Category: Money Advice

What Is Debtember?

Posted on by Craig Stocks
#Debtember is a campaign message run by the Money Advice Hub. In any typical year, December is often a tough month for people with unaffordable debts in Scotland, a month that creates extra pressure for households to spend money on Christmas gifts. With 2020 being an exceptional year, with us being in the middle of a pandemic, many money advisory groups and debt charities are concerned about those who are already living with unaffordable debt at this time of year ending up in a worse position in 2021 and beyond. Added to this are fears around the increase in both the usage and promotion of buy now, pay later loan arrangements offered by the likes of Klarna, Clearpay and Paypal with increased online shopping activity overall leading to more impulse purchases. The Money and Mental Health Policy Institute said: “Online retail can be a lifeline for people living with mental health problems who may struggle to leave the house, especially during the pandemic. But pushy sites and tempting buy now, pay later offers can cause people to spend more than they can afford, risking both their financial and mental health.” Britons collectively spend up to £1bn every month on impulse buys, according to a survey last year by 118 118 Money. While mental health, mood and personality all play a role in that, consumer psychology is increasingly being used to shape our choices online reports the Guardian. If you are struggling to repay your debts, we would advise you to seek help as soon as possible. However, the #Debtember guide is a really useful starting point to help you consider what your options are before you explore more formal debt solutions in Scotland such as Trust Deeds and the Debt Arrangement Scheme.

Stage 1: Explain your financial situation

  • Start with your personal household details.
  • The types of debt, how & when they started?
  • Any emergency debts you have?
  • Let your creditors know you are getting help.

Stage 2: Draw up a detailed budget

  • Check your income less essential living costs.
  • Identify any priority debt you must pay.
  • Discuss budgeting & income maximisation tips.
  • Consider any essential assets you own.

Stage 3: Find out your debt options

  • Discuss any entitlement to charitable help.
  • Check your liability for debt.
  • Compare formal & informal debt solutions.
  • Confirm any eligibility criteria.

Stage 4: Choose a suitable debt solution

  • Consider any application fees involved.
  • Do you need to protect any essential assets?
  • How long will the debt solution last?
  • Pick an affordable, maintainable debt solution.

Stage 5: Organise your future finances

  • Make sure you have a basic, safe bank account.
  • Set up any debt repayments you need to make.
  • Plan for future life events affecting your money.
  • Think about budgeting & savings longer term.

#Debtember response

Trust Deed Scotland® said: “We think that following the #Debtember guide is a worthwhile exercise for anyone who feels that they are troubled by debt. Should an individual be able to follow this guide and resolve their finances with their creditors by themselves, then we welcome that. If anyone doesn’t feel like they are able to face their debts alone, we would advise them that we’re here for them and that they shouldn’t hesitate to get in touch with us should they have any concerns over their debts. The worse thing that anyone with unaffordable debts can do is to ignore them.” You can get more information on #Debtember by following the #Debtember hashtag on Twitter, Instagram and Facebook. Check the Money Advice Hub website for more information also. Money Advice Hub is a not for profit community interest company providing free debt advice and other related advice topics.

New Year, New You?

Making a New Year’s resolution to do something about your debt may seem like an excellent starting point. However, if you have unaffordable debts then you really should weigh up any perceived advantages of waiting for a few weeks, versus the actual advantages of asking for help sooner. In recent radio awareness campaigns, we’ve previously said that ‘If you do something about your debt today, you can stop worrying about it tomorrow.’ Depending on the severity of your situation and the potential action that may have already begun against you, perhaps this wait is too long for you. Are there any pending wage arrestments for example? Or, perhaps you have fallen behind on a few bills which can be resolved amicably with your creditors before any such action takes place.

Get help with unaffordable debts today

You can get Scottish debt advice today by calling Trust Deed Scotland® on 0141 221 0999 or by completing our Trust Deed Wizard® form. Our experienced advisors give friendly, confidential and non-judgemental debt advice that covers the advantages and disadvantages of all formal debt solutions open to Scottish residents. Over 98% of reviewers gave Trust Deed Scotland® a rating of 5/5 on Trustpilot, based on over [reviews] reviews. Since 2009, we’ve advised over [volume] people in Scotland to manage their debt and take their first step towards a brighter future..

55% of Young Scots Losing Sleep Worrying About Debt

Posted on by Craig Stocks
A poll commissioned by the registered debt charity Christians Against Poverty (Scotland) found that 55% of young Scots aged 16-34 are losing sleep worrying about their personal finances with almost 60% revealing that it is negatively affecting their mental health. The survey, conducted by Savanta ComRes, a market research consultancy based in London, surveyed over one thousand Scots and said that 54% of those in the 16-34 age category did not know where to access free debt help. Speaking in regards to the findings of the survey, the National Director of Christians Against Poverty Scotland, Emma Jackson said: “We know that the economic effects of the pandemic have had a particular effect on young adults. With significant job losses in retail, hospitality and entertainment, it is understandable why large numbers are feeling so worried about their finances. “Many are experiencing debt for the first time and are unsure of what to do. Our message is clear, we urge everyone experiencing problem debt to seek free debt help today.” Trust Deed Scotland said: “We’re aware of the impact that having unaffordable debt can have on the mental health of those who have problem debt, and how that stress can also impact their wider family life. Not only do we see this same trend amongst younger Scots, but among all age groups. As an organisation who have advised over 25,000 Scots from all walks of life, a regular response to our five-star rated TrustPilot reviews talks about how our clients are once able to sleep again at night after a debt solution has been put in place for them. As there is also a stigma attached to being in debt, many people who do have problem debt will avoid seeking help and ultimately attempt to struggle on alone. In agreement with Christians Against Poverty Scotland, we understand the effect of having unaffordable debt has on the frame of mind of any individual who is experiencing financial difficulties and we’re also advising those who are struggling with their unaffordable debt to seek debt help immediately. Our experienced debt advice team at Trust Deed Scotland give non-judgemental, friendly tailored debt advice for residents of Scotland. If you’re struggling with debt, call us on 0141 221 0999 in confidence.”

