An insolvency firm has published a damning report into the state of Scotland’s finances, claiming that 2015 could see 1,000 companies going bust and 12,000 Scottish people declaring bankruptcy. The report, issued by accountancy and business advice firm BDO LLP, is predicting an about-turn in last year’s economic upswing due to issues such as interest rate rises, political uncertainty and a fall in consumer spending.
Spokesperson for BDO LLP, Bryan Jackson, commented: ‘For many companies and individuals there is the prospect of another year of standing still as profits remain flat and incomes are static. The slightest change in any circumstances could have serious consequences. The number of businesses falling into insolvency is likely to be around 1,000.’
Moving on to personal insolvency, Mr Jackson noted that, after a steady decline in bankruptcies since 2009, figures have recently levelled off. And whilst the 12,000 bankruptcies BDO has forecast for 2015 is nowhere near the 2009 peak of 23,541, there is still cause for concern.
Andy Gorton, Managing Director of Scottish debt advice service, Trust Deeds.co.uk, agrees. ‘BDO’s figures equate to 230 sequestrations – the Scottish term for bankruptcy – and 20 businesses going under each and every week in 2015,’ he says. ‘Debt problems are already rife in Scotland, with BDO’s report actually coinciding with a new Government initiative called “Lighten the Load”, which is designed help people cope with financial problems.’
What is sequestration (bankruptcy)?
Sequestration is usually seen as the last resort for dealing with overwhelming debts that you can’t afford to pay off. If you have low or no income and/or few or no assets, it could be an option for you. There are a number of advantages to choosing sequestration, such as:
- You’ll have legal protection from your creditors so they’ll stop pursuing you
- If you can afford to make payments towards your debts, you’ll do this through a Trustee so there’ll be no direct contact with your creditors
- You could leave most or all of your debts behind just 12 months after your sequestration order, helping you make a fresh financial start.
However, as with all forms of debt management, sequestration comes with cons as well as pros. The disadvantages include:
- You could lose your home if you’re a homeowner and be forced to sell any other valuable assets that you own
- You can’t act as a company director, or take any part in setting up or running a limited company
- You’ll find it harder to get more credit during and after your sequestration, and your credit rating will be adversely affected for up to six years.
Alternatives to sequestration
Depending on your situation, other debt solutions may be open to you that mean you can avoid bankruptcy.
These might include:
- A Protected Trust Deed (PTD). This is a formal arrangement that involves paying an affordable monthly amount towards your debts for a set time period, usually four years. During this time, you’ll have legal protection from your creditors and when the Trust Deeds ends, any remaining debts within it will be cancelled. However, at least 50% of your creditors in numbers of 33% by debt value must vote in favour of the Trust Deed before it can go ahead.
- A Debt Management Plan (DMP). This is an informal agreement with your creditors to make reduced monthly payments towards your unsecured debts. A debt management service will usually set up and manage the plan, distributing the payments on your behalf. They can also take over all correspondence with your creditors, but as this isn’t a legally-binding agreement, your creditors could still pursue you in other ways.
- A Debt Arrangement Scheme (DAS). A DAS is a government-run debt management tool that lets you pay off your debts over an extended period of time through a Debt Payment Programme (DPP). There are some similarities to a Protected Trust Deed, such as legal protection from your creditors, and interest and charges on your debts being frozen. However, a DPP can run for any reasonable length of time and is not a form of personal insolvency.
Need debt help? Contact Trust Deeds.co.uk today!
Trust Deeds.co.uk are here to help Scottish people find the best solution to their debt problems. Our friendly advisers can give you access to all the above debt management options and more, depending on your individual circumstances. Simply tell us your story and we’ll talk you through the debt solutions that might suit your needs.
How to contact us:
- Call us today on 0141 301 1170,
- Fill in our online form, or
- Email your enquiry to our expert team.
Sequestration is the Scottish form of bankruptcy. At the moment, it works in a similar way to the system in England and Wales. However, the Accountant in Bankruptcy or AiB (Scotland’s version of the Insolvency Service) is proposing some important changes that you’ll want to know about if you’re considering sequestration as a way of dealing with your debt problems. This article from debt experts, Trust Deeds.co.uk, gives an overview of some of these possible changes.
