Assistance with Debt in Scotland
- At RMS Financials, we offer IVAs through a licensed insolvency practitioner regulated by the Insolvency Practitioners Association, providing comprehensive information on debt solutions without direct financial advice.
Trust Deed
In Scotland, a Trust Deed enables you to consolidate unsecured debts into a single, manageable monthly payment.
- You possess disposable income available for monthly payments.
- You have a minimum of £5,000 in outstanding debt.
- You are having difficulty meeting your current repayment obligations.
Trust Deed - FAQs
Secured vs. Unsecured
A Trust Deed requires the consumer to make a single monthly payment towards their debts, usually over a four-year period, though this duration may vary.
A Trust Deed is considered ‘Protected’ when creditors do not object to the IVA proposal submitted by your creditors.
Advantages of a Trust Deed
- A Trust Deed generally lasts about four years, after which any remaining debt will be discharged.
- They do not require court proceedings to be established.
- Your debts will be consolidated into a single manageable monthly payment.
Disadvantages of a Trust Deed
- If it remains unprotected, some creditors will still have the ability to reach out to you for repayment of the money you owe.
- Your credit score will be adversely affected for six years starting from the date you enter the scheme.
Debt Arrangement Scheme (DAS)
A Debt Arrangement Scheme is an official solution supported by the Scottish Government.
- You have a consistent amount of disposable income available each month to allocate towards your debts after covering essential expenses.
- You aim to eliminate your debts entirely with a single manageable monthly payment.
- You are concerned about the potential loss of your home and assets through alternative solutions.
Debt Arrangement Scheme - Common Questions
You will not need to liquidate your assets to settle your debts.
Creditors will suspend your interest and charges for the entire duration of the scheme.
You will enter a Debt Payment Plan (DPP), through which your debts will be fully repaid by the end.
There are no fees involved in setting up or maintaining a DAS.
Your plan will continue until you have completely settled your debts, which may take longer than other plans.
You will commit to paying off your debts in full, making it unlikely that any will be discharged by your creditors.
Are you finding it hard to manage your debt?
Gradual Payment Plan
In response to the Coronavirus pandemic, the Scottish Government launched the Low and Grow Debt Arrangement Scheme in 2021.
This initiative is designed to support individuals facing temporary financial hardships. It allows an accredited money advisor to petition your creditors on your behalf to lower your payments for a duration of three months. After this period, your financial situation will be re-evaluated to decide if an extension is necessary.
Since this is a short-term solution, it is not meant to last longer than six months.
Insolvency
Under this scheme, a Trustee manages your finances and may liquidate your assets to repay creditors.
The application fee for sequestration is £150, payable to the Accountant in Bankruptcy (AiB), the body responsible for personal bankruptcies in Scotland.
If you have debts of £10,000 or more, your creditors have the right to petition for your bankruptcy.
Sequestration might be suitable for you if:
- You have limited or no ability to make consistent payments to your creditors.
- You are carrying a minimum debt of £3,000.
- You possess assets that can be liquidated to pay off your debts.
Insolvency - FAQs
The process typically takes one year, after which your debts will be discharged.
It will stop creditors from pursuing you for payments.
Most debts can be eliminated through sequestration, with some exceptions, including debts incurred fraudulently, student loans, and court fines.
Your assets, including your home, may be liquidated to satisfy your creditors.
Although the process lasts one year, the sequestration will negatively impact your credit report for six years.
A full application fee of £150 must be paid before your application can be processed.
Debt Suspension Period
The Debt Moratorium in Scotland, similar to Breathing Space, relieves creditor pressure and has been extended from six weeks to six months for added support.
How Can I Apply?
Scottish residents can apply for a Debt Moratorium to halt creditor actions while exploring potential debt solutions, such as a Trust Deed or a Debt Arrangement Scheme.
You can submit the application directly to the Accountant in Bankruptcy yourself. However, it is recommended to seek professional debt assistance beforehand. A Debt Advisor can apply on your behalf, guiding you through all available options you may wish to consider during this period.
RMS Financial assists over 3,000 individuals in the UK each year.
Our team of specialists helps thousands of families regain control of their finances through an IVA.
Is an IVA the right choice for you?
We can evaluate your eligibility for an IVA.
Would you rather discuss this later?
We are here to provide support in helping you find a solution.