Problem Debt and Mental Health links

Debt and mental health are frequently linked. In a study conducted by The Money and Mental Health Policy Institute, it was revealed that there were over 1.5m people in England experiencing both problem debt and mental health problems. People with problem debt are significantly more likely to experience mental health problems:
  • 46% of people in problem debt also have a mental health problem.
  • 86% of respondents to the survey of nearly 5,500 people with experience of mental health problems said that their financial situation had made their mental health problems worse.
    • The survey also found that people with mental health problems found that, while unwell:
    • 93% spent more than usual
    • 92% found it harder to make financial decisions
    • 74% put off paying bills
    • 71% avoided dealing with creditors
    • 56% took out a loan that they would not otherwise have taken out.
People with mental health problems are also more likely to be in problem debt:
  • 18% of people with mental health problems are in problem debt. People experiencing mental health problems are three and a half times more likely to be in problem debt than people without mental health problems (5%).
  • 72% of respondents to Money and Mental Health’s survey said that their mental health problems had made their financial situation worse.
Problem debt may not typically always happen overnight caused by a drastic change in circumstances. In some cases, what may begin as a niggling doubt over meeting monthly payments can lead to sleepless nights. Unfortunately for some, an eventual spiral occurs as debts become no longer affordable. Problem debts develop, increasing the likeliness of developing a mental health issue as a result. Closer to home in Scotland, the Herald and more specifically regarding small business owners, the Glasgow-based newspaper recently reported that in a study of 1,200 companies done by the Federation of Small Businesses (FSB) in January 2021, it found that 40% of respondents are worried about their mental health.
  • 30% said repaying debt was weighing on their mind
  • 44% were worried about the financial sustainability of their family.
Small business owners worried about their finances and looking for self-employed debt help are also urged to contact Trust Deed Scotland on 0141 221 0999.

How we’re helping people with debt who are having sleepless nights

Every year, Trust Deed Scotland empower thousands of people in Scotland to deal with their finances and go on to enjoy life after debt. Having received over [reviews] five-star rated debt advice reviews, over 130 of our clients in their own words specifically mention being able to sleep again at night, after receiving help with their unaffordable debts from us. We’ve compiled a selection of our reviews below. In January 2021, J Smillie wrote: “Vicky was great from start to finish. I now have my life back and able to sleep at night again.”   Also reviewing Trust Deed Scotland in 2021, Edwin wrote: “From the first contact, I have been dealt with sympathetically and professionally. All options were explained thoroughly and questions answered. This has lifted a great weight off my shoulders which affected my work life as well as my personal life. Thank you Trust Deed Scotland, I can sleep at nights now.” Another 2021 Trust Deed Scotland client said: “For the last year, I have been suffering so much with stress and anxiety over my money worries. I couldn’t sleep, I was so down and crying at least once a day as I couldn’t see a way out the hole I got myself in. I got in touch with Vicky and I cannot praise this girl enough she was so understanding with my situation and got me finally on route to a debt free life. Thank you so much, Vicky, you are a credit to your company.” In 2020, Claire said: “I was recommended to Trust Deed Scotland by a work colleague as I was well over my head with debt, it was affecting my health mentally and physically. I plucked up the courage to seek advice, I spoke with Jacqui Richardson who made me feel so at ease, she didn’t judge me, she explained everything to me from start to finish, kept me updated every second day, it was the best decision I have ever made! No need to feel embarrassed, if you are looking for the best advice, please please give them a call, at least now I can sleep at night.” I would like to thank Jacqui for everything she has done for myself and my family, If there were more stars to be given, they would certainly deserve them.” K McDonald wrote of their Trust Deed Scotland experience in 2020: “Soreena has been amazing. Never judged me and has helped out so much. For the first time in many months, I’ve been able to have a full night sleep. I can’t thank her enough for all her help.” In 2019, Mr Smith said: “After two years of non-stop worry and no sleep, it was affecting everything I did 24 hours a day. Eventually plucked up the courage to do something about it. One phone call my mind was put at ease. I am now in the middle of a plan being put in place which means I’m going to be back in control. Thank you Trust Deed Scotland.” Katrina left a review in 2017 where she advised: “Danielle at Trust Deed Scotland was Superb, understanding informative clearly answered all questions in plain language keeping me up to date every step of the way. Thank you, I can manage to sleep at night.” Donna, a client that Trust Deed Scotland helped in 2016 said: “If you’re feeling stressed out & getting deeper into debt, struggling to repay your debt. I would 100% recommend Trust Deed Scotland. They are all so friendly and don’t make you feel like a bad person. My husband and I were just getting deeper into debt and didn’t see any solution to get out of it, it was just building up. We contacted Trust Deed Scotland and they made us feel at ease and totally stress free right away, I would recommend a trust deed to anyone struggling with their debt. We now have low monthly payments which are so much easier to afford and we will be debt free in 5 years. We can now sleep better at night and see a better future.”

How to get Scottish Debt Advice today

If you’re worried about your finances and would like to take control of your unaffordable debt, you can contact Trust Deed Scotland on 0141 221 0999, or use our online Trust Deed calculator  tool for more information. As a leading provider of formal Scottish debt solutions including Trust Deeds, and the Debt Arrangement Scheme, our experienced debt advice team are able to work with you and offer tailored debt advice that puts you at the heart of the decision-making process.

What is an Employer Salary Advance Scheme?