- The sequestration term may be lengthened
At the moment, discharge from sequestration happens automatically and takes place 12 months after the date you were declared bankrupt. However, the AiB wants to increase this term to 48 months. This would bring sequestration in line with Trust Deeds, which had their length increased from 24 months to 48 months last year.
When you enter into sequestration, your Trustee will decide if you can afford to make any monthly payments to your creditors. Under the current rules, these payments would only continue for three years (you’d still be discharged after 12 months). However, if the proposed changes are made law, you’d be required to make monthly payments to your creditors throughout the four year sequestration period – just like with a Trust Deed.
This means that, if you can afford to make payments to them, your creditors could end up receiving more money than before.
- The automatic discharge system may be abolished
As noted above, discharge is currently automatic unless the Trustee or your creditors have asked the AiB to delay it for any reason. The AiB wants to change this system so that successful discharge depends on your co-operation with the Trustee and compliance with the terms of your sequestration.
The proposals could see the Trustee having to compile a detailed report of your behaviour during the sequestration, plus your financial circumstances at the time of application for discharge. The AiB would use this information to decide whether to approve or decline your discharge.
- Changes to creditor claim timescales
When you’ve been sequestrated, your Trustee will contact all your debtors and ask them to make a claim against your estate. In order to receive payment in the next accounting period, they must respond within eight weeks of the end of the previous period.
The AiB is proposing that this system be changed to one where creditors have 120 days to make their claim, from the date when they were notified by the Trustee. Late claims will only be accepted in exceptional cases and all creditors will be required to support their claims with documentation such as statements or bills. The idea behind these changes is to make it quicker for creditors to start receiving payments from your estate.
- A new tool for calculating your finances
At the start of your sequestration, your Trustee will take a close look at your income and outgoings to work out how much (if any) money you can afford to pay your creditors each month. You should always be left with enough money to cover your essential living expenses, but at the same time, the Trustee has to consider what’s fair to your creditors.
Inevitably, there are inconsistencies between how individuals’ finances are calculated, which can lead to unfairness on one side or another. The AiB wants to improve this situation by introducing a standard financial tool that all Trustees would use to work out each person’s finances in the same way. This would be good news for you, as you’d be sure to be left enough money each month to live on, and good news for your creditors as they’d receive reasonable payment amounts.
- Changes to the Low Income, Low Asset (LILA) route
LILA is a form of sequestration that’s similar to the Debt Relief Orders that are available in England and Wales. The idea is that if you can’t repay your debts and meet certain criteria around having low income and few or no assets, you can apply for sequestration via the LILA route. You’ll be subject to certain restrictions during the term of your bankruptcy and you’ll generally be discharged after 12 months.
The AiB is proposing that LILA be abolished and replaced with MAP, which stands for Minimal Asset Process. This would allow you to be discharged after just six months, but you’d still be subject to restrictions for another six months. As with LILA, there would be criteria that you’d need to meet to qualify, such as being resident in Scotland and showing that you’ve sought professional debt advice before applying. The amount you owe would need to be between £1,500 and £10,000.
Like to know more?
Contact Trust Deeds.co.uk for more information about sequestration, or about the other debt solutions that we offer to people in Scotland. These include Trust Deeds, which are a form of personal insolvency, and Debt Management Plans, which are a less formal solution.
Whatever the size or nature of your debts, we’ll take the time to understand your circumstances and explain the available options. Our friendly, fully-qualified advisers are ready and waiting to help you, so get in touch today.
Contact Trust Deeds.co.uk
A Trust Deed is a formal debt solution that offers an alternative to sequestration (bankruptcy) for people living in Scotland. To qualify, you’ll need to have unsecured debts of at least £1,000 that you can’t afford to repay. When the Trust Deed is in place, you’ll make affordable monthly payments into it for a set period of time, usually two years. After that, all remaining debts listed within it are cancelled.
