Though the media has been peppered with reassurances that the UK is in recovery, the aftershock of the global recession is still an everyday factor for many people. Our finances don’t feel as secure as they once did and people are constantly on the lookout for ways to be frugal and sensible when it comes to organising their cash and dealing with debt.
Particularly with the looming referendum on possible Scottish independence and several scare-mongering stories about potential pitfalls of debt and higher taxes awaiting a Britain-free Scotland, concern has been raised as to the ways Scottish resident can protect themselves should such a situation ever arise. In light of this, here are some ways which are known to be effective in assisting those with debt problems that are exclusive to the people of Scotland.
Debt Payment Programme
The Debt Arrangement Scheme (DAS) was established to help people with debts they can no longer afford to pay by helping them to set up a Debt Payment Programme (DPP) with the lenders in question. Under the initiative, a new repayment plan will be drawn up, interest will be frozen and your lenders will be unable to take legal action against you, relieving the pressure somewhat and allowing you to focus on getting debt free. Bear in mind that it will negatively affect your credit rating and the smaller payment level will mean you remain in debt for longer overall, so it is not an easy way out by any means.
If your debt becomes unmanageable, it can feel stifling and panic can begin to set in. With trust deeds however, you can get the help you need to get back in control of your finances. It is a form of insolvency that will allow your repayments to be scheduled around your essential outgoings (such as rent, food, heating, council tax, etc.). Following the successful conclusion of your Trust Deed, the remainder of your outstanding debt will be written off. It is worth remembering however that your credit rating will be affected for at least six years, making it potentially difficult to secure further external financing and homeowners may in some cases be required to release some equity.
Low Income, Low Asset bankruptcy
In severe cases of debt, filing for bankruptcy may seem like the only viable option left but the process can be tricky, especially if your lenders are unwilling to accept your proposal to do so. If this is the case, you may be able to qualify for LILA (Low Income, Low Asset) bankruptcy. Generally speaking, you will be able to apply if you don’t earn above the national minimum wage and have no single asset worth more than £1000, or total assets worth less than £10,000.
Scottish Debt Advice
Even with various options presented to you, sometimes knowing how best to act in times of financial hardship can be daunting and overwhelming. You can however get debt advice in Scotland that has been specifically tailored to help the country’s residents and be relevant to the economy within Scotland itself. Be it talking you through some of the aforementioned schemes in more detail or presenting you with other advice on how best to cope in your specific situation, there are experts out there who are willing and able to help, meaning you don’t have to face debt alone.