Posted on by Craig Stocks
For an increasing number of cash-strapped Scots, a fairly new solution to short term money problems has emerged in the shape of Employer Salary Advance Schemes (ESAS). Companies such as Hastee and Wagestream have emerged as the leading providers of Employer Salary Advance Schemes, a new form of Payday Loan, albeit without the infamously high interest rates that their predecessors had, that can allow individuals to access up to 50 percent of their wages before their usual payday. While it is highly unlikely that an individual may have built up problem debt exclusively with an ESAS, they’re more likely to become an issue for people already experiencing financial difficulties. The main concern with the ESAS is that, if used regularly, the fees can add up to a significant amount. Despite these fees often being between 0-5% of the loan provided, over time this can accumulate rapidly. Therefore, without realising, ESAS borrowers can be paying hundreds of pounds in fees if they use ESAS multiple times. Another concern area with ESAS is the potential for its borrowers to become reliant on the service. If used continuously throughout the year or even over a few months, ESAS can cause budgeting to become focused on two payments a month instead of one. E.g. having to borrow early in the following month as their ‘final salary’ has been reduced by repaying the previous loans. As a result, anyone considering borrowing through their employer’s ESAS system should be careful about how often they are using them to get through periods of financial difficulties.

Can Employer Salary Advance Schemes result in an unaffordable debt problem?

In short, yes, Employer Salary Advance Schemes can become part of an eventual unaffordable debt problem for people who have been given access to funds but not correctly assessed for affordability. In a similar way to the likes of payday loans previously, An ESAS can push people with unaffordable debt into a problem debt cycle. It is therefore anticipated that these Employer Salary Advance Scheme services will be regulated, like the payday lenders they aimed to replace, or more recently like Buy Now, Pay Later lenders such as Klarna and ClearPay. Whilst still in their infancy, ESAS lenders predominantly work with hospitality, retail and healthcare employers. The regulatory body said that they are seeing new providers joining the market and expect the sector to expand in the next few years. In July 2020, the regulatory body issued a statement that warned of a lack of transparency around costs, and the likelihood of workers making repeat withdrawals and becoming dependent on the services to make ends meet. The regulator said that while ESAS products do have benefits, it is important that employees and employers are aware that there may be some risks in using ESAS lending services that could result in Employer Salary Advance Scheme debt issues further down the line. Lack of credit regulation. The regulatory and statutory rights and protections, from which borrowers under consumer credit agreements benefit, do not apply, as ESAS usually operate outside of credit regulation. For example, ESAS providers have no obligation to check affordability. Therefore, employees will need to satisfy themselves that they will have enough money on payday to pay other expenses they may incur at that time (for example their mortgage or rent payments) when they receive the balance of their normal salary. The high-cost short-term credit (HCSTC) price cap on charges does not apply either, and the Financial Ombudsman Service will not be able to consider complaints. Lack of transparency about cost. The amount of the transaction fee might be a modest sum. However, there is a risk that employees might not appreciate the true cost and how this compares with credit products such as loans. Employees may find it difficult to compare the fixed transaction fee charged for each drawdown to an interest rate/APR. In some cases (depending on the amount of the advance and when it is used in the pay cycle) this may result in it being equivalent to an interest rate that is higher than the price cap for payday loans and other forms of HCSTC. This can become particularly expensive if an employee uses the product repeatedly Dependency and repeat use. If an employee takes their salary early, it is more likely they will run short towards the end of the next payday, potentially leading to a cycle of repeat advances and escalating fees. Lack of visibility for credit reference agencies. Credit reference agencies will not record use of the product, so creditors who subsequently carry out credit searches won’t necessarily be aware that the customer is using ESAS. This may in some cases be relevant to creditors’ assessment of credit or affordability risk and might result in unaffordable loans being made. In February 2021, the regulatory body followed up on the regulation of ESAS loans and highlighted a couple of examples: Paul, an ESAS user that spoke to the regulatory body said “I would like to keep it personal and my employer not to know. It could affect your progression.” Emily, who also spoke to the regulatory body, but who isn’t a current ESAS borrower said: “I wouldn’t really want my employers to know that I’m struggling with money every month.” The regulatory body further warned that “Where ESAS providers also offer regulated credit products or at least act as a broker, there is a potential conflict of interest. If poor use of an ESAS creates a need for credit, for example, to cover a shortfall in wages at the end of the month, the provider could profit from this if they offer alternative credit products. However, given the size and scale of the market, it would be disproportionate, at this time, to introduce a bespoke regulatory regime. Unlike BNPL (Buy Now, Pay Later), ESAS is not a form of credit relying on a legal exemption, and would therefore require a significant regulatory change to be brought within the perimeter. Although the review has identified a number of risks of harm associated with the use of these products, the Review hasn’t seen evidence of crystallisation or widespread consumer detriment. Nonetheless, the market should continue to be monitored and if the position changes, the question of bringing ESAS within the regulatory body’s remit should be reconsidered.” In their defence, Wagestream claimed that “data clearly shows employees use Wagestream responsibly – with 93% of employees accessing less than 30% of their available wages – as it is their hard-earned money they are spending on emergency expenses, not falling into a cycle of credit and debt.” Hastee told the Guardian newspaper last year that “Safety and governance are baked in with wellbeing algorithms monitoring a user’s shifts, earnings, deduction frequency, deduction amount, and the type of spending, others in the industry may be regulated because they provide some sort of consumer credit, or control payroll, which Hastee does not.” Hastee also advised that any “unusual behaviour” will mean users are directed towards charities like the Money Advice Service. Speaking on improved regulation of the Employer Salary Advance Scheme borrowing, Trust Deed Scotland said: “These schemes can help employees deal with unforeseen expenses and occasional short-term cashflow when used in the right way. However, we’re pleased that the regulatory body has committed to investigating ESAS products in the same way that they’re currently exploring the lack of regulation around Buy Now, Pay Later products. Like guarantor loans before them and BNPL products more recently, there are of course many thousands of people who use these products on a regular basis without falling into a debt trap, however, there are also many thousands who have developed problem debt as a result of those products not being correctly assessed for affordability. And, we must also stress that there is currently no alarming trend with Employer Salary Advance Schemes developing into unaffordable debt. We welcome any opportunity for these services to be regulated fairly by the regulatory body before any such Employer Salary Advance Scheme debt problem can be allowed to happen.”

