DEBT SOLUTIONS
Debt Help Scotland

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Overview

No-one really thinks about debt solutions until they’re in debt. We’re here to put you on the right path and make sure you have all the information you need to make the right decision. Because when it comes to debt, understanding your options is the first step towards changing your life.

Contents

Do I have to pay for debt advice?

Do I have to pay for debt advice?,

While some organisations charge for help, paying for advice is not something we advocate, so all our debt advice is given completely free of charge.

If you decide to go ahead with a formal debt solution, for example, a trust deed, there are associated charges for setting this up.

However, these will be taken off the monthly fee that you pay throughout your arrangement. We won’t charge you anything over and above your monthly payments.

Write off up to 70% of your unsecured debt – Check if you qualify

When should I get help with my finances?

When should I get help with my finances?,

It’s always best to get help with your debts as soon as you realise they’re becoming a problem. Generally, your creditors (the people you owe money to) will be much more understanding and flexible if you let them know you’re struggling as soon as your circumstances change.

Sometimes, that’s easier said than done, and your debts can snowball out of control. That’s where we come in.

How do I clear my debt in Scotland?

How do I clear my debt in Scotland?,

There’s always a way out of debt, and it’s important to remember that you’re not alone. Below, we’ve explained three of the most popular debt solutions currently available in Scotland.

Trust deeds

A trust deed is one of Scotland’s most popular formal debt solutions – a legally binding agreement between an individual and their creditors that generally lasts for a four-year period.

A licensed insolvency practitioner will act as a trustee and deal with the people you are in debt with on your behalf to allow you to pay off your debts at a rate and for a term that’s manageable.

Who is it for?

This solution is only available to Scottish residents who have an overall debt level of more than £5,000.

How will it help?

A trust deed will combine all of your unsecured debt repayments into just one manageable monthly payment, based on your household income and expenditure.

If you decide to set up a trust deed, you won’t have to deal with the companies you owe money to; your trustee will do it for you.

It also protects you from any legal action from your debtors to recover the money they’re owed and prevents them from being able to repossess your home or car.

Debt Arrangement Scheme (DAS)

Debt Arrangement Scheme (DAS) was introduced by the government as an alternative to trust deeds.

This solution allows you to pay back your debts over a period of time that works for you. Interest, fees and charges are all frozen and your debt repayments are combined into the one manageable monthly payment.

Who is it for?

This solution is available to Scottish residents who are struggling to repay their unsecured debts. There’s no minimum debt level needed to apply for a Debt Arrangement Scheme, but you will have to repay your debts in full under this solution.

How will it help?

In a similar way to a trust deed, a Debt Arrangement Scheme will give you protection against any legal action from the companies you owe money to and you’ll be able to keep your car and home.

This solution ultimately gives you breathing space within your circumstances to be able to regain control of your finances and repay your debts in a way that’s suitable for your situation.

Sequestration

Sequestration is the Scottish equivalent of bankruptcy. This is commonly a route taken by people who don’t have enough disposable income to qualify for other debt solutions.

In sequestration, a trustee will take control of your estate and deal with your debtors on your behalf, deciding which of your assets can be used to generate funds to pay back your debts.

Where funds are available, you’ll be given a four-year term in which to make repayments, however, the trustee may grant you a discharge after a one-year period if deemed appropriate.

It will cost you a £200 application fee and you must co-operate with your trustee for the duration of the sequestration period.

Who is it for?

Sequestration is available to Scottish residents who have an overall debt level of £1,500 or more and are struggling to make repayments due to low disposable income.

How will it help?

If you enter into sequestration, your debtors can no longer take any legal action to recover your debts and you will no longer have to personally deal with them – the trustee will do this for you.

Once you have been discharged, you’ll be debt free, and no longer responsible for any debt included in the debt solution.

A massive thank you

“I’d like to say a massive thank you to Carrington Dean for helping me. It feels like I have control of my life again.”

How long before a debt is written off in Scotland?

How long before a debt is written off in Scotland?,

As you can tell from the debt solutions above, the amount of time before a debt is written off in Scotland differs depending on whether you’re using a Trust Deed or sequestration, while some debt solutions don’t include a write off at all, and require you to pay the money you owe in full.

In general terms, however, a debt will be written off in Scotland after five years of inaction.

This process is known as ‘prescription’, and is similar to statute barred debt in England, Wales, and Northern Ireland.

If you haven’t made a payment towards a particular debt for five years, and your creditors have made no attempt to communicate with you or collect from you in that time, your debt will be considered prescribed.

This means it legally ceases to exist and you are no longer responsible for the money owed to creditors.

Will debt solutions affect my credit score?

Will debt solutions affect my credit score?,

Yes, most debt solutions will have an impact on your credit rating and credit score. If your credit rating takes a hit, getting credit from an organisation like a bank will be more challenging in the future.

However, if you’re failing to keep up with bills and falling into debt, your credit score will already be negatively affected. And once you’ve dealt with your debt, you can start to rebuild.

Find out if you qualify to write off up to 70% of your unsecured debt!

Who can I talk to about clearing my debts in Scotland?

Who can I talk to about clearing my debts in Scotland?,

Even if you have severe debt problems, reaching out for debt help is never easy. It can be hard enough talking to your family about money problems, never mind reaching out to a money advisor or debt management company.

At Carrington Dean, we understand the circumstances that lead people to debt, and as the biggest debt management firm in Scotland, we make sure our advisors treat every client with respect.

Our expert debt advisers will take your home life and financial situation into account, and can help you come up with a payment plan that works for you.

For free debt advice and debt information from people who understand the landscape in Scotland, contact us today on 0800 043 1320.

KEY TAKEAWAYS

  • Understanding your debt solutions is the first step towards changing your life.
  • Seeking help with debts early can help in negotiating with creditors.
  • In Scotland there are various debt solutions available, including Trust Deeds and the Debt Arrangement Scheme (DAS).
  • A Trust Deed allows you to write off a portion of your unaffordable debt.
  • Debt solutions may impact credit ratings, but dealing with debts can help you rebuild your credit profile.