As our name suggests, Trust-Deeds.co.uk specialise in providing advice and information on Trust Deeds, as well as other debt solutions including Debt Management Plans and sequestration. We’re often asked about how Trust Deeds can be used to deal with joint debts, so we’ve written this article to explain some of the key points you might want to know.
Defining ‘joint debts’
When it comes to joint finances, things can get complicated. However, put simply, a debt is normally considered to be ‘joint’ when two or more parties’ names appear on the credit agreement. An example is a loan or bank overdraft that a married or cohabiting couple takes out together in both their names.
In cases like this, each party named on the credit agreement is seen as being ‘jointly and severally’ liable for the debt. This means that, if one of you can’t or won’t pay any money off the debt, the other party can be pursued for the full amount owing.
A common area of confusion is credit cards. Whilst two or more people might hold cards linked to a single account, responsibility for the entire debt will always rest with the one person who set up the account. So, if your partner uses a credit card linked to your account and they can’t repay what they’ve spent, you’ll be legally obliged to pay off the full balance – even if you’ve never used the account yourself.
Trust Deeds and joint debts
There’s no such thing as a joint Trust Deed, although you and your partner can enter into individual Trust Deeds at the same time to deal with your debts. If you do this, debts that are in each person’s sole name will only appear in their individual Trust Deed, whilst debts that are in joint names will be listed in both Trust Deeds.
Couples often decide to both enter into Trust Deeds for joint debts because, if your partner goes ahead on their own, your creditors can still chase you for the full amount of the debt, minus any payments your partner has already made into the Trust Deed. So the only way to stop your creditors pursuing you might be to set up your own Trust Deed.
How the Trust Deeds will work
Both Trust Deeds will be set up and managed by a Trustee, usually a licensed Insolvency Practitioner (IP). When considering each of your finances, the IP will look carefully at your income and outgoings to see how much you can afford to pay off your individual and joint debts. So if you earn more than your partner but have the same outgoings, you can expect to be asked to pay more off the joint debts.
Each Trust Deed will go ahead if a third of creditors by debt value or half by numbers agree to accept the Trustee’s proposals. At this point, the Trust Deed becomes legally binding for you and your creditors. It also becomes ‘Protected’, which means your creditors must freeze interest and charges on your accounts, and also stop pursuing you for repayment in other ways.
In most cases, a Protected Trust Deed will last for 48 months, provided you make all your payments on time and comply with the other conditions set out in the Trust Deed. When your and your partner’s Trust Deeds have both come to an end, any outstanding joint debts included within them will be written off.
Trust Deeds and your home
If you own your home, you may be asked to remortgage or release equity from it to help repay your creditors as part of your Trust Deed. So if you’re both named on the mortgage, this will apply to both individual Trust Deeds. If you’re unable to release equity or secure a remortgage, the term of one or both Trust Deeds might be extended.
Find out more
For more information about Trust Deeds, how they work and their advantages and disadvantages, please browse our website, www.trust-deeds.co.uk. You can also find out if you qualify for a Trust Deed by completing our simple online form.
Or, please call us on 0141 301 1170 or send us an email if you have any questions you’d like to discuss.
A study by financial auditors, KPMG, has found that around 414,000 Scottish people are earning less than the living wage, which was recently increased by 20p to £7.85. The living wage is different from the minimum wage, which currently stands at £6.50 for adults aged over 21, and is based on standard living costs and income distribution.
According to KPMG, most people in Scotland earning less than the living wage work in the hospitality, retail and care industries. Spokesperson Margaret Butler commented that their figures are an indication that ‘…too many Scottish people are stuck in the spiral of low pay.’ She added that the research ‘…reports the concerns of people earning below the living wage who expect their finances to worsen during the next 12 months and shows that debt levels have continued to rise among this group.’
At the moment, around 60 employers in Scotland have committed to paying their workers at least the living wage. These include SSE, Glasgow Caledonian University and Standard Life. The government is currently funding a pilot scheme, implemented by the Poverty Alliance, to encourage more Scottish firms to sign up as living wage employers, and numbers have tripled over the last three months.
