Residents of Scotland have several debt management solutions available to them.
Scottish residents should read more about these on our site and then contact us.
We will help identify the best solution and get consumers on their way to becoming debt-free. Our advice is free and there is never any obligation.
At the same time, we cannot stress enough about the negative consequences of failing to address a debt issue.
An independent debt management company administers this informal debt repayment program, designed for people who owe £5,000 or more and have a disposable monthly income. The debtor and company representative determine how much the debtor can afford to repay each month.
The company then negotiates a repayment amount with each creditor. Each month, the debtor issues a single check that covers all debts. The debt management company receives this check and allocates the appropriate payment to each creditor.
Our debt experts will help debtors determine whether they qualify for a DMP. Since this is an informal program, creditors are not obligated to agree to it, nor are they obligated to freeze interest and other charges to prevent debt from increasing. Consumers should avoid debt management companies that charge a fee to administer a DMP.
A DAS is a formal debt management program that involves a Debt Payment Program, or DPP. This solution also combines unsecured debts and results in a single affordable monthly payment to an approved individual who then distributes the appropriate amount to each creditor.
If creditors have previously refused a DMP, this may be a suitable alternative. Interest and other charges are frozen from the date a DPP is approved.
Only an accredited Money Adviser can establish a DPP through negotiation directly with creditors. Our company matches consumers in debt with these qualified professionals. Be wary of organizations that charge a fee for DAS advice or DPP setup.
Our experts do not charge for their information or advice and they recommend only the most qualified Money Advisers. With an approved DPP in place, consumers can repay their debts in a timeframe and amount that are convenient.
A Trust Deed is a formal voluntary arrangement with creditors to repay part of the money owed. For Scottish residents with debt of £10,000 or more from at least two sources and some surplus income, the Trust Deed is viewed as an alternative to bankruptcy.
It is less formal and may also allow the individual to avoid some legal restrictions associated with being made bankrupt. The arrangement involves transferring assets that are sold to repay creditors and may also require an income contribution for between three and five years.
An Insolvency Practitioner serves as the trustee under this arrangement and we can match you with one that charges a reasonable fee. During a Trust Deed period, debt is frozen and the home may not need to be transferred. Once a Trust Deed period concludes, the individual is no longer liable for included debts.
If the Trust Deed is “protected,” creditors may not bankrupt the covered individual as long as he or she adheres to the agreement terms. Otherwise, only covered creditors are bound by the agreement.
Bankruptcy is a debt management solution for people who cannot repay their debts over the long-term. In Scotland, the formal declaration of insolvency is called sequestration and the amount of debt, ability to handle it, and the likelihood of repaying it determine whether this is the best solution.
Consumers put their house, business, and possibly even a private pension at risk when they file for bankruptcy. Therefore, they should discuss all their options with our qualified debt management professionals before making a decision.
To petition for bankruptcy, an individual must have total debt exceeding £1,500. The person must also prove eligibility based on income and assets, apparent insolvency, or receipt of a certificate of sequestration from an approved individual. A £100 fee must be paid to apply for bankruptcy and it may be paid in instalments.
After a 12-month bankruptcy period, covered debts are written off, allowing the consumer to start anew.
Affect on Credit Rating
Each of these debt management solutions will affect the credit rating of the debtor. Even with a DMP, a missed payment for credit debt will be recorded on the credit reference file of the individual. Some creditors may request that a note be placed on the file to indicate that the individual is on a DMP.
A DPP is recorded on the DAS register until the program is completed. Credit reference agencies retain Trust Deed, Protected Trust Deed, and bankruptcy details for six years and the information appears on a public register called the Register of Insolvencies until one year following the completion of trustee duties.
People in debt should be prepared for their credit to be impacted negatively, no matter what debt management solution they use. However, this consequence is usually far less painful than allowing the debt to go unaddressed. Bankruptcy is usually a last resort and Scottish consumers can avoid the ramifications of this by dealing with their debt before it becomes too serious.
The sooner they can become debt-free and begin rebuilding their credit rating, the better. With a call to our debt management experts, people in debt can begin working on their debt issues today.
Residents of Scotland have unique options when it comes to handling debt. They should consult with a professional who is well-versed in Scottish debt management programs. Our staff is able to navigate through the complexities of these various solutions and has developed strong relationships with the professionals qualified to manage them.
Before pursuing any debt management solution, it is important to weigh the options. We make this easier to do by providing comprehensive information at no charge. When debt becomes an issue, we are there to help you handle it.
Read our website and then contact us to see how we can provide assistance with eliminating various amounts of debt.