Avoiding bankruptcy in Scotland

If you are being pursued by creditors and Sheriff Officers, it can feel like an immensely stressful time. In Scotland, there are a number of debt solutions that are readily available to people who are struggling with their debts and facing bankruptcy.

It is important to understand that Bankruptcy in Scotland, known as Sequestration is designed to help a person free themselves from crippling debts, and is used by 1000’s of Scottish residents each year to clear debts that have stopped them from living their lives. However it still has a stigma attached to it that many people are uncomfortable, embarrassed and reluctant to utilise as a way out of debt. Luckily there are other options available that can help you avoid Sequestration.

A Trust Deed offers an alternative to Sequestration and has become the most popular method for Scottish residents getting out of debt. It works by paying an affordable amount back to your creditors each month through an appointed Trustee who acts on your behalf and deals with your creditors.

A Debt Arrangement Scheme allows you to pay your debts back over a longer time and in a more manageable manner. You may currently not be able to keep up with payments but could yield a smaller amount each month freeing up money to live your life more easily.

Before deciding which route to take it is important to ask yourself a few questions. Understanding your financial health will help you and also let your money advisor guide you more appropriately.

Firstly, can you afford your monthly payments? You may feel that you can maintain payments to your creditors but are not making a dent in paying them back. Perhaps you have missed the odd payment which might have already shown up on your credit report. Whatever your situation may be it is important to do a monthly income and expenditure to see if you can budget for paying your debts back. A Money advisor can help you with this and give you an idea of how long it will take to pay your debts back. If it looks like you will be paying back your debts over an unfeasible amount of years, then you could explore formal debt solutions that could help you escape debt in as little as 4 years.

Sequestration is not the end of the world. If anything it gives you the opportunity to start again and stop creditors intimidating you or Sheriff Officers turning up at your door. Try our debt calculator to get an idea of the options that are most suitable to your situation.