There are certainly benefits attached to paying staff a living wage, such as better retention, productivity and satisfaction levels. Costs to the taxpayer are also reduced, as workers on low pay have their incomes topped up through the benefits system. But despite these arguments, paying a living wage and swallowing the resulting hike in payroll costs simply isn’t possible for many smaller businesses running on tight budgets.
For those not lucky enough to work for a living wage employer, the outlook could be grim. As the Poverty Alliance points out, low pay and in-work poverty are the main causes of child poverty in Scotland. And as Ms Butler says above, those on low incomes now are more likely to see things take a turn for the worse over the next 12 months.
Andy Gorton, Managing Director of debt advice service, Trust Deeds.co.uk, is keen to urge anyone with growing debt levels to get professional help as soon as possible. ‘Trust Deeds.co.uk can help with debts from £1,000 upwards,’ he says. ‘So don’t wait for the problem to spiral out of control – nip it in the bud now and get your finances back on track sooner rather than later.’
About Trust Deeds.co.uk
Trust Deeds.co.uk is here to offer you advice, information and help with your money problems. Our team of friendly, qualified advisers will talk through your situation and discuss the debt solutions that are open to you. We’ll help you make the right choices about managing your debts so you can leave them behind and get on with your life.
Our debt solutions
As our name suggests, we’re specialists in advising on and arranging Trust Deeds. A Trust Deed is a formal agreement with your creditors to repay as much of your unsecured debts as you can afford each month for a set time period, usually 48 months. The agreement is set up and overseen by a Trustee, who is normally a licensed Insolvency Practitioner.
Your Trust Deed will go ahead if 50% by number or 33% by debt value of your creditors agree to the Trustee’s proposals for repaying your debts. If they agree, the Trust Deed becomes Protected, which means that you and your creditors are legally bound by it and interest and charges on your debts must be frozen.
If you then make all your payments on time and comply with the Trust Deed’s other terms, your remaining debts will be cancelled when the agreement comes to an end.
For less serious debts, an informal Debt Management Plan may be an option. We’ll contact each of your creditors to agree a new, lower monthly payment amount and, if possible, to also freeze interest and charges on your accounts.
Once we’ve spoken to all your creditors, your Debt Management Plan will be set up. You’ll only need to pay us one fixed amount each month, which we’ll distribute to your creditors on your behalf. We’ll also deal with their letters and phone calls, taking away much of the hassle of being in debt.
There are no contracts or legally binding agreements with a Debt Management Plan, so you have the flexibility to alter your payment amounts if your situation changes.
If things have got out of hand with your finances, we may ask you to consider sequestration as a way of managing your debts. It’s a formal process that places a number of restrictions and limitations on your personal and working life, so it’s not to be entered into lightly.
However, if sequestration is the right choice, then you’ll have the relief of no further contact with your creditors, as your Trustee will deal with them on your behalf. You could also walk away from your debts in just 12 months and make a fresh start.
Contact Trust Deeds.co.uk today
Get in touch today to find out about your debt management options.
An overview of Trust Deeds
A Trust Deed is a formal way of managing your unsecured debts that’s set up and managed by a Trustee, who is normally a licensed Insolvency Practitioner. As part of the process, your Trustee will look carefully at your finances to decide how much you can afford to pay off your debts each month. They then put together a proposal and send this to your creditors for consideration.
If at least a third (by debt value) or half (by numbers) of your creditors accept the proposal, the Trust Deed will go ahead. At this point, it becomes Protected, which means you and your creditors are both legally-bound by its terms and your creditors can’t pursue you for debt repayments in any other way. They must also freeze interest and charges on your debts.
Once your Trust Deed is in place, you must pay the agreed amount on time every month. If you do this, and if you comply with all the other terms of the Trust Deed, any remaining balance of your unsecured debts will be cancelled when it comes to an end. That’s normally 48 months from the date it was set up – so you could free yourself from unsecured debt in just two years.
