routes out of personal debt
Debt Advice for Individuals in Scotland
Anyone can find themselves with debts that they struggle to repay. At the SKSi we understand how money worries affect everyday life and our advisers can help you take control of your finances and get you back on the road to financial recovery.
We understand that facing up to financial challenges can be extremely difficult and stressful. Seeking help is not easy but, from our experience, it really is an important step in improving your financial position.
You should be reassured to know that there are options available and, with the right advice and support, you can look forward to a more financially secure future. We can help you to review your personal circumstances. We can then determine the most appropriate options for your particualr circumstances.
There are currently three formal insolvency procedures available to people with personal debt problems. The law makes no distinction between people with consumer credit debts (credit cards, store cards and bank loans) and those whose debts arise from their trading as a sole trader or in a partnership.
Sequestration (Bankruptcy) is a formal solution and only applies to individuals, whether in a personal or business (i.e. sole trader, partnership, unincorporated business etc) capacity, who cannot pay their debts when they fall due. Many people can fall into this category and sequestration is one of a number of options available.
Protected Trust Deeds
A Trust Deed is a formal insolvency procedure available to individuals no longer able to sustain their debt repayments. It is a voluntary agreement between a debtor and his or her creditors whereby a compromise is reached which allows creditors to recover some of the money owed to them.
Debt Arrangement Scheme
A Debt Arrangement Scheme (DAS) is an alternative option to formal insolvency that was introduced by the Scottish Government in November 2004. Under a DAS, a debtor commits to a debt payment programme (DPP) which allows them to repay their debts based on their disposable income.
Business Debt Arrangement Scheme
The Business Debt Arrangement Scheme is a statutory debt management tool launched by the Scottish Government in December 2014. It was introduced to help partnerships, trusts or an unincorporated body of persons to repay their creditors. The Business Debt Payment Plan (DPP) allows the debtor to pay off their debts over an extended period of time while giving them protection from their creditors taking action against them to recover the debt. .
No matter how your debts were incurred, everyone with debt problems face similar practical issues:
What will happen to my home?
Will I have to make a monthly payment and how will it be calculated?
What will happen to my bank account?
Will bailiffs visit my house?
What will be the effect on my credit rating?
Will my employer find out I am insolvent?
Can I sign my home over to my husband or wife before I go bankrupt?
Can I carry on running a business?
These are some of the issues you should be seeking to discuss with your professional advisers before you decide which option is best for you. It is vital that you fully understand the implications of the course of action you are being advised to take.