The demise of Payday Loans?

Payday loans have become significantly more regulated than they were since they first started to appear in the mid-noughties. Arguably the most famous rise and collapse of a payday lender was that of Wonga.com, created in 2006 by co-founded by South African tech entrepreneurs Errol Damelin and Jonty Hurwitz. Before going into administration, Wonga, once boasted of being able to get cash into a borrowers account within 15 minutes. However, this was often with little or no affordability checks being put in place. With many thousands of customers forced into taking on unaffordable debts. Wonga.com collapsed in 2018 with administrators for the lender revealing that as of 2020, that 389,621 eligible claims had been made since Wonga’s demise. The average debt owed to a payday loan in their peak of 2013 was £1,657 according to the Debt Charity Stepchange. However, many other payday loans companies do remain open and operate in Scotland, including Lending Stream. Mr Lender and Satsuma Loans among others.

Get Tailored Debt Advice today

If you’re worried about your finances and would like to take control of your unaffordable debt, you can contact Trust Deed Scotland on 0141 221 0999, or complete our Trust Deed Wizard tool to begin your debt help journey today. As a leading provider of formal Scottish debt solutions including Trust Deeds, and the Debt Arrangement Scheme, our experienced debt advice team are able to work with you and offer tailored debt advice that puts you at the heart of the decision-making process.

Post-Pandemic Financial Recovery Plan Required

Posted on by Craig Stocks
Scotland’s fightback against the Coronavirus will require a post-pandemic financial recovery plan, with many people still unclear on what their long-term financial future will look like according to new statistics published by The Money Charity. Previous known as Credit Action, and established in 1994, the Money Charity is the UK’s Financial Capability charity, proactively providing education, information, advice and guidance to people of all ages throughout the UK, helping them to manage their money well and increase their Financial Wellbeing. As Scotland continues to recover from the pandemic alongside the rest of the UK, the new UK-wide data shows that:
  • 61% of self-employed individuals have a worsened financial situation due to the pandemic.
  • 4.5m workers in the UK were furloughed in January 2021 as a result of the pandemic. One-third of which have been furloughed for ten or more months.
  • A 454,000 increase in the number of people unemployed in the year to December 2020.
  • The average total debt per household, including mortgages, was £60,860 and per adult was £32,014, around 107.5% of average earnings.
  • People in the UK owed £1,696.4 billion at the end of December 2020.
The Money Charity further reported that based on December 2020 numbers, the UK’s total interest payments on personal debt over a 12month period would have been £44,910 million, an average of £123 million per day. The average annual interest per household would have been £1,611, and per person £848, 2.85% of average earnings. According to the Office for Budget Responsibility’s November 2020 forecast, household debt of all types is forecast to rise from £2.062 trillion in 2020 to £2.373 trillion in 2025. This would make the average total household debt £83,308 (assuming household numbers track ONS population projections.)

Consumer Credit Debt

At the end of December 2020, outstanding consumer credit lending was £202.1 billion, falling by £1.4 billion on the revised total for the previous month, and £22.2 billion less than in December 2019. Within the total, outstanding credit card debt came to £58.4 billion, a decrease of 19.3% (£14.0 billion) in the year to December 2020. Credit card debt averaged £2,094 per household and £1,101 per adult. A credit card on the average interest rate would take 24 years and 10 months to repay, making only the legal minimum repayments (interest plus 1% of the outstanding balance) each month. The minimum repayment in the first month would be £54 but would reduce each month. If £54 were paid every month, the debt would be cleared in 5 years and 2 months. Citizens Advice Scotland advised The Money Charity that in January 2021, they answered almost 10,000 calls in January 2021 alone, where the enquiry was related to debt. The biggest group was in regards to benefits, which equates to almost 32,000 of their January calls which ultimately, may lead to more longer-term requests for help relating to unaffordable Problem Debt. A stat that is made more worrying given that CAS currently is facing a fight of its own, as it struggles to find funds that will allow the service to remain open in a face-to-face capacity in areas of Glasgow such as Bridgeton, Easterhouse, Parkhead and Castlemilk. In January 2021, the Money and Pensions Service predicted that demand for Debt Advice is expected to increase by 61% in 2021. All eyes both north and south of the border will be focused on Rishi Sunak’s budget announcement later this week when the Chancellor will come under great pressure to elaborate on the country’s post-pandemic financial recovery plan. And, with Scottish parliament elections scheduled for May this year, a similar theme may emerge.

What help with unaffordable debt is available in Scotland?

To find out more about managing your money and getting free advice, visit Money Advice Service, an independent service set up to help people manage their money. You can also receive free, impartial debt advice from your local Citizens Advice Bureau, Stepchange and other debt charities, as well as tailored debt advice from ourselves, Trust Deed Scotland® You can contact Trust Deed Scotland today by calling us on 0141 221 0999.

Advice on your options today

If you do something about your debt today, you can stop worrying about it tomorrow. Our experienced team provide tailored debt advice that is…
    • Non-Judgemental – Our friendly, helpful team want to help find a solution that suits your needs.
    • Confidential – We do not share your details with any other companies. Your data is safe and secure.
    • Experienced – 25,000 people helped and over 3,000 five-star reviews on Trustpilot.
    • Tailored – Pros and cons of all formal solutions explained.
Trust Deed Scotland® offer formal Scottish debt solutions such as Protected Trust Deeds and the Debt Arrangement Scheme. If you have unaffordable debt, we can advise on how they work, advantages and disadvantages and alternatives. For life after debt, trust us.

Debt Snowball vs. Debt Avalanche

Posted on by Craig Stocks
The debt snowball and debt avalanche techniques are two ways of paying off your debt without utilising a formal debt solution. This is an alternative self-administered solution for residents of Scotland who are experiencing financial difficulties.

