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Options for Debt Resolution in Scotland

imagesIt should come as no surprise that consumer indebtedness remains one of the most intransigent problems affecting the citizenry of most developed nations. Scottish society is not immune to these problems, of course, but its people do have a variety of options available for overcoming severe financial difficulty. Here are just a few options for debt management Scotland citizens can choose.

Bankruptcy remains a commonly used option for many who are effectively insolvent. This legal process does come with drawbacks, despite its effectiveness in freeing debtors from unmanageable financial obligations. Not only does it severely weaken the consumer’s credit score, but it carries with it a social stigma as well.

Scottish law provides for less damaging options as well. One of these is the DAS, which is officially known as the Debt Arrangement Scheme. This process provides a solution whereby debtors make payments via a Debt Payment Programme. This not only structures a payment plan to reflect the debtor’s ability to pay, but also helps to protect against creditor legal action.

Trust deeds can be set up with creditors to enable repayment of credit card or loan debts over time. These agreements obligate the creditor to stop the accumulation of additional interest on a debtor’s obligations, while also preventing further legal action against him.

That option rarely provides creditors with full repayment, but it does guarantee at least partial reimbursement of any debts, and establishes a clear time frame during which payments will be made. It also has the advantage of being a better option for creditors than the losses they might incur if their customers file for bankruptcy or seek a complete write-off of the entire debt amount.

While all of these options do entail some damage to a person’s credit score, they also provide one clear benefit that cannot be ignored: they give consumers the financial fresh start they so desperately need.