Debt Advice Scotland: Get Help To Become Debt Free
It's a daunting time when you are in debt and can be difficult where to turn to
. Glasgow is one of the Uk's debt capitals so it knows more than most.
There are several different kinds of debt advice companies and there advice should always carry a no upfront fee. There are several different debt advice charities such as the ccs and citizens advice who will charge you know fee but it can be a lengthy process to get you debt free. Instead there a number of companies who will work in best interests but do things in a proactive manner which gives you peace of mind that your debt is being dealt with. We recommend using one of these companies.
How can debt advice be free of charge?
People in Glasgow are often anxious and worried about their debt problem and are confused by which company to trust to sort out there debt. The problem is that there is a lack of transparency in the debt advice industry which leads to confusion and frustration. There are different not for profit companies: the one's which charge and fee and the ones that don't. The companies that charge can give you a bill for up to 5000/6000 and then leave you with your debt problem - so if you take anything from this article, it's this, never, ever pay for debt advice, it should be free and you should feel that you are being helped !
Other debt solutions are offered by companies but sometimes you'll find that the debt company has the company administering it in house to make money from the contributions you pay in after so many months.
What debt solutions are available?
A debt Management plan is an informal agreement which allows you to freeze the interest for a period of time, pay a management fee generally each month for someone to do this and is informal so you can leave this at point in time if you feel it isn't working for you.
A Protected Trust Deed is a legal agreement with your creditors where you agree to make a monthly contribution to your debt via an insolvency practitioner. One of the main benefits of a Protected Trust Deed is you can repay a minimum of 10% and the rest of the debt is written off up to 70% at the end of the solution. Typically the return is 30% of the money borrowed. A Protected Trust Deed usually lasts for 3 years. So, if you owed 15,000 to your debt, you would typically repay 6500 over a 3 year period, with the rest being written off at the end. In this period of time you are not allowed loans or credit cards over 200. Protected Trust Deed numbers are rising with over 8,000 people doing one.
The third solution is a thing called a Sequestration, this is a Scottish Legal term for bankruptcy and can allow you to be debt free in 1 year if you are unemployed or have a really low income.
Top tips for choosing a debt advice company
1. Ask questions and get answers that are concrete, the best companies will deliver a good service to you.
2. See if the company has ccl or consumer credit license , this way they are licensed to offer debt solutions and are not someone working from a bedroom.
3. Work with a company who you feel is being straightforward with you and who you can trust
4. Make sure you know how long your payments are, there should be a fixed time period.
5. You should always be offered a no up font fee service, anyone who does isnt acting in your best interests.
Debt advice in Glasgow
Compared to the rest of Scotland, Glasgow has it's more than fair share of poverty, sometimes due to loss of benefits and hours at work , sequestration may be the only option. You may want to avoid this though as it can taint your credit rating for a long period of time and may lead to you not getting work due to your credit status.
People in Glasgow looking for debt help can speak to family , companies with a ccl and should be speaking to a debt adviser who can guide them to the right solution for them.
People in Glasgow seem to fit into the criteria for Trust Deeds with almost 2/3 trust deeds in Scotland coming from the city
Debt solutions in More Detail for Glasgow
We explore the three main debt solutions for people living in Glasgow, Debt Management Plan, Protected Trust Deed and Sequestration.
Debt Management Plan
A debt management plan is a well known plan which allows you to freeze interest and charges on debts for a period of time . It can be over a long period of time and creditors on occasions can hassle you.
The benefits of a Debt Management Plan are;
The debt management companies will talk to all the companies you owe money to and can have more power than you or I do freeze interest
The dmp will allow you a less stressful life as you dont have to deal with the creditors anymore.
One payment each month for all your debts rather than a juggling act each month
The negatives of a Debt Management Plan are;
A Debt Management company would charge you for their service, which you would have to pay directly
You have to repay all of the money you borrowed, which can mean the solution lasting until all money is repaid
It can be negative on your credit rating
Your creditors can change their mind at any stage, even if they agree at the start of the Debt Management Plan
Protected Trust Deed
The Protected Trust Deed is a more and more common debt solution because of its ability to reduce the amount of money repaid to creditors. By making a proposal to your creditors you are saying you cannot repay the money you borrowed but would be willing to pay back a percentage over a period of time. This percentage can be as little as 10% over a 3 year period. Typically a house is secure in a Trust Deed and the insolvency practitioner will only look for the available equity for the benefit of the creditors.
The benefits of a Protected Trust Deed are;
The Insolvency company will liaise with your creditors on your behalf
A Trust Deed is more flexible than Sequestration and less damaging for your credit rating
It's legally binding, so once your creditors accept your proposal they cannot change their mind
Interest and charges will be frozen
You can be debt free in 3 years
The negatives of a Protected Trust Deed are;
If you fail to maintain monthly payments to your Trust Deed you are likely to face Sequestration
Your credit rating will be affected
Your Trust Deed is advertised in a publication called the Edinburgh Gazette
You may have to check your employment contract to ensure you can enter a Trust Deed
Sequestration / Scottish Bankruptcy
Sequestration, or Scottish Bankruptcy, can come if 3 different forms, normal sequestration, LILA route, or certificate of Sequestration. Scottish Bankruptcy is generally a last case scenario, however most people think it's there only option out of debt. With the right expert debt advice, other solutions can be identified.
The three routes to Sequestration are dependent on your assets and how much you earn. If you don't have a house and earn minimum wage then LILA or certificate of sequestration could be the right route for you. Scottish debt specialists who are qualified debt experts would be able to provide tailored debt advice and inform you of what route would be best.
The benefits of a Scottish Bankruptcy are;
Once the solution is in place then no further action can be taken against you
You will make one payment to your Trustee each monthly
You will no longer have to deal with your creditors
You can be debt free in 3 years
The negatives of a Scottish Bankruptcy are;
If you have any valuable items, such as a car then they may be sold. If you have equity in your house then you will probably have to sell your house too
You will have to pay any disposable income to your sequestration
You cannot take out further credit above 250 whilst in Sequestration
You cannot act as a company director for the duration of your Sequestration
by: Absolute
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