However, a lot can happen in two years and it’s sometimes the case that an individual’s financial circumstances change whilst their Trust Deed is in place. You might get a new job with a higher salary. You might receive a financial windfall from a lottery win or inheritance. And on the other side of the coin, your income could go down as a result of unemployment or ill health.
Let’s take a look at the possible effects on your Trust Deeds if one of these scenarios happens to you.
Higher disposable income
This might happen if your income goes up after a job change, or if your expenses are reduced by, for example, a child support arrangement coming to an end.
Unfortunately, you won’t have the chance to benefit from your higher income until your Trust Deed has finished. You’re obliged to tell your Trustee about the change in income and they’ll then decide whether or not your Trust Deed should be varied. If they think it should, they’ll work out a new, higher monthly payment amount with your creditors so you end up paying off more of your debts.
In the majority of cases, the full amount of any windfalls you receive will need to be paid into your Trust Deed. Of course, if the amount exceeds the total amount of your debts and the fees payable to your Trustee, then these will be completely cleared and you can pocket the difference. Even if there’s a shortfall, this could still result in your Trust Deed coming to an end early.
Lower disposable income
The key thing to remember if your income goes down is to tell your Trustee straightaway. Missing one or more payments could lead to your Trust Deed failing, which could be in turn lead to your creditors petitioning for your sequestration (bankruptcy).
Your Trustee will reassess your finances and work out how much you can now afford to pay each month. They’ll then ask your creditors to agree to a revised proposal. You may find that your creditors are sympathetic to your changed circumstances, although they’re not obliged to accept lower payments. Or they might ask for your Trust Deed to be extended so that you still end up paying the amount that was originally agreed.
If the worst comes to the worst and you can no longer afford to pay anything at all into your Trust Deed, it may be cancelled and you’ll need to find another way of dealing with your debts. Your Trustee will advise you on this.
Talk to your Trustee
You’re legally obliged to keep your Trustee informed of any changes to your personal finances, so don’t delay on this if a change takes place. No matter how trivial you think the change might be, your Trustee needs to know about it so they can take an informed decision around whether or not the terms of your Trust Deed should be varied.
Find out more
If you have any questions about your Trust Deed, or think a Trust Deed could be the best option for managing your debts, the expert team at Trust-Deeds.co.uk will be happy to help. Just give us a call on 0141 301 1170 or email firstname.lastname@example.org.
New to Trust Deeds?
If you’re new to Trust-Deeds.co.uk, you can also complete our quick online form with some brief financial details. One of our specialist debt advisers will then call you back to discuss how we can help.
Here at Trust Deeds.co.uk, we’re often asked which is the best option for dealing with debt – a Trust Deed or sequestration? Of course, the answer depends entirely on your individual circumstances, and on factors like how much you owe, the type of debts involved and whether you can afford to make monthly repayments.
This article provided an overview of how Trust Deeds and sequestration work and their respective pros and cons, so you can gain an initial idea of which option might suit you before you contact us for expert advice.
About Trust Deeds
You might want to consider a Trust Deed if you have multiple unsecured debts to different creditors and you have some disposable income to hand. A Trust Deed is a legally-binding agreement that usually lasts for four years, although the term can be as short as 48 months. During this time, you’ll make affordable monthly payments to your creditors. When the Trust Deed comes to an end, any remaining unsecured debts listed within it will be written off.
A Trust Deed can only be set up and managed by a licensed Insolvency Practitioner. They’ll contact all your creditors and ask them to agree to the Trust Deed. If at least 50% by creditor numbers or 33% by debt value are in favour, then the Trust Deed will go ahead. At this point, the Trust Deed becomes Protected. This means your creditors must freeze interest and charges on your accounts, and stop pursuing you for repayment in other ways.
Sequestration is the Scottish form of bankruptcy. Although it’s often seen as a last resort, it will release you from the vicious cycle of debt, enabling you to make a fresh start when your sequestration has been discharged.
To request sequestration, you’ll need to ask an Insolvency Practitioner or approved Money Adviser to look at your finances. If they think you should proceed, they’ll give you a Certificate of Sequestration, which you’ll use to apply to the Accountant of Bankruptcy (AiB). Once they’ve declared you bankrupt, control of your money and assets pass to a Trustee.
