HELP WITH DEBT

Debt Help Scotland

HELP WITH DEBT

Debt Help Scotland

Overview

At Carrington Dean, we understand that talking about debt isn’t always easy. But over the years, we’ve helped over 24,000 people start the conversation and break down the stigma that surrounds debt.

From losing a job or experiencing an unforeseen accident to overspending on a holiday or expanding your family, it’s easy to suddenly find yourself in debt. Some of the most everyday life events can transform your budget in the blink of an eye.

No-one really thinks about debt solutions until they’re in debt. When you’re first doing your research, all the available options might seem similar, but some are more suitable for certain types of debts than others.

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.

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.

 

 

When should I get help?

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.

Will it affect my credit score?

Yes, most debt solutions will have an impact on your credit rating and credit score. Getting credit in the future will be more challenging, too. 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.

 

Key solutions available 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 debt solutions currently available in Scotland.

Trust deeds

A trust deed is 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. 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 Schemes have been 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 no longer be in any debt.

You could write off up to 75% of unsecured debt with our debt assistant.

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