The government has unveiled an assault on payday lenders which could see Scottish families on low incomes being given access to interest-free loans.
The move would help around 3 million people in the UK struggling with problem debt.
The project will resemble a similar scheme in Australia that has helped for out of five people who were borrowing money from payday lenders to stop using those expensive loans.
In paperwork revealed that after the Autumn Budget, the government stated: “For some, borrowing from community and social lenders can be unaffordable. Therefore we will launch a study to design a pilot for next year for a no interest loan scheme.”
Scots struggling with problem debt
Chancellor Philip Hammond also announced plans to offer ‘breathing space’ for Scots struggling with problem debt and offer legal protection from their creditors from the current six weeks and up to 60 days.
A spokesman for one debt charity said that with the right ‘ambition in creativity’, then progress can be made on resolving problem debt for families.
The new scheme will see the government team-up with the banking industry and debt charities to offer the interest-free loans for those who are in most need.
There’s no doubt that payday lenders, as well as loan sharks, have created serious financial and debt problems for people living in Scotland who have found it difficult to repay what they owe and to access other forms of finance.
There are ways to resolve debt in Scotland and the friendly team of advisers at Scotland’s Trust Deed will be able to tell you more. This advice is impartial and confidential and what they tell you do not have to follow.
A Scottish trust deed
But if you do then you’ll find there are a number of solutions to meet a range of needs, including the debt arrangement scheme, a Scottish trust deed as well as sequestration, which is better-known as bankruptcy.
This last option can have serious implications and should be carefully considered before proceeding with.
Alternatively, the debt arrangement scheme enables someone living in Scotland to access this Scottish government run tool to repay everything that they owe to their creditors.
There’s also the option of a Scottish trust deed, which is only available for people living in Scotland, and they can repay their debts over a set period and the amount that’s left is then written off.
Scottish trust deed and the debt arrangement scheme
Both the Scottish trust deed and the debt arrangement scheme are proving to be increasingly popular because they are an effective way of repaying debts and getting onto a better financial footing.
For any help and advice about debt in Scotland and to learn more about the possible debt solutions, then speak with the friendly team at Scotland’s Trust Deed.