Alternative Debt Consolidation methods in Scotland

It’s always possible that a person can negotiate with creditors themselves and secure a short-term debt management plan, or voluntarily agree to pay off a debt over a longer-term. Sometimes without much of an impact against the individual, or in the case of more long-term arrangements, more commonly in the form of default notices being served as an indirect consequence. A default notice itself can have a negative impact on a persons credit history. Trust Deed Scotland® offer debt solutions including Trust Deeds and the Debt Arrangement Scheme and experienced advice on alternative Scottish debt solutions which may include the Minimal Asset Process route. The benefits of undertaking one of these solutions may include:
  • Reducing payments to an affordable level
  • Freezing interest and charges
  • Stopping creditor harassment over non-payment
  • Writing off unaffordable debt
The key to understanding what options are open to an individual and how they can clear their debts is to seek help from a qualified money advisor – this will then ensure that the individual receives transparent, balanced advice and that the pros and cons of each solution are fully explained. If you have unsecured debt and you’re finding these debts unmanageable – you can find out more about government-created debt management solutions available to you. A Trust Deed is only possible when you have over £5,000 of unsecured debts but you could still consider the Debt Arrangement Scheme if you have debts under that level, or indeed Minimal Asset Process if your situation is severe enough to warrant this as a solution. Depending on the individual’s credit rating, income and existing assets – There is the option of a debt consolidation loan which is often secured against a property, or it may be possible to secure a new credit card or lending source at a lower APR%. Using a secured loan against property may allow you to get a loan at a more competitive rate, particularly if you already have a bad/poor credit rating but your home is at risk should you not be able to afford repayment. Ultimately, whatever way works best for you will help you to realise your dream of enjoying a life after debt.

Debt Snowball vs. Debt Avalanche – What’s the difference?

If you’re determined on tackling your debts yourself, don’t need help with debts and have a large enough, disposable income that allows you to do so then you can investigate the two methods known as the debt snowball and debt avalanche systems. Both debt repayment plans are useful and help you regain control of your finances again, however, they both require a serious commitment from you and an element of frugal living. The truth is that the two methods are almost exactly alike in that they both ask you to pay minimum payments on all your debts except for one focus debt. The only difference between the snowball and avalanche is the order that you will pay off your debts. Some personal finance writers argue that one is better than another – but it’s really a matter of personal preference. With either method, you’ll send the creditor every extra penny you can find until the focus debt is paid off. As long as your total debt is going down then either is good.

What is the Debt Snowball technique?

The debt snowball technique involves making minimum payments on all debt, then paying off the smallest debts first to get them out of the way before moving on to bigger ones. The architect of this technique and coined phrase is the American personal finance guru Dave Ramsey. It is a debt reduction strategy that results in you paying off debts in order of smallest to largest. when the smallest debt is paid in full, the money you were paying to that debt rolls on to the next smallest debt you have. When you use the debt snowball technique, you will gain the instant feel-good factor of clearing a debt and moving onto the next.

What is the Debt Avalanche technique?

The debt avalanche technique involves making minimum payments on all debt, then using any remaining money to pay off the debt with the highest interest rate. The debt avalanche technique can often result in lower payments over time. The debt avalanche technique involves making minimum payments on all debt, then using any remaining money to pay off the debt with the highest interest rate. Using the debt avalanche to pay off debt will save you the most money in interest payments. For example, if you have £2,000 extra to devote to debt repayment each month, then the debt avalanche technique will make your money go the furthest. Say for example that you have the following debts: • £10,000 Royal Bank of Scotland credit card debt at 18.99% • £9,000 Capital One credit card debt at 3.00% • £15,000 Halifax loan debt at 4.50% In this example, the debt avalanche technique would have you pay off your RBS credit card debt first, then allow you to pay off your remaining debt in 11 months, paying a total of £1,011.60 in interest. The debt snowball technique would have you tackle the Halifax loan first, managing your debt in 11 months, but you would have paid £1,514.97 in interest. By switching the order of your debts, you can save hundreds of pounds in interest payments. For individuals with larger amounts of debt, the debt avalanche technique can also reduce the time it takes to pay off the debt by a few months.

Priority vs. Non-Priority Debts

Before you would commit to either debt repayment technique you would work out your income and then also take into account your priority and non-priority debts. This is vital as it is not advisable to ignore your priority debts such as council tax simply because it’s not interest-bearing. Ignoring priority debts may seem like a way of getting your debts paid quicker but are more like to result in serious consequences for you and your family if you stop paying your mortgage or rent.

Persistent Debt Caution

When you read up more on the debt avalanche and debt snowball techniques, it’s easy to get carried away with the idea of a debt repayment plan that can be self-managed, and that’s ok to feel that way. However, as these are largely American concepts, one major aspect you must factor in as a resident of Scotland is the rules around persistent debt. What’s persistent debt? You can find out more about persistent debt in Scotland but essentially, if you only make minimum payments for a period of 18 months on your credit cards, store cards and catalogues, your lender may suspend the service and ask for full repayment due to rules introduced by a UK regulatory body. However, you will be notified of this in advance and you may still be able to negotiate a debt repayment plan with the lender.

Debt Repayment Plan Advice In Scotland

Trust Deed Scotland® offer a confidential, non-judgemental debt advisory service that aims to help people in Scotland get themselves out of the severest of financial difficulties. A self-administered debt repayment plan such as the debt snowball or debt avalanche methods may be beyond your reach and a more formal debt management solution is required. In which case, we’ve helped over [volume] people in Scotland who were in a similar position and of those people, almost 3,000 left a debt advice review on the independent reviews platform Trustpilot. The difference between many of the companies advertised on Facebook or Google and Trust Deed Scotland® is that our advisors are based in-house and work directly with those who implement the solutions, ensuring continuity in your journey and that your details are not passed onto anyone else. We’re also experts in Scottish debt advice whereas an individual based in a call centre in the rest of the UK, or overseas may know as much as about debt help in Scotland as the piece of paper in front of them, also known as their sales script! And, as we have the correct authorisation and commitment to training and compliance – we’ll always have your best interests at heart. Some of those companies may attempt to sell you a solution that makes more sense for them, but it may not always be in your best interest. Get started today by trying our Trust Deed Wizard® tool or call us on 01412210999.