The Trustee will decide whether any of your assets should be sold for the benefit of your creditors. They’ll also assess whether you can afford to make monthly payments towards your debts, which might continue for up to three years. Your Trustee will also tell your creditors about your sequestration and, from this point, they’ll deal with all correspondence from and payments to your creditors.
In most cases, your sequestration will be discharged after 12 months and all unsecured debts listed within it written off, except for any monthly repayments that you’re still making as directed by the Trustee.
Pros and cons
Below are some of the key advantages and disadvantages of each debt solution.
- No minimum or maximum debt amounts
- Interest and charges on your debts will be frozen
- You’ll make a single, affordable monthly payment to your creditors
- When the Trust Deed ends, any remaining unsecured debts within it will be cancelled
- You can normally keep your home and any essential vehicles
- You’ll have legal protection from your creditors
- You could be debt-free in just 48 months
- Your career and job prospects won’t usually be affected
- You can’t include unsecured debts
- Your creditors don’t have to accept the Trust Deed proposal
- If you don’t stick to the Trust Deed’s terms, you could be made bankrupt
- You’ll need to disclose any existing debt recovery action that have already been taken against you
- You may need to re-mortgage or release equity from your home
- There’ll be restrictions on your expenditure and ability to obtain credit
- Your credit rating will be adversely affected for up to six years
- Your Trust Deed will be published in the Insolvency Register of Scotland
- You’ll be legally protected from your creditors
- Your Trustee will deal with your creditors and distribute payments on your behalf
- You’ll be allowed to keep essential assets such as furniture and appliances
- You can still enjoy joint assets if you can arrange for a partner, relative or friend to buy your share
- Your sequestration will probably be discharged after just 12 months
- You can make a fresh financial start after your discharge
- Secured loans can’t be included
- You may lose your home or other valuable assets
- You’ll find it hard to get credit over £500 during your sequestration
- Your credit rating will be adversely affected for up to six years
- Your job and career prospects may be affected
- You can’t act as a company director
Find out more
Now you have an overview of Trust Deeds and sequestration and how they both work, it’s time to seek professional debt advice from the experts at Trust Deeds.co.uk. Our friendly, qualified advisers are here to help you find the right answer to your money problems, based on your individual needs and circumstances.
Contact Trust Deeds.co.uk today
You can call us on 0141 301 1170 or complete our simple online form and an adviser will get back to you. Or, you can email us your enquiry if you prefer.
The number of bankruptcies in Scotland has fallen by 20% over the past year.
Even though the number of bankruptcies in Scotland is in decline, the number of people in Scotland seeking alternatives debt solutions is on the rise with approved Debt Payment Programmes being up 40% to 4,632 in 2012- 2013.
The number of companies going into receivership and liquidation in Scotland is also down in 2012 – 2013 with figures from the Bankruptcy’s Annual Report showing a 25.3% drop. In 2011 -2012 there were a total of 1,369 liquidations recorded which compares with just 1,022 liquidations in Scotland in 2012 -2013.
Despite the current financial climate and personal debt being on the rise the figures do relate with the number of Bankruptcies being at their lowest level in a decade and show that people are seeking out alternative solutions to solve their debt problems.
There is a marked rise in the number of people using a Debt Arrangement Scheme or a Debt Management Program, which provides a less severe solution to debt problems.
One other Scottish debt solution on the rise is a Scottish Trust Deed. With a trust deed, the debtor only has to pay off as much as they can afford over a 3 year period. At the end of the 3 year period, any remaining unsecured debt is then written off. This solution can be much more appealing as it does not tend to place the debtors home at risk and the repercussions of a trust deed are less strict.
With the improvement of alternative solutions to bankruptcy and sequestration it is clear that we are seeing a trend of Scottish people looking for ways to avoid bankruptcy.
