The best option for paying off debt that is right for you will invariably always depend on your personal circumstances. We have a free Scottish debt help guide that can be used to work out the differences between each solution and how they may be advantageous for you, plus the disadvantages of each too. It’s always our recommendation to seek advice from an experienced debt adviser, as they will give you the most informed view of which options are best for paying off debt in Scotland.
You may recognise any of these 10 traits in yourself when you have unaffordable debts in Scotland, but that alone doesn’t automatically mean you’re in need of a formal solution for your debts.
- Paying non-priority bills like credit cards instead of priority bills such as your mortgage or rent.
- Borrowing money from family and friends.
- Using payday loans to keep yourself rolling over.
- Dreading receiving new bills because you know you can’t pay them.
- Running out of money within days of being paid.
- Your credit and debit card are declined at the shop till.
- Using your bank overdraft to get by month to month.
- Making minimum payments every month to your credit cards.
- Avoiding phone calls and visitors to your doorstep for fear of it being a debt collector.
- Pretending everything is ok when it’s not.
Where you can get help today
You can and should seek help from a qualified money advisor as soon as you possibly can.
Trust Deed Scotland® can be reached between 9 am and 8.00 pm by calling 0141 221 0999 or you can use an alternative method to contact Trust Deed Scotland.
If you owe money to your creditors and you’re starting to receive demands for payment through the post, or by telephone – try and stay calm.
The letters are deliberately worded to cause urgency, fear or alarm, so much so that the UK government ordered new debt letter rules to make the letters less intimidating and reduce distress.
If you are considering an option for paying off debt that feels rushed, as a result of a creditor pushing you into it – make sure that this isn’t the only motivation for applying for the solution.
A good debt advisor will always give you transparent, balanced advice and leave the decision in your hands, at your own pace. If you’re not quite ready to proceed, you can apply for a Statutory Moratorium to give yourself breathing space of up to 6 months from your creditors.
Trust Deeds
An option for paying off debt in Scotland is a Protected Trust Deed.
Learn more about what are Trust Deeds and how Trust Deeds work.
As a formal, legislated solution, the Trust Deed helps thousands of people make a fresh start every year in Scotland.
A Trust Deed typically lasts for 4 years in Scotland and can be used to manage unsecured debts such as credit cards and loans.
Once in place, interest and charges are frozen, creditor contact will be reduced from payment demands to mostly administrative notifications such as statements – all of which will be managed by your Trustee.
When you evaluate whether or not you feel that a Trust Deed is a good idea or not you for – consider all pros and cons and how they affect you on a personal level.
It’s important to seek advice from a qualified money advisor such as Trust Deed Scotland® where you will receive tailored debt advice based on your circumstances.
Debt Arrangement Scheme
Repaying debts under the terms of the Debt Arrangement Scheme is a solution that is growing in popularity.
Figures based on official 2018-2019 to 2019-2020 data show an annual increase of 23% for people using DAS to clear their debts and that’s before taking into account figures that are likely to be inflated due to the Coronavirus pandemic and its financial impact on households.
When you apply for a Debt Payment Programme in Scotland and it becomes approved, like a Trust Deed any interest and charges will be frozen.
Depending on how much debt you have and how much you pay, the length of time to repay may be quicker, or longer than that of the Protected Trust Deed.
Regardlessly, you will have a fixed end date in mind, which may then be shortened depending on your affordability and whether your personal circumstances were to change in a positive way.
Learn more about what is a DAS and the advantages and disadvantages of the Debt Arrangement Scheme as a potential option for paying off debt for you.
Minimal Asset Process vs Full Administration Bankruptcy
The Sequestration (Scottish bankruptcy) method is another option for paying off debt in Scotland.
It’s possible that a creditor can petition for your bankruptcy and remove the decision from your hands, if this is a concern for you – give us a call on 0141 221 0999.
Sequestration or Bankruptcy in Scotland arguably carries the greatest stigma, yet while it may be considered as a last resort for many, the reality is that it can be the most effective way of clearing your unaffordable debts and moving forward in life.
The sequestration process is effectively divided into two categories – Minimal Asset Process and Full Administration Bankruptcy.
There are setup fees usually for these two products, however, recent legislation changes to MAP Sequestration mean it is now free to apply for. With Full Administration Sequestration, those fees have reduced these fees to a lesser amount of £150, depending on the individual’s income. If you are in receipt of certain benefits, the Sequestration too may be processed for free.
An alternative option for paying off debt in Scotland?
There are other alternatives that can be viable options for paying off debt in Scotland including an informal Debt Management Plan, or a Debt Consolidation Loan.
You can find out more about the differences between a Debt Management Plan vs. Debt Arrangement Scheme but essentially the main difference between one and the other, is that the DMP is informal and the DAS is formal.
Debt consolidation is perhaps the most commonly known overarching term for all debt solutions available in Scotland.
This can help create a view that the only way to manage debt is to borrow more money in the shape of a larger amount of money and then consolidate those debts down to one, either by using a credit card or a loan.
However, while there are benefits to doing so, the reality is that finding funds at a favourable rate is less likely. More often than not, with a poor credit rating and a history of defaults – the only loans that may be made available to you are a secured loan against your property or a guarantor loan using someone else to repay the debt on your behalf.
We tend to advise against both of these solutions, but given the right circumstances, you may feel different, or they may work for you. Call us on 0141 221 0999 to find out more about how we can help you consolidate your debts.
Find out more about the differences between an unsecured loan and a secured loan.
Will Trust Deed Scotland® be able to help me?
When you seek help with your debts it can be a worrying time.
It is a big step, one which Trust Deed Scotland® fully understands and undoubtedly, people may be worried about doing so. You may worry about the reaction you will get from a stranger, and you may fear that the people you are speaking to will be shocked, will disapprove or judge you.
On top of that, there is a stigma surrounding the debt advice process itself. What does it involve and what do all these abbreviations all mean?
Debt advisors should never be judgemental and should always advise you on what’s in your best interests, not their own. If you feel they are pushing you into a solution without properly explaining it, seek qualified debt advice elsewhere.
You should NEVER pay to receive debt advice, and no solution should have upfront setup fees; other than those required directly for Sequestration, should you not be exempt from paying the £150 application fee for this.
Trust Deed Scotland® feels proud of our debt advice reviews as they indicate how our customer feel about our service in their own words.
With over 10,000 reviews on Trustpilot, we’re rated excellent in their Debt Relief category, and with more five-star reviews than anyone else – we’re the No.1 rated in the category as well.
Call us on 0141 221 0999, or try our Trust Deed Wizard® tool to get started.