Lewis Alexander™ Financial Management Blog

Do you know what other debt consolidation help, advice or solutions are available to clear personal debts in Scotland UK, apart from a Protected Trust Deed?

• Are you Scottish and wondering how you can clear personal debts without utilising a Trust Deed?
• Have you taken any trusted and professional debt consolidation help or advice yet?
• Confused by certain options you are being told are available to clear debts in Scotland?

When we are contacted by Scottish residents, the most important part of the advice we can offer is that debt help, advice and solutions available in Scotland differ to those available throughout the rest of the UK.

People across the UK are being called daily by companies that claim to have all sorts of magical ways to wipe out personal debt problems for consumers.

• We are proud to state that Lewis Alexander Financial Management is NOT one of those companies!

There is plenty of free debt advice in Scotland available from the National DebtLine Scotland.

• The main Scottish debt solutions available are as follows;

Protected Trust Deeds – (Scottish equivalent to the English IVA or Individual Voluntary Arrangement)

A Trust Deed in Scotland will usually take about 3-5 years to complete. You are asked to pay one monthly payment for that period and after such time any remaining debt is usually written off by the creditors.  All interest and charges are stopped during this period and creditors would usually contact the Trustee / Insolvency Practitioner who is managing the case and not you the client directly. This is a voluntary agreement but is formal and legally binding. Trust Deeds in Scotland differ as some are protected and some are not. It all depends on the quality of who is managing the case for you. A Trust Deed in Scotland becomes protected as long as;

• No more than half of your creditors object to your Trust Deed!
• No more than one third of creditors in debt value object to your Trust Deed!

Creditors cannot pertition you for Bankruptcy once your Trust Deed is Protected!

A Trust Deed will be recorded on an individuals credit record and it would be expected that you do not apply for further credit whilst the Trust Deed is in place. It may take some time for your credit rating to repair once the Trust Deed is over. If you own a property, you may be expected to release any available equity from that property whilst the Trust Deed is in place to make a greater contribution to the overall repayment the creditors would receive. There is no court hearing or need to appear in court when setting up a Protected Trust Deed in Scotland. Find more information about how Trust Deed Fees work.

Sequestration – (Bankruptcy in Scotland)

This is conducted through the Sheriffs Court, your creditors can either pertition for your Bankruptcy or you can apply directly for voluntary Sequestration / Bankruptcy. During the Sequestration process all of your assets or savings including cars and homes are passed to the Trustee or Insolvency Practitioner as part of the arrangement and remain under Trustee control. They are allowed to be sold to make the contribution back to your creditors larger. If you cannot afford to repay your debts in a reasonable amount of time, you may be expected to pay a monthly amount to your Trustee for up to 3 years. If you cannot afford to make a monthly repayment due to a negative disposable income, you will not repay monthly and the period of Sequestration would usually last for 12 months at which point you would become debt free and debt remaining would be written off by the Sequestration process.

• You cannot borrow more than £500 whilst in Sequestration.
• Your employment could be affected so you should check with your employer first.
• Your credit rating will be affected.
• If you are self employed you may not be able to continue trading.
• Members of Parliament, Schools, Councils and company Directors will not be able to continue these practices whilst in Sequestration.
• Windfalls and inheritance will be taken into account should you be so fortunate whilst Bankrupt in Scotland.

DAS / Debt Arrangement Scheme – (Only available in Scotland)

The Debt Arrangement Scheme is a relatively new personal debt solution for Scottish residents to clear personal debts. It is a Scottish government approved and run Debt Payment Programme.

Debt Arrangement Schemes allow you protection from your creditors from legal action and allows you to repay at a rate that you can afford. All interest and charges on your debts are frozen if the DAS / Debt Arrangement Scheme is approved. A Debt Arrangement Scheme can last for a reasonable amount of time and if you are a Scottish resident and have one debt or more that you are in difficulty with, you may qualify for a Debt Payment Programme. You must be able to contribute an amount monthly that you can afford to repay.

If you fail to pay for 2 months or more, your Debt payment Programme can be ended and you can become liable for all the interest and charges that were previously frozen.

Debt Management Plan – (Also available in England, Northern Ireland and Wales)

A debt management plan is an informal arrangement between you and your creditors to repay what you owe. Not legally binding but conditions do apply and credit ratings can be affected.  Usually offers one monthly payment. The company you chose to conduct your debt management plan can often make the difference to the plan being successful or not. Read further about debt management online.

• Please remember that you have to be committed to any personal debt solution for it to work and if not, the debt simply will not clear itself!

For UK debt advice and consolidation help regarding personal debt solutions available to clear debts in Scotland, please contact our Lewis Alexander personal debt helpline in confidence.

Call 0800 018 6868 Free today

Lines are open 24 hours / 7 days

Calls are usually FREE from a UK land line

From mobiles it may be less expensive to call 0161 872 3383