As per the reports of the Scottish government and the latest survey of the Scottish Household Survey, the personal and household finances of scottish residents have been through a disaster in the years 2009 to 2012 and this has been reflected by the spiraling personal debt level. It was in the year 2012 that scottish residents started feeling positive about their finances as an increasingly large number of people started taking help of the professional debt solutions through which they could rejuvenate their present financial state. In 2012, when asked about their ability to cope with their soaring financial problems, only 5% replied that they were deeply in a financial plight. Thousands of people participated in different debt forums and in a debt community in order to enhance their knowledge on debt repayment in Scotland.
According to the studies and reports, the percentage of households who thought they could manage their finances ‘well’ remained stable throughout 2011 and it was an unsurprising fact that the households with income less than £10,000 were more likely to say that they couldn’t manage their debts well and age also played an important factor while deciding the level of people who were and who weren’t able to manage their finances. If you’re a resident of Scotland and you’re desperately looking for the debt solutions through which you can eliminate your debt burden, you might enhance your knowledge by reading the concerns of this article.
The Debt Arrangement Schemes in the UK – Government’s way of helping the hapless
The Scottish government, on seeing the huge amount of debt level has introduced the Debt Arrangement Scheme or DAS that allows the residents to repay their debt amount in easy and affordable repayment plans. Scottish debtors turn to this debt relief option when they’ve incurred a huge amount on their credit cards and are looking for an alternative debt repayment option. A certified professionals might help the debtor create a DPP or an alternative Debt Payment Program through which you can contribute a monthly payment and gradually move towards a debt free living.
The Basics of a Debt Arrangement Scheme
If you have one or more debts, have enough disposable income after meeting your everyday necessary expenses, you may qualify for a debt arrangement scheme. As per the regulatory restructuring of 2011, those individuals who are not protected through a Trust Deed can also qualify for the DAS. A Money Advisor, who will be an accredited individual can help you with a DAS and also help you locate one. This person will assist you in establishing a DPP in order to repay your debts and will also protect the individual from any negative action from the creditors. The DAS will help you repay the entire debt amount and not at a reduced level.
The Debt Arrangement Scheme in Scotland – How does this work
When you’re repaying your debts through a DAS, you can easily make a single monthly payment and these payments will be issued to a Payments Distributor who will be approved and appointed by your Money Advisor. The individual will disburse off the payments to your creditors and the payment can be in any form. Once you pay off the entire debt, the DAS ends and if you fail to make the monthly payments on time, the deal might also be canceled and you can even lose your funds that you’ve already paid. The Money advisor negotiating with your creditors, frozen interest rates and other charges, an affordable repayment plan and a protection against the covered creditors are some of the benefits that you may reap from this option.
Therefore, when you’re wondering about your soaring credit card debts in Scotland, you can take resort to the DAS repayment plan mentioned above. Make sure you get help from the authentic people who have your best interests in mind.
If you are looking for help and advice with your debts then please contact us on or complete our enquiry form
After being discharged from your bankruptcy, it may be extremely difficult to open a new bank account. The first thing you should do, even if you are in the process of going through a bankruptcy, is to open a basic bankruptcy bank account. These accounts are designed specifically for those with terrible credit ratings such as individuals who have/are going through a bankruptcy.
Step By Step Instructions on Opening an Account after Bankruptcy
By following the steps detailed below, you should little to no trouble opening a bank account after bankruptcy. Remember that these instructions are not a guarantee; they just provide the best guidelines to follow in order to successfully open an account after bankruptcy.
Step 1: Research which banks will actually consider opening a new account for those that have been discharged from a bankruptcy. Finding banks that are not associated with ChexSystems are your best bet. This means that small banks and credit unions will be your best option.
Step 2: You can actually improve your chances of opening an account with banks that use ChexSystems even if your credit rating is extremely low. The best ways to do this are by requesting the bank to remove it from your file if your debt has been paid, and by getting a statement placed on the ChexSystems report that shows you have paid off your debt in its entirety.
Step 3: Before opening a checking account, open a savings account. The majority of banks will agree to open a savings account for you since they will not have to worry about checks bouncing or an individual incurring overdraft fees. If after some time you have successfully maintained your savings account then you may request to have the bank open a checking account for you. This demonstrates to the financial institution that you indeed capable of being responsible for your finances.
