Trust Deed Scotland – A practical guide to tracking down your debts and finding out how much debt you actually have.
When you pick up the phone for a free consultation with our expert team, one of the questions we will ask you is “how much debt do you have?”
This is a seemingly simple starting point, but many don’t actually realise how much debt they really have. Some compartmentalise their debt and avoid the total figure: it is more reassuring after all to say “I have a mortgage of £30,000, credit card balance of £3,000 and a car hire purchase of £10,000,” than it is to say “I am £43,000 in debt.”
Others underestimate small purchases and loans, which add up to more than you would think over time; and others have simply never kept track of their credit reports.
Debt can be far more expensive than you think, especially when you add collection agencies, interest and added fees into the equation.
On our debt info hub, we regularly mention that taking the first steps to putting your house in order can be daunting. From our experience, a major part of this fear is facing up to how much you actually owe and how to find out.
Tracking down how much you owe is the first crucial step in sorting your debt, we’ll show you how in this guide.
NOTE: Our Trust Deed Wizard tool can do this for you automatically, without needing to carry out these steps manually. Start the process here.
Tracking Down Your Debts: our step-by-step guide
Step 1: List what you can
Ordinarily, you should know who you owe a balance to – if the account has been assigned or sold to a collection agent, they will have called, emailed or sent you a letter. tracking down your debts and be made more difficult as the original debt gets passed around – the older and more delinquent a debt becomes; the higher possibility it’s been passed around and sold off to a number of debt collection agencies.
This can easily happen when you move address and forgot to tell the original lender and any subsequent agencies. Don’t feel bad about this, it happens. Not only does this happen with our debts, but our dentists, doctors and any marketing literature from anything we’ve ever bought over the last few years as well.
First things first then when you’re looking to track down your debts, you’ll need to scour through your mail, bank statements, voicemail and email inbox to get your list of creditors started.
Pro Tip: use online banking, and go straight to the canceled direct debits section. A list of canceled payments will likely help add some info you may have forgotten to your list.
Step 2: Review your credit reports
It’s now time to start double checking your list and filling in any blanks with help from your credit report. Most loan accounts (such as credit cards, hire purchases, payday loans) are reported to the major credit reporting agencies. The three largest credit reference agencies in the UK are Equifax, TransUnion, and Experian and they all provide a free service for you to conduct an annual check. All the information you need that you may not have been able to find or remember for your list so far should be available here.
The original creditor may report the debt as a ‘past-due account’ or a ‘charge-off,’ and the name of the collection agency that is trying to collect it. Relevant contact information should be provided, so you can reach out to them directly if you need more information.
Pro Tip: Use all three of the free services mentioned to ensure the best chance of a complete picture. Some information may be on one but not the other two.
Step 3: Get in touch for confirmation
Your list should now be just about complete. Have a final check through letters, bank statements and emails and a final think for anything you may have forgotten that hasn’t appeared for whatever reason.
From here, go down your list and get in touch with each creditor and confirm with them that they are in control of the relevant account or whether they have sold or re-sold it. As a word of warning, when calling a collection agency as opposed to an original creditor, despite the official sounding company name, the agent you get on the phone with will not be a lawyer or chartered accountant. They will most likely be a call center worker with sales training and a monthly target. They may attempt to get you to make a payment over the phone ASAP. If this is not affordable for you, do not hesitate to hang up the phone after you have gathered the information you need.
Pro Tip: In the case of council tax, accounts are ‘assigned’ as opposed to ‘sold.’ This means that agents for the council can recall the account to their control on a whim and will accept payment over the phone directly if you explain your situation and demonstrate a willingness to pay in the near future. This could save you 10-20% in additional charges the collection agent will demand.
You should now have a complete list of your creditors and outstanding balances in front of you. Add these together for the overall figure, and you now have the full picture of your total debts. For many, this figure can be higher than their annual salary and more drastic measures than debt consolidation or gradual repayment may be necessary. This is where we come in, and can offer a government legislated option.
The Protected Trust Deed, and DAS Scotland, our specialist services are binding agreement between you and your creditors, overseen and administered by an Insolvency Practitioner (IP.)
The Trust Deed allows you to repay your debts in a single, reduced monthly payment distributed to creditors by your IP. In time, the Protected Trust Deed will give you the financial fresh-start we have been able to offer over 20,000 people in Scotland.
For a detailed, free consultation with one of our expert advisers, get in touch today on 0141 221 0999 or find out if you qualify in just 60 seconds.