Debt Help in Scotland
How to get Free Debt Advice in Scotland?
If you find it hard to repay your creditors and your bills are growing on a daily basis there are a number of options available to help you get back in control of your finances. Your options may vary depending on your circumstances, level of debt, income and assets you have. It is important to remember that you are not alone and help is always available regardless of your situation.
Whatever your circumstances our friendly and dedicated team of debt advisors will be able to help. We are located in 5 offices across central Scotland including Glasgow, Edinburgh, Hamilton, Stirling and Dumbarton. If you require help please contact our team and speak directly to a qualified debt expert. We can advise you on budgeting through the Common Financial Statement, repayment plans through referrals to StepChange debt charity or your local Citizens Advice Bureau, sequestration and trust deeds.
If you are struggling with personal debt or facing pressure from different creditors take the first step towards becoming debt free and contact our licensed team of professionals. Get your questions answered and take control of your finances. Simply call or email us and speak directly with a qualified adviser on 0800 652 0002.
FAQ about Debt Help
Debt can be divided into two major types: secured and unsecured. It is important to know the difference for prioritising debts.
A secured debt is a type of debt that requires an asset to be secured against the loan as a guarantee for the money borrowed. It is vital to keep up your agreed payment arrangement in order to keep your assets under your control. If you fall behind in your payments your lender may be able to repossess your assets.
An unsecured debt is a type of debt that is not tied to an asset such as a house or a car. In other words, you are not required to provide an asset as a security to get a loan from your creditor. The examples of unsecured debt include credit cards, utility bills, telephone and payday loans.
Here are some of the most common debt management options in Scotland.
Debt Arrangement Scheme (DAS). DAS has been developed by the Scottish Government to help people or businesses with financial difficulties repay their debts over a realistic period of time. Debt Arrangement Scheme enables people to pay back their debts through a debt payment programme (DPP) based on their disposable income. The biggest advantage of DAS is that all of the debts are repaid if an individual or a business successfully completes DPP.
The scheme protects debtors from creditors and means that creditors can’t take any action against them once the Debt Arrangement Scheme is approved. In addition all of the penalties, interest and charges owed are frozen. If your financial situation changes you can apply to alter your payment plan or ask for a 6 month payment break.
Trust Deed in Scotland. A trust deed is a formal debt solution that is available for Scottish residents. It is a voluntary agreement between you, your Trustee and your creditors that enables you to repay a part of your debt by making reduced payments over a period of 4 years. At the end of the process, the remaining debt is written off.
Trust Deeds are a specialised area of debt advice in Scotland. It can only be completed with the help of a licenced Insolvency Practitioner (IP) who is known as the Trustee. Once your trust deed is approved your creditors will stop chasing you for payments. Your Trustee will deal with your creditors on your behalf and will support you through the process.
FD Debt Solutions is recommended by the Step Change debt Charity for administering trust deed arrangements.
Scottish Bankruptcy or Sequestration. Sequestration is a form of insolvency only available in Scotland. This solution can enable some of your debt to be written off, but is only suitable if your debts are significantly higher than your assets. If your assets exceed the level of your debts you should consult a debt adviser to help you with other debt management options.
To be eligible for sequestration you have to owe more than £3,000, live in Scotland and you can’t have previously been bankrupt in the last 5 years. If you are considering sequestration contact us for a free consultation to explore other options.
Minimal Asset Process (MAP Bankruptcy). Minimal Asset Process solution is available for Scottish residents who don’t own many assets and live on a low income. It is a cheaper alternative to sequestration that can enable you to deal with your debts and give you a fresh start.
Temporary Repayment Plan. This is a short term solution for those debtors who can’t afford to pay their creditors in line with the agreed payment terms. A temporary repayment plan allows you to make small payments towards your debts and demonstrates your willingness to deal with your debts once you get back into a better financial situation.
Remortgaging. Remortgaging your property can help you to get extra funds to restructure your finance or repay your debts. It may be the best option if there is a lot of equity in your property, but you will be required to take independent financial advice in this regard from an FCA regulated advisor.
Every month we have to deal with a number of bills and sometimes it can be challenging to allocate your budget in the right order. Why is it vital to pay your mortgage or a council tax first and what are the consequences if you don’t pay your Child Maintenance arrears?
If you tend to fall behind paying your monthly bills or have incurred several debts it is important to pay your debts in the right order including debt emergencies, priority debts and non-priority debts.
