Personal debt solutions
There are times in everyone’s life when challenges arise and often these can have a knock on effect on your finances. Our personal debt experts are on hand to help you review your options and deal with your situation in the most appropriate way.
You may have been made redundant, suffered a downturn in work, a bad debt or simply reached the stage where the debts you have built up have become unaffordable.
Whatever the reason, if you have problems with personal finance, you should seek advice as soon as possible. The sooner you do, the more options will be available to you and the quicker you can find a personal debt solution.
What are the options?
Depending on the circumstances of your personal debt, there will be different avenues open to you and all have drawbacks as well as benefits to be aware of. Below are some of the debt management options we will discuss with you.
Cut your outgoings: A detailed budget will help you to review all your expenditure and where savings may be possible. For example, check that you have the best deal for house and car insurance and that you are using the cheapest utilities provider. Cut out any monthly direct debits that are not essential.
Re-mortgage: If you have equity in your property, then re-mortgaging may help you to deal with unsecured lending. However, this route is only likely to be available if you have a low level of mortgage compared to the value of the property and your credit history is still very good.
Debt consolidation loan: Debt consolidation involves taking out a loan to pay off some or all of your existing debts.
Debt arrangement scheme: This can assist you stopping creditors enforcing legal action and giving you time to pay with looming court orders. If the proposals are deemed fair and reasonable the creditors cannot block the scheme becoming effective. All interest charges and fees are frozen from the date of approval and written off on completion.
Protected Trust Deed: This is a formal proposal administered through a Licensed Insolvency Practitioner in Scotland to legally write off the debts you are unable to pay to your creditors. You would normally have unsecured debts in excess of £8,000 and qualify where your income cannot meet your debt repayments after allowing for normal day to day living expenditure. You only pay back what you can afford after living expenses, normally for a three year term. The remaining debt is then written off.
Trust Deed: Under this voluntary arrangement a Trustee takes over all correspondence with creditors, relieving pressure on you. Over a three year period, all payments you make are to the Trustee, rather than all your creditors.
Sequestration: This occurs where a creditor successfully raises a court action against you to obtain money that you owe and have made little or no repayment. You will be appointed a licensed Insolvency Practitioner who administrates on behalf of your creditors to recover any assets to repay all or part of the debt. These assets could include a house, car, valuable goods, investments etc.
Review our glossary of terms.