Step 4: Obtain a certificate of deposit from a bank and pay in cash. Kindly ask the financial institution to open you a checking account using your certificate of deposit as collateral. When cash is involved, banks are more likely to cooperate.
Step 5: Enroll in financial classes. Some banks actually allow people with low credit ratings to attend classes that discuss the skills you will need in order to keep a checking account current and apply for new accounts.
Alternatives to Bank Accounts
Although some individuals would find it nearly impossible to live without a checking account, it is pertinent to know there are various alternatives out there for you. One of these alternatives would be prepaid cards. Certain cards, such as the Cashplus prepaid Gold MasterCard will actually help you to revive your credit rating, one purchase at a time. The other good thing about this particular card is that it has a 100% acceptance rate. This card does not require a bank account nor a credit check; not to mention, your wages can be paid directly onto the card!
Another option would be managed bank account for those who have undergone bankruptcy. Although there is a small associated with the managed accounts, these accounts are becoming more and more popular since you are guaranteed to be accepted, even as an individual who has gone through bankruptcy.
What Is the Best Option
All in all, it is ultimately up to you to decide what benefits your more. Depending on the individual, different options will be open to different people. If you are unsure still of the best way to go about opening a new account then seek professional help. There is no shame is asking for help when it comes to your future. There are a multitude of banks offering a plethora of options for those who wish to open a new bank account either after or during a bankruptcy. Do your research and you will make the decision that works best for you.
The basic proposal of consolidation loans is combining several higher interest debts in one lower interest debt. Because of low interest one may save up money for basic needs and keep cash for bad times or use that amount to pay off the amount of principal loan.
But there is always a catch, to gain something you always have to take the risk. Consolidation loans, is like digging a big hole to put in the dirt of other tiny holes dug earlier. It only has placebo effect on the person burdened by deadlines and interest on different loans. It mentally relaxes you that you are not answering and addressing to different lenders every month.
One of biggest disadvantage of consolidating loans is finding fair interest rates without hidden fees, if not handled properly and can only make the financial situation worst. Those offering consolidation loans don’t provide proper information on interest till application form is filled, thus leaving little room for comparing the market. A consolidation loan may lead you to pay more in total debt payment even though it has lower interest rate than your existing debts. At a surface, it may seem like you are paying less with smaller month payment and lower interest. But, if you add up the total payments that use to clear the debt, you will find that you are paying much more than if you paid the debts with consolidation.
Consolidation loan is not for everyone, but the companies are full of scam thus if not taken proper guideline and counseling one might end up in a very tough financial situation. With consolidation loans you may be required to give some form of security/collateral e.g. your home, car etc. If due to some reason one loses the job or misses a payment you put your valuable asset e.g. home at risk by missing one payment.
With consolidating loans one ends up owing debts for longer time, thus straining your budget for longer time period and annoying you psychologically. If you had difficulty making your payments on several small loans, you may end up trouble paying one large loan. The biggest disadvantage of consolidation loans occurs when you do not address the problem that brought you into debts/loans at first place. People take out consolidation loan to pay off credit cards and end up using them again, thus making it difficult to manage debts. The debt world is full of unscrupulous people. You may well end up with a loan that has a high interest rate costing you more in the long run. Other debt consolidation businesses may pocket your monthly payments for the first few months leaving your creditors unpaid.
Consolidation loan doesn’t always work as intended. If you get involved with a small lender who goes out of business or passes your loan along to a less than fussy third party, you could find yourself in legal and financial serious trouble. Consolidation loans often can be very risky and nay be a bad idea to take up especially if you are struggling with your debts.
To pay your debts one needs to change the habits, ways of living and how you handle your money. To pay off loans you need to plan, make budget and save. Consolidation loans do not help in saving, planning or budgeting, thus leaving the cancerous cells that caused the disease is still there. Consolidation loans just ease the pain for the time being and hits you hard if not handled seriously and properly.