Each year, people living in Scotland who find themselves struggling to repay their debts search for debt advice in Scotland to help them deal with their creditors.
Although there are several potential solutions available including Trust Deeds in Scotland, Sequestration and consolidation loans, many individuals decide on a debt repayment plan or debt management plan as a way of managing their debts.
Although some debt advisors will always recommend the Debt Arrangement Scheme as being a better solution than a Debt Management plan, we at Debt Advisory Services Scotland would argue that the best solution available depends on the individual’s personal circumstances.
Both debt repayment plans have their own unique advantages and disadvantages which should be considered prior to making a final decision.
Creditor Interest and Charges
Under the Debt Arrangement Scheme your creditors are required to freeze all interest and charges. Although creditors are not obliged to freeze their charges in a debt management plan most of them will providing that the payments are made on time.
Communications with creditors
If you decide to manage your debts using a DPP your creditors are unable to contact with you while your plan is running.
If you select a DMP to manage your repayments your Debt Management company can deal with any communications between you and your creditors, you and your creditors are free to continue to contact each.
Protection for your assets
Providing you continue to adhere to the terms and conditions of your agreement, assets such as your home and car will be protected by the Debt Arrangement Scheme.
Although under a DMP, creditors could take action involving your property, most creditors will avoid taking legal action providing you continue to make your payments on time.
If you enter a Debt Arrangement Scheme your details will be recorded on the online DAS register Which can be accessed by anyone including members of the public. There is no requirement to register a Debt Management plan on any database or public register.
If you miss payments or make part payments resulting in you owing the equivalent of two months payments towards your Debt Arrangement Scheme, your plan can be revoked. If your plan is revoked your creditors can add all the previously frozen interest and charges to your balances that would have been payable had, you not entered the scheme.
Other Solutions to Consider
Debt Management plans and Debt Arrangement Schemes require you to repay your debts in full. As this can result in a long repayment term it may be worthwhile considering an alternative Scotland debt help solution. Trust Deeds in Scotland may allow you to become debt free earlier than any of the debt repayment plans.
Scotland Trust Deeds provide many of the same benefits as Debt Arrangements Schemes but with a shorter repayment term of normally 4 years. Once the agreed repayment term is completed and subject to having adhered to the terms and conditions of the Scottish Trust Deed agreement any remaining debt is legally written off.
Trust Deeds in Scotland may be more suitable for individuals with high levels of debt where a long repayment period would be required to fully repay the monies owed.
Scottish trust deeds are unlikely to be suitable for individuals with high value assets or homeowners with significant equity in their property.
Debt Advisory Services Scotland provide a free financial review service to help identify the best solution for you to deal with your debts. Our review service is completely free and there is no commitment for you to action any recommendations that we make.
If you are worried about your current level of debt and If you are interested in finding out more about the available debt help in Scotland contact Debt Advisory Services Scotland today on 0141 956 4088 or on 0800 011 2322 and speak to one of our friendly and experienced debt advisors
Debt Advisory Services Scotland is regulated by The Financial Conduct Authority No 671573 to provide debt advice to people living in Scotland.
Free advice is available from The Money Advice Service who can be contacted on 0800 138 7777.