Alongside trust deeds and sequestration, a debt arrangement scheme is one of the main debt solutions for people in Scotland. Here’s all you need to know about debt arrangement schemes.
If you need a helping hand to get out of debt, a debt arrangement scheme could be a good option for you. Debt arrangement schemes, endorsed by the Scottish government, are designed to help you pay back your debt at regular, manageable intervals – without the threat of legal action hanging over you. Debt arrangement schemes are for individuals and businesses.
With a debt arrangement scheme you repay your debt through what’s known as a debt payment programme.
If approved for a debt arrangement scheme, you commit to the debt payment programme through which you will pay back what you owe in regular instalments. Importantly, your repayment plan will be based on your disposable income, so will be manageable payments.
Through a debt arrangement scheme, you will be protected from your creditors taking action against you to recover the debt. When the debt arrangement scheme is in place, all interest and fees are frozen and will be written-off if you fully complete the debt payment programme.
For individuals, debt arrangement schemes can last for a ‘reasonable’ length of time. For businesses, they last for 5 years maximum.
Debt arrangement schemes include unsecured debts like: Credit cards, Bank loans and overdrafts, Council tax arrears, Utility bill arrears.
Debt arrangement schemes do not include secured debt like mortgage debt.
Length – trust deeds last for 4 years. After this time, any remaining debt is paid off. With debt arrangement schemes, they last until all your debt is repaid.
Amount of debt – to qualify for a trust deed, you must be in at least £5,000 of debt. For debt arrangement schemes, there is no minimum debt level.
Contact an expert money advisor at Trust Deed Scotland to find out more about the debt solutions available to you. We are here to help you decide the best course of action to suit your individual needs and support you every step of the way. If you would like a fresh start, get in touch today.