Help With Unaffordable Debts In Scotland

Posted on by Craig Stocks
When looking for help with unaffordable debts in Scotland, and you have unsecured debts over £5,000 – You can find out more about Trust Deeds and whether one may be right for you. The Debt Arrangement Scheme is a solution for many people in Scotland also and is possible for those with debt levels below £5,000 and above £5,000 as well For those with the most severe financial difficulties in Scotland – the Minimal Asset Process is an option for those who are facing Sequestration but have either no income or a low income. In addition, they have little, or no assets. In order to make a decision on the right Scottish debt solution for you, we would always recommend talking to a qualified money advisor. You may not need help with unaffordable debts in Scotland when you have one or two individuals debts, and you haven’t missed any payments and it’s possible that the creditors can be contacted with a simple self-negotiated debt repayment plan. However, if you feel your debts have become unaffordable then these questions may help you drive your decision.
  • Are you being harassed by creditors?
  • Can you no longer afford to pay any more than the minimum payments?
  • Are you missing payments to priority bills in favour of your non-priority bills?
  • Have you exhausted all other realistic means of paying back your debts?
If you have answered yes to most of these questions, then it’s likely that you are going to need more formal help with your unaffordable debts. Call us on 0141 221 0999 or find out if you qualify for debt help.

Help with unaffordable debts in Scotland and inspirational stories

Some people may put off getting help with unaffordable debts in Scotland due to the stigma attached to having debt, and feelings of shame and embarrassment. In our debt advice reviews, we hear many positive comments from our clients, who speak warmly about the friendly, non-judgemental advice that they receive from our advisors. In August 2020, K McDonald wrote “Soreena has been amazing. Never judged me and have helped out so much. For the first time in many months, I’ve been able to have a full night’s sleep. I can’t thank her enough for all her help” Another client, Neil, who reviewed us and gave us a 5/5 rating and wrote “A very friendly, experienced company who helped myself out with financial difficulty. Trish was excellent, non-judgemental, and put my mind at ease all the way through the process. Highly recommend to anyone whos feeling the pressures of financial strain.” Briony wrote a review saying “Vicky was amazing! Such a weight off my shoulders, I have been worrying about my debts for a while and was taken through my options when I decided what would be the right decision for me I was helped through it all She was so understanding and polite amazing service.” Kristopher wrote a review saying “At a very difficult time they gave great advice and made a very hard embarrassing phone call easier and my advisor Matthew stayed in touch with me every day to keep me updated.” Holly, writing a review about our advisor Jacqueline commented “Lady that assisted me was very helpful and easy to talk to would highly recommend this company.” Whenever we speak to or clients, we encourage them to have a look through our reviews when they are seeking help with unaffordable debts in Scotland. Not only are we proud to say that we’re the No.1 rated company in the debt relief service category of Trustpilot but also it helps people to understand that they are not alone, not only in a sense that we’re here for them at the other end of a phone, but also that many other people were going through the exact same rollercoaster of emotions; stress, depression and anxiety and have since come out the other end saying things like they feel a weight from their shoulders, or that they can sleep at night. For a brighter future, trust us. If you do something about your debt today, you can stop worrying about it tomorrow. Call 0141 221 0999 to get started, or try our online debt repayment calculator tool, also known as the Trust Deed Wizard®.

Is your home blacklisted if you start a Trust Deed?

Posted on by Craig Stocks
A concern for some of our clients is whether their home is blacklisted if they start a Trust Deed. Only individuals have a credit rating. Your credit rating is personal to you and the property itself is not ‘blacklisted’.
  • As a homeowner, your property is not blacklisted.
  • As a tenant, your landlord’s property is unaffected. This is also true of any housemates that also reside in a property.
  • If you’re married, or in a civil partnership – The other party in the relationship is not affected by your credit.
  • If you live with your parents, they or any other family members are not affected either.
However, if you have joint borrowing, joint accounts, or a guarantor loan for example, in this instance the responsibility to pay the debt falls onto the other party. In which case, if the debt isn’t paid, then that would impact their credit rating. You can find out more about Do Trust Deeds affect a spouse or partner. These myths exist partly because of mistruths online but also because debt collection agencies use this is a threat to demand payment, using any means necessary. When we have unaffordable debts, it’s only natural to worry about how our own finances affect those around us and together with the stigma attached to having debts, this creates a toxic perception of how bad the situation is. The fear of a home being blacklisted as a result of our own actions and our own unpaid debts is enough to deter many individuals in Scotland from seeking help over their debts. If you are putting off getting help because of how you think it may impact those around you then we suggest having a read through our [volume]+ Trustpilot reviews, where many people talk about the same kind of fears and how they found the strength to do something about their debts. As we often say to our clients – If you do something about your debt today, you can stop worrying about it tomorrow. We’ve previously written about your credit score and debunked credit score misconceptions.

Does a Trust Deed affect my Credit Rating?

There’s no getting away from the fact that starting a Trust Deed, a Debt Arrangement Scheme or Sequestration will have a detrimental impact on your credit rating. It will take a while to rebuild your credit rating once the solution has been complete meaning that obtaining credit will become harder, and interest rates will not be favourable. However, with careful planning – many people have gone on to get mortgages after a Trust Deed has ended. A clear signal that a negative credit score can be overcome. When you are researching whether a Trust Deed is a good idea, then a credit rating may be an important factor for you. Where possible you can consider fixing your credit rating without having to consider a formal debt solution. You could consolidate debts using a loan or additional credit facilities. However, we would always advise against about borrowing your way out of debt and would instead suggest that you discuss your circumstances with a qualified debt advisor in order to find out what your options are. Getting yourself further into debt in order to protect the home being blacklisted, while meant with great intentions, isn’t required and will almost always result in a bigger problem with your debt further down the line.