The debts classified as emergency or priority mean that the consequences for not paying them are greater than the risks. If you don’t pay your priority debts first you might face eviction, be fined, your assets or wages could be frozen. As a result it is vital to pay your priority debts before dealing with non-priority debts.
Priority debts include:
- Rent, mortgage or secured loan
- Council Tax
- TV Licence
- National Insurance, Income Tax and VAT
- Gas and electricity bills
- Water bills
- Child maintenance arrears
- Hire purchase agreements or logbook loan
- Court or criminal fines
There are a number of debt management options available if you want to clear or reduce your debts quickly. The most important thing is to know exactly how much you owe including your mortgage, bank overdrafts, store and credit cards, personal or payday loans. Once you make a list of what you owe you can start planning how to reduce your spending and repay your debts more quickly. Here are a few budgeting tips that can help you make a start in clearing your debts;
- Make a list of what you owe your creditors.
- Start recording your spending to see where the money is going.
- Prepare a realistic budget that would include repaying your debts.
- Try not to borrow any more money until you get your finances under control.
- See where you can save and switch your utility suppliers if they can offer you a better deal.
- Switch banks if you can get a better deal on overdraft charges, mortgage or credit cards.
- Be disciplined and buy only what you need until you have repaid your debts.
If you are struggling to keep up with your monthly bills or loan repayments contact a professional money adviser to help you plan your finances better. If you are looking for a licenced insolvency practitioner contact our offices across Scotland including Glasgow, Edinburgh, Stirling, Dumbarton and Hamilton. Our team will help you find the right debt solution and guide you in every step of the way towards your debt free future.
Getting into debt can be very easy regardless of your social status or financial position. However, getting out of it can prove to be tricky and much harder to escape.
Recent statistics have shown a large number of personal bankruptcies in the UK and central Scotland. People get into debt for various reasons including sudden unemployment, divorce, poor money management, unexpected expenses, illness or lack of emergency savings. Research undertaken by the Citizens Advice Bureau and StepChange Charity revealed that council tax debt is amongst the top debt problems in the country. The key is to recognize that you have money problems and get some professional help as soon as possible.
A credit rating is a specific estimate that allows your lenders to assess your ability to fulfill your financial commitments based on your past dealings. A credit score helps them to decide if you will be able to repay your loan, how much money to lend you and how much interest to charge you.
A credit rating can be affected by a number of factors including high levels of debt, unpaid bills, missed payments, frequent change of address and even having joint accounts with people who have a poor credit history.
If you need to know what your credit score is, you can check your credit rating via agencies such as Experian or Equifax. Make sure that the information on the credit report is correct and if not ask the company to alter the details.
If you would like to improve your credit rating there are a few small things you can do for an immediate effect.
• Register to vote because lenders regularly use this platform to verify your identity.
• Cancel all of your unused credit cards to avoid the chance of becoming a victim of fraud.
• Don’t apply for anymore credit until you repay your previous loans.
• Always try to pay off your credit cards and overdrafts on time; or as early as possible to demonstrate that you are a responsible borrower.
Divorce or separation is never easy. It often puts a lot of stress and emotional pressure on both partners and involves dividing family assets as well as debts. The most common question that arises during the process of separation is ‘who is liable for paying back existing debts?’ The simplest answer usually is the person who took the loan under their name. If you or your husband/wife took a mortgage or a credit card under your name, then it is normally your responsibility to repay the lender. If the loan or a mortgage was joint then both parties are responsible for paying the whole sum back.
There might be some exceptions but you would need to consult your lawyer and the lender. If you have any joint debts with your ex-partner both of you are liable for repaying them in full. If you are left with a joint debt or a loan, and your partner refuses to pay his or her part, you need to inform your bank about the change in circumstances. Your bank might be willing to reduce your monthly payments for a period of time or put some restrictions on your joint account to help avoid creating more debt.
If you would like to find out more about debt and divorce click here.
Debt is never easy to talk about. However, it can become a more serious issue if you are not proactive in dealing with it and this can lead to stress, mental health issues, and emotional strain. Our team of licensed insolvency experts are here to help and advice you on debt problems at hand. We have been helping people with serious debt issues for a number of years and we can help you too.
If you are having money issues and need help with debt contact any of our offices located in central Scotland including Glasgow, Edinburgh, Hamilton, Stirling or Dumbarton.