scotland’s Trust Deed or they can use an online debt test on their website to find out what potential financial solutions are available.
It’s possible that the debt adviser may talk about a debt management plan which is simply a way of repaying debts at a rate the debtor can afford and not at the rate the creditors are demanding.
While a debt management plan is not legally binding, it’s important that those who undertake an arrangement maintain it so their creditors continue freezing the interest and fees on the money owed.
Also, there is no legal protection from the creditors and for those who are looking for some degree of protection then they should be looking at a trust deed or a debt arrangement scheme.
The debt arrangement scheme
There are many reasons why someone living in Scotland should take a closer interest in the debt arrangement scheme rather than a debt management plan since this will bring protection and help repay debts at a rate the debtor can afford.
There’s also a method of undertaking informal negotiations which will work like a debt management plan and will lead to an informal arrangement for the debt to be repaid but at a frequency and an amount the creditor is happy with.
The debtor will need to deal directly with creditors and it is their responsibility for implementing the arrangement.
Another issue for speaking with creditors is to discuss a full and final settlement which means the creditor will make a one-off lump sum and have the balance of that debt written off.
For many Scots struggling financially, this may be a suitable debt resolution but only if they can access a large sum of money; this could be a loan from parents, an inheritance or even a redundancy pay-out.
Potential for Scots in debt to undertake a trust deed
While the debt arrangement scheme may also be a good idea for some people, there’s also the potential for Scots in debt to undertake a trust deed.
The big difference between this and the debt arrangement scheme is that the debtor will repay what they can afford for a limited period of time.
This repayment plan will generally run for four years and the amount of money that remains at the end will be written off.
There are obvious attractions to the potential of having a debt written off but it’s important that people living in Scotland undertake expert financial advice before they make a decision or sign any agreement.
As mentioned previously, one of the best ways of doing this is to speak with the expert and impartial team of friendly debt advisers who work at Scotland’s Trust Deed for more help and information.
It’s also important to remember that the conversation will be confidential and any advice will be impartial so the person contacting Scotland’s Trust Deed for debt advice is under no obligation to follow it.