Do I need to tell my landlord about my Trust Deed?

No. your landlord does not need to be informed about your debt repayment arrangements. However, should you wish to take on a new tenancy with a different landlord, a credit search may be undertaken. Firstly, we’d advise you to be upfront about it before you approach the new landlord or letting agency for a new tenancy. Secondly, if you have already been served default notices and missed payments – consider your credit score in this instance. Whether you have unaffordable debts, or not – you should never pay non-priority debts over priority debts such as a mortgage or rent. if you have a good record of never missing a rental payment then you can, of course, use this as proof that you are a reliable tenant.

Getting help with debt in Scotland

You can get debt advice in Scotland today by calling Trust Deed Scotland® on 0141 221 0999. Our qualified debt advisors have been helping people out of debt since 2009 and over twenty thousand people have been able to enjoy a brighter future thanks to the solutions we’ve put in place for them.

What is Zombie Debt?

Posted on by Craig Stocks
Halloween 2020 is set to look different than any other in Scotland with the Scottish Government asking us to avoid guising and thus help prevent spreading Coronavirus. Residents of Scotland with old debts beware: a forgetful moment from your past could results in old debts rising from the dead and coming back to haunt you. Zombie debt. So, as we’re at home this Halloween, we’ve put together a guide to help you understand more about what you’re options are. Helping you to avoid having a night of the living debt.

What are Zombie Debts?

Zombie debts are old accounts that may have been forgotten about and then either written off as ‘uncollectable’ and which have passed the time in which they can legally be collected. These can be anything from an old payday loan to a credit card debt. Even an old library fine. Depending on the type of debt and how old the debt may be, you may be in for a nasty surprise, or it may become unenforceable due to becoming a Prescribed Debt, known more commonly across the UK as Statute Barred.

Are my statute barred debts written off?

A regulatory body say that it’s not fair for a creditor to keep asking you to pay a statute-barred or prescribed debt if you’ve told them you don’t intend to pay it. In Scotland, If the creditor waits too long, the debt will become prescribed. Once a debt is prescribed, the law says it no longer exists so there’s nothing more the creditor can do collect it. This is outlined as part of the Prescriptions and Limitation (Scotland) Act 1973. Statute barred debt in England refers to a debt that’s not enforceable because the time a creditor has to chase payment has passed. This is outlined under the Limitation Act 1980. In England, Wales and Northern Ireland where under the Limitation Act 1980, a creditor has six years to chase most unsecured unpaid debts or twelve years for some mortgage shortfalls. This ‘limitation period’ starts from the time of your last payment or acknowledgement of the debt, not the total length of time you’ve been making payments. The Limitation Act 1980 act states that when all of the following conditions are met a debt cannot be enforced:
  • The creditor has not registered a CCJ against you (Known as a Decree in Scotland)
  • You have not made a payment in the last six years (or with joint debts, the other person)
  • You have not admitted the debt in writing in the last six years
  • Where it’s a mortgage shortfall, the latter two restrictions are doubled to 12 years.
For most types of debt in Scotland, the prescription period is 5 years. Mortgage capital shortfalls have a longer prescription period of 20 years for the money that you borrowed while the interest charged on this has a prescription period of 5 years. Council tax and overpayment of social security benefits are also subject to a prescription period of 20 years. If your creditor has already started action to obtain a Decree before the prescription period passed, the debt can’t become prescribed.

How did I get a Zombie Debt?

Zombie Debt comes in many forms, including legitimate debts that have been forgotten or ignored, Identity theft cases and I.T. errors. The most common way of this happening is a combination of change of address, change of telephone and changed bank details. With no little way of knowing, we assume the debt has been paid and eventually may believe that we paid it off. If you have built up a zombie debt and forgotten about it, don’t feel bad about it – it’s an easy oversight to make. But, if you have forgotten about a debt you are protected from harassment or any other contact from the creditor. You cannot be pursued through the courts, as the debt is deemed to have either been abandoned or repaid. It involves unsecured credit from credit cards, store cards and the likes of council tax arrears. It does not apply to secured debt such as mortgages and money owed to the government for income tax, property tax, fines and student loans.

Help with unexpected debt?

If you have unaffordable debt, whether it’s from an old Zombie Debt, or more recent – You should always look for expert debt help in Scotland. You can find out more about Trust Deed Scotland and find out why we’ve become the No.1 rated company in Trustpilot‘s debt relief services category. If you are struggling with debts, we’re here for you. You’re not alone. Find out more about what is a Trust Deed in Scotland or about what trust deeds do, call us today on 01412210999 for friendly, non-judgemental advice.  

