Being in debt can be a stressful and worrying time but for people living in Scotland there are options available to deal with the problem.
Essentially, a debtor can arrange for a Debt Payment Programme under the Scottish Debt Arrangement Scheme (DAS).
With such a scheme, the debtor will commit to a programme of debt repayment to their creditors – that is the people they owe money to, which will be based on their disposable income.
This means that the repayments will be affordable because the debtor’s income and outgoings must be calculated first to see how much money can be reasonably paid back.
It’s important to appreciate too that the debtor must seek the assistance and advice from a money adviser before they can apply for a debt payment programme.
Solving debt problems for Scots
Depending on the amount of debt and how much the debtor can repay, the DPP can last for a ‘reasonable length of time’.
The agreement will see a creditor receiving regular payments to the debt, or debts.
More importantly when the money adviser submits the application to the debtor’s creditors for their approval all fees, interest charges and penalty charges are then frozen until the application is approved.
Under a DPP, a debtor is also protected from any action that a creditor may take against them in a bid to recover the debt owed.
However, it’s also important to understand that should the agreement be rejected by the creditors that isn’t necessarily the end of the available debt solution options for people living in Scotland.
Available debt solutions for Scots
If the DPP is rejected then everyone, the debtor, creditors and money adviser will be told that the application has been turned down.
Of course, a debtor may decide to reapply but if that application is rejected again then the debtor will need to seek out further advice for their money problems and even consider an alternative debt relief option.
This will include things like bankruptcy or undertaking a protected trust deed.
People in Scotland with debt problems can also approach specialist debt advisers who will be able to give free advice about the debt solution remedies that are available.
These debt advisers will look at a debtor’s individual circumstances and then tailor their advice to help deal with their debts and get them back onto a financially sound footing once again.
Finding debt advisers in Scotland
Indeed, debt advisers also have online debt resolution tools that will quickly and efficiently reveal what potential solutions are available.
Other avenues include starting up a debt management plan which are available across Scotland and are free to arrange.
This will see the debtor making a single monthly payment to their debt adviser who will then share the money between the creditors fairly.
Other options include a trust deed which is a legally binding arrangement between the debtor and creditor for the debt to be paid over a longer period, generally up to four years.
The benefit of setting up a trust deed in Scotland is that the debtor agrees to make a monthly payment and at the end of the agreed term any remaining debt is then written off.
Why a trust deed can help people in debt in Scotland
Scots in debt can also choose sequestration, or bankruptcy, which is a form of insolvency.
This route is mainly for those people who cannot pay back their debts within a reasonable length of time. Sequestration will also see the selling of assets, including the debtor’s car or house, to help pay their debts.
Other choices for Scots in debt include equity release to free up the equity that’s tied up in a property and a settlement offer which could see a debtor selling an asset, such as a car, to help clear an unsecured debt.
There’s also debt consolidation which enables a debtor to take out one big loan to pay off all of their debts in one go, and the possibility of re-mortgaging their property to raise funds to pay debts.
Don’t forget too that there are several charities who can help with debt solution advice and some very good debt advisers, such as those at Scotland’s Trust Deed, who can help with debt advice for Scots.