Bank finance articles and tips

There are few things worse than the feeling of having debts that you can not pay. While sometimes they are a product of poor decision making, sometimes they are just because of bad luck or timing. Either way, you need to get out from it and stop the harnessing phone calls and such. If you are in Scotland you are in luck.

The reason why people in Scotland are lucky when it comes to debt is that the government has been proactive about helping debt ridden people. This has kept the average amount of debt lower than it is in the rest of the U.K. Also, because the Scottish legal system is independent from the U.K. they have more favorable options.

There are a number of avenues you can take to pay off your bills. Each solution is best suited for certain people with certain financial problems but one of the best solutions is the Protected Trust Deed. These are different from the LILA sequestration which is for people with low income and nothing in the way of assets. It is better and prevents sequestration and almost 9,000 Scots a year take advantage of it.

There is something in England, Whales, and Northern Ireland that is similar and that is called an IVA, Individual Voluntary Arrangement however the Protected Trust Deed is still much better and to understand why you need to understand the Protected Trust Deed more.

Protected Trust Deeds are used as a way of remaining solvent after other avenues have been exhausted. You are trying to repay your unsecured debt but it is just not going to be possible. What happens is that all your unsecured debt is collected together. Notice that this is unsecured debt. This means that your mortgage is not part of this. It is for credit cards, store cards, and unsecured credit lines.

Once these debts are compiled, the future trustee of your Protected Deed Trust will broker out an arraignment that the creditors will be satisfied with and leaving them to write off the remaining debt. It is not ideal for the lenders but they know a little bit is better than nothing.

Once the arraignment is put into place, usually in about six weeks, you will get one one monthly bill. You will stop getting letters and phone calls from the creditors (under penalty of law) and you will the payments for the next three years. That is two years shorter than the 5 years under the U.K.'s IVA.

The Protect Trust Deed does not totally leave you free and clean after it is gone although the debts will be a thing of the past. It will make an impact on your credit. That will follow you for 6 years till that too becomes something in the past. It is still better than totally defaulting on all your unpaid debt.

James McCallum is a debt adviser for Trust Deeds Scotland, offering free debt help and services. For more information on Protected Trust Deeds and Trust Deeds Scotland, get in touch.

By James McCallum
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