Debt and Mental Health

Posted on by Craig Stocks
Debt and mental health are strongly linked. Over 25% of Scots experience a mental health issue in any given year. That’s not including the added impact caused by Coronavirus in recent times. Mental health issues cover a range of experiences, including anxiety and depression, schizophrenia, phobias, as well as many other conditions. Experiences of mental health conditions can also change over time, and sometimes even from day-to-day. Mental health issues, like physical illnesses, vary greatly from person to person. Mental health issues can be for short periods of time or last much longer. Experiencing a mental health issue does not automatically mean that you are unable to manage your money or deal with your debts, but it can make it more difficult. Research shows that half of adults in Scotland who are struggling with severe money issues, also have a mental health issue. Having unaffordable debt can be stressful and we can help you can help deal with your creditors. Both debt and mental health issues have increased recently during Coronavirus times and this is expected to increase over the winter months. In the early months of the outbreak, we wrote an article that spoke about maintaining a positive attitude during the outbreak. Many of the customers have we help often say that they feel like a weight has been lifted, that they can sleep at night again. Debt and mental health issues go hand in hand, however, these reviews received in October 2020 encapsulate the thoughts that our customers have on this subject. Whether you have a short term debt and mental issue causing you to stress, or you need longer-term help – many of the stories spoke about by our customers are used to reassure others that they are in safe hands with us. That we’ll always have their best interests at heart. But don’t just take our word for it…Find thousands of similar Trust Deed reviews. written by customers in their own words. Jemma wrote a review saying : “I think I speak for everybody when I say debt isn’t a nice feeling to have over you, especially when it’s not your fault. The worry and stress and pressure of most to pay it back at high demand from creditors. My situation just became too much that I needed a way out, and I had to stop being stubborn and ask for help. When I came about Trust Deed Scotland, I was cautious at first but that soon changed from a very kind and helpful gentleman called Joe. Right from the beginning this guy has been amazing and answered all the questions I needed and basically held my hand and took me through the steps. Always at the other end of the phone if I needed, and also I got invited to the main office to meet face to face so I could be more reassured that it was all legit and see it. Office is lovely by the way. The process isn’t long, at moments it did feel long as I still had the pressure of creditors calling and emailing but I just got told to hold off, and I think COVID slowed down the process from normal but I felt at ease through it all thanks to Joe. Now my paperwork is complete, I now know in 48 payments I’ll have paid a huge chunk off my debt paid which is fantastic and now I can pick myself back up and start going again, as life is really too short to feel this way!” Stewart also added a review: “Although being in debt is very stressful and embarrassing, Trust Deed Scotland has been great. Vicki in particular has been fantastic at helping me sort out my debts. Thank you. It’s the best thing I’ve done and the company have been a godsend as they’ve helped relieve the massive stress I was feeling. If you are struggling with debt then don’t hesitate to give them a call.” Maria added of her experience: “I cannot recommend Trust Deed Scotland highly enough. In particular, Trish, who supported me through every step of the process, with loads of patience and knowledge. This was a stress-free and extremely quick process, with Trish keeping me posted and up to date throughout it all. I feel as though a huge weight has been lifted off my shoulders. Trish provided me with a first-class service and was extremely professional, without making me feel anxious or embarrassed by my financial situation at any time. 10/10.”

Debt and Mental Health Help

If you’re struggling with debt and mental health issues combined, you’re not alone Our experienced team are on hand to listen and to help you to take the first step and deal with your unaffordable debt. Tailored advice: Helping you make an informed decision with non-judgemental, friendly and confidential advice. Trust Deed & Debt Arrangement Scheme Specialists: Professional, experienced and trusted advice on all Scottish debt solutions. Over [reviews] Trustpilot Trust Deed reviews. from customers who we’ve helped setup with a Trust Deed or DAS. All formal debt solutions offered: You can choose the best solution for you and your circumstances. Experienced debt advisers: Our team have helped thousands of people across Scotland write off their debt and reduce their payments down to a more manageable level.

Talk Money Week 2020

Posted on by Craig Stocks
Trust Deed Scotland® urges people to open up about personal finances in support of Talk Money Week • Talk Money Week 2020 (9-13 November) encourages people to have more open conversations about their money and pensions • Talking about money more important than ever amid ongoing financial impact of Covid-19 • To get more people talking money Trust Deed Scotland® will be running awareness activity across social media during Talk Money Week. Trust Deed Scotland® has announced it is taking part in Talk Money Week, an annual awareness campaign run by the Money and Pensions Service to encourage everyone to open up about their money and pensions. Also see Talk Money Week 2021.

When is Talk Money Week in Scotland?

Held from 9th to the 13th November, Talk Money Week aims to reduce the stigma around money by encouraging conversations among families, friends, neighbours, customers, colleagues and communities. Talking openly about money can have a huge impact on managing money worries, and is important for our overall health and relationships. The impact of Covid-19 has made it more important than ever to start conversations about money to look after our financial wellbeing. Talk Money Week is also an annual opportunity to celebrate the work organisations are doing to support the UK Strategy for Financial Wellbeing, launched by MaPS in January 2020, which has ambitious ten-year goals to help everyone make the most of their money and pensions. Throughout the week there will be activity in Scotland to get more people talking about personal finance issues, and engaging with topics such as saving regularly, planning for retirement, dealing with debt, and teaching children and young people about managing money. As part of the week, Trust Deed Scotland® will be running awareness activity across social media during Talk Money Week.

Trust Deed Scotland® commented:

“We encourage our clients to openly talk about their debts where possible. Even by sharing their experience with other clients on Trustpilot where other people with unaffordable debts can learn about their experiences in their own words. Debt is still a great taboo and the stigma attached to have debt problems means many people attempt to struggle on alone. We’d like to remind anyone who has a debt problem that they are not alone. We’re here for them. Our team of friendly, non-judgemental advisors can help individuals take steps to improve their lives for the better.” Stephanie wrote recently about her experience with Trust Deed Scotland® “Massive weight off our shoulders. We had built up alot of debt and maxed out our credit cards. We were paying an extortionate amount every month and couldn’t keep our heads above water. I was nervous about calling but I’m so glad I did. Spoke to a lovely lady called Danielle who made me feel so at ease. She managed to sort us out on a 48 month payment plan and got a lot of our debt written off so we’re now paying less than half than we were and even managed to protect our car payments and keep our car. It’s great to finally feel like we’re not fighting a losing battle and in a few short years, we will be debt free and have a fresh start. Wish we had done it sooner.” For more information on Talk Money Week visit www.maps.org.uk/talk-money-week/

Help from Trust Deed Scotland®

Let’s talk about debt today. Contact Trust Deed Scotland® on 0141 221 0999 or browse through our Scottish Debt Solutions. With our experience of having helped over [volume] people in Scotland and by becoming the No.1 rated debt company in Scotland with over [reviews] five star reviews, our team has helped people from all walks of life. Our advice team are:
  • Friendly
  • Non-Judgemental
  • Empathetic
  • Experienced
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