Debt help Scotland – What help is available?

If you live in Scotland and you owe money to creditors that you can’t afford to repay, you may be researching debt help online in an attempt to get the support you need.

But with so many options available, it can be hard to know which debt solution is right for you.

In this guide, we’ll give you an insight into the debt help available in Scotland, which debt solutions could affect your credit rating, and offer you the information you need to make an informed decision on your journey towards a debt free life.

What is the best way to pay off unsecured debts in Scotland?

Unsecured debts are one of the main types of debt that people in Scotland face. This type of debt includes credit cards, personal loans, store cards, and council tax arrears.

Unsecured debts can cause a lot of financial stress, as they are often high interest and can be difficult to repay.

If you are struggling to deal with unsecured debts, there are a few different solutions that you can consider.

If you are struggling with unsecured debts, there are a number of options available to you.

Be sure to explore all of your options before making any decisions, as each option has its own pros and cons.

Whichever route you decide to take, the most important thing is to take action and start dealing with your debts head-on

Debt solutions available in Scotland

If you’re struggling with debt in Scotland, there are a number of different solutions available to you.

Trust deeds, debt management plans and the Debt Arrangement Scheme can all help you to get your finances back on track.

Scottish Trust Deed

Trust deeds are a form of insolvency, which means they’re only an option if you can’t afford to repay your debts in full.

They’re a legally binding agreement overseen by the Scottish Government.

If you qualify for a trust deed, you’ll make one affordable monthly payment for a set period of time (usually four years).

At the end of your payment term, any remaining debt not covered by your monthly repayments will be written off.

Debt Management Plan (DMP)

A debt management plan is an informal arrangement between you and your creditors, whereby you agree to repay your debts over an extended period of time.

This can be a flexible solution as you’re able to negotiate the terms of the plan with your creditors and suggest a level of monthly payments that matches your budget.

A DMP is suitable for people who have the capability to repay their debts in full but need more time to do so.

Debt Arrangement Scheme (DAS)

The Debt Arrangement Scheme is a government-backed scheme that allows you to repay your debts over a period of up to 60 months.

An approved money advisor will oversee your Debt Payment Programme.

Your payments will be based on what you can afford, taking into account your household income and expenditure, and any interest and charges will be frozen.

Minimal Asset Process (Sequestration)

There’s also the option of sequestration, which is a type of insolvency whereby your assets are sold off to repay your debts.

In Scotland, there is a version of sequestration known as the Minimal Asset Process (MAP). It allows people with little or no disposable income or assets to write off their debts over a shorter period of time.

As always, any form of sequestration should only be considered as a last resort.

If you’re struggling with debt, speak to a qualified financial advisor who can help you to find the best solution for your situation.

Who can help me access a formal debt solution in Scotland?

There are a number of different organisations that can help you access a formal debt solution, such as a Debt Management Plan (DMP).

Debt charity

Debt charities, such as StepChange and National Debtline, can provide free advice and support to help you manage your debts.

As well as money advice, certain debt charities might even be able to place you in a formal debt solution.

You may also be able to speak to your creditors directly to try and agree on more affordable repayment terms.

Debt management company

Alternatively, you could contact a debt management company who will work on your behalf to negotiate with your creditors.

If you are struggling to repay your debts, it’s important to get professional help as soon as possible.

This will give you the best chance of finding a sustainable solution that meets your needs.

The benefits of seeking professional help for your debts

Dealing with debt can be a difficult and stressful experience. If you are struggling to make ends meet, it may seem like there is no way out.

However, there are many benefits to seek professional help for your debts.

Get debt help tailored to your financial situation

A debt specialist can work with you to create a debt repayment plan that is tailored to your individual circumstances.

This may include negotiating with your creditors to lower your payments, interest rates, or fees.

As a result, you will have more disposable income each month to cover your basic living expenses.

In addition, a debt specialist can also provide valuable support and advice to help you get back on track.

Seek professional help for your debts today and start taking steps towards financial freedom.

Will accessing debt help hurt my credit rating?

Using a debt solution will damage your credit rating in the short-term

When you take out a professional debt solution, such as a debt management plan (DMP) or Trust Deeds, details of the debt will normally be recorded on your credit report for six years.

This may have an impact on your credit rating and make it more difficult to obtain credit in the future.

Credit reference agencies will also be notified that you have entered into a debt solution.

Debt solutions can also protect your credit score in the long-run

It is worth noting that having a good repayment history with your debt solution provider can actually improve your credit rating in the long run.

Therefore, although professional debt solutions may have an initial impact on your credit rating, if you maintain regular repayments they could eventually help to improve your score.

Always start by getting free debt advice

If you’re struggling with debt, there are a number of types of help available to you in Scotland, each with their own pros and cons depending on your circumstances.

It can be difficult to decide which of these debt solutions is best for you.

That’s why yo should always make sure you seek professional debt help before you move forward with a formal debt solution.

At Creditfix, we’ve helped over 182,000 people across the UK deal with their debt.

To get expert debt advice from a debt adviser you can trust, get in touch with Creditfix today on 0800 0431 431.