There are several debt solutions exclusively available in Scotland: the Debt Arrangement Scheme (DAS), the LILA (Low Income, Low Assets) route into bankruptcy and the Trust Deed.

Let’s take a quick look at each of these three Scottish debt solutions, and find out how they work and who they’re designed to help.

Debt Arrangement Scheme (DAS)

Do you have one or more unsecured debts? Can you no longer afford your monthly repayments? If your answer is yes, entering the Debt Arrangement Scheme (DAS) could be the ideal approach for you.

If you qualify for DAS you could begin a Debt Payment Programme (DPP) if your lenders agree to this. As part of the agreement, you’ll begin making single monthly payments, calculated to be affordable on top of your essential living costs. Your lenders will each get a portion of these payments, and won’t take any further legal action against you (as long as you keep up with payments into your DPP), and if you’re a homeowner you won’t risk losing your home (as long as you keep up with payments to your mortgage).

Entering a DPP under DAS will, however, damage your credit rating for six years – which could make getting further credit difficult during this time.

Trust Deeds

If you have a significant amount of unsecured debt, and you can no longer afford your monthly payments, a Trust Deed may be able to help you.

It’s a legally binding agreement which, once agreed with your lenders, could reduce your monthly payments to an affordable level (taking your essential costs into account), stop your unsecured lenders taking any further action against you, and write off any outstanding debts included in the Trust Deed, once it reaches a successful conclusion.

Furthermore, you’ll have a date you’ll know you will/should be debt-free: usually after three years. However, a Trust Deed will affect your credit rating for six years (which can make getting further credit in this time difficult), and if you’re a homeowner you may have to release some of the equity in your home.

LILA route into bankruptcy

The LILA route into bankruptcy, which stands for ‘Low Income, Low Assets’, is an alternative route into bankruptcy for struggling borrowers. See debtadvicenow.co.uk/lila-low-income-low-asset/ for more information.

To qualify for the LILA route, you must:

• Earn no more per week than the standard national minimum wage for a 40-hour working week, which currently stands at £237.20
• Have no assets worth more than £1,000 individually, or £10,000 in total.

Again, the LILA route into bankruptcy will have a major impact on your credit rating for six years – but it could still be a suitable approach for struggling Scottish borrowers who need the benefits of bankruptcy (such as a write-off of the debt they can’t afford to repay).

In today’s small business landscape, the options for getting money as needed have really diversified and grown. Every year, there are unique new products and new providers offering your business loans and leases, lines of credit, merchant cash advances and more. They are willing to go where the piggy bankers never did – they offer you flexibility and a chance.

Piggy banks on your tabletop are not a good way to save in business either – you want to keep re-investing back into the business, diversifying your strategies and making yourself impenetrable and impervious to shifting market conditions.

The best thing for you to do, is to research these options long before the need ever becomes articulated in your small business. Know what the offers are, who provides them, and how quickly they can be used to make money appear in your account. These items will let you match the proper vehicle and provider to the need you are facing. This is a powerful place to be as a business owner – and will help you to whether any storms that the economy, or your customers might throw your way.

This type of debt help usually refers to one of the following services: consumer credit counselling, debt management, home refinancing, loan consolidation, or credit card debt settlement.

Focusing on credit card debt specifically, such a service can provide this for you: they will combine all of your debt into a single, manageable monthly payment and in turn pay off your credit cards individually. Debt management such as this helps to relieve the stress of several monthly bills in the mail, and trying to keep track of all your payments. It is also a good option for those who are hounded by credit card calls for missed or late payments. So if it’s time to get some debt help, trust the experts and consolidate your debt.

Professionals in this field explore with the client the merits and demerits of debt consolidation. They help the client understand all options available to them in restoring their financial stability.

When the basics are grasped, the counselor proceeds to evaluate the particular circumstances of the client. This will entail a detailed study of all monthly obligations including budgeting for food, utilities and other basic necessities. The total outgoings are compared with the income to assess whether debt consolidation is the most feasible method of improving a client’s financial status.

While most debt consolidation counseling agencies are legitimate, there are unscrupulous elements who are more interested in pressurizing the individual to sign for a debt collection scheme. They mention the benefits but remain silent on the drawbacks or other options open. A client feeling pressured should seek financial counseling before entering into any arrangements.