Category: Guarantor Loans

New Scottish Loan Shark Victim Support Service Launched

Posted on by Craig Stocks
The Scottish Illegal Money Lending Unit (SIMLU) has launched a new support service for Scottish loan shark victims, struggling to deal with loan shark debts reports both the Daily Record and Herald newspapers. The unit’s new website – stopillegallending.co.uk – has been set up to provide dedicated advice and support. Trust Deed Scotland recently reported on a clampdown by Manchester City Council on payday loan providers opening in-store locations in their city, with the English local authority fearing that many more people are turning to high cost, short term lending solutions to deal with their problem debt. On average, loans that are taken out from illegal lenders end up costing three times as much as a regular, unsecured loan the UK regulators have previously said. As the country continues to recover from economic and financial uncertainty following successive lockdowns and restrictions, many people have been forced into taking out loans with payday loan providers, with many more borrowing with credit cards and bank overdrafts to pay for essential living expenses, from food and basic living expenses to even paying off their council tax arrears. More worryingly, a growing number have turned to illegal loan sharks in Scotland as a last resort. Scottish loan sharks have been taking advantage of the pandemic, and have been known to adopt illegal methods of debt collection, including violence, theft and in the most extreme cases, forcing borrowers into prostitution and drug dealing. With recent cuts to Universal Credit also expected to cause extended stress to households already struggling with debt, people across Scotland could find themselves borrowing from loan sharks. Indeed, The Guardian earlier this year reported that as well as traditional tactics at the community level, loan sharks are said to targeting new loan shark victims via social media platforms including WhatsApp and Facebook. As well as supporting victims of Scottish Loan Sharks, the group aim to help more residents in communities throughout Scotland report illegal loan shark activity safely and:
  • Immediate support with any urgent issues
  • Longer term support to assist you in moving away from using loan sharks
  • Help to access local services, including debt advice services, credit unions, addiction counselling and local support groups.

Stop Loan Sharks Scotland Charter Mark

The new recipients of the Stop Loan Sharks Scotland charter mark, a scheme initially launched last Christmas to crack down on scams, are social enterprise Scotcash and charity Grampian Regional Equality Council (GREC) in recognition of their commitment to supporting and promoting the work of the SIMLU and for taking a zero-tolerance stance on illegal money lending within their communities. Speaking on the launch of the new service, Fiona Richardson of Trading Standards Scotland commented: “I am delighted that Scotcash and Grampian Regional Equality Council have signed up to the Stop Loan Sharks Charter Mark. We have been working with Scotcash over a number of years to tackle the problem of illegal money lending and we have been working with GREC over the past year on a prevention project. By signing up to the Charter Mark, both organisations confirm their ongoing commitment to work with us on this problem. We will work together to promote the message that you should not use loan sharks, but also to make sure that, where somebody has ended up using an illegal money lender, they know where to go to receive the appropriate help and assistance. In a period of great financial uncertainty, it is important that we take all the steps we can to stop people from borrowing from loan sharks and getting trapped in a cycle of debt and intimidation.” While payment breaks may have ended for more, lenders are still obliged to offer tailored support to those struggling with their debt. Where an individual is struggling with unaffordable debt, help is available from a number of Scottish debt charities and organisations such as Trust Deed Scotland, who can offer tailored debt advice given by an experienced debt advice team. As a leading debt solutions provider in Scotland, we have already helped [volume] people in Scotland, and have also gained [reviews] Trustpilot reviews in the process. We’re suitably placed to give you tailored debt advice, and by speaking to us, you’ll have a better understanding of the options available to you.

Considering borrowing money to repay debt?

If you are struggling with debt and considering borrowing money from any other source of lending, firstly consider your own affordability and whether you will be able to repay the money you are borrowing. This doesn’t just apply to loans, but other forms of borrowing such as credit cards and buy now pay later agreements. If you feel that you have unaffordable debts and cannot manage to repay the debt, don’t borrow. Borrowing money to repay debt, via an illegal loan shark, or a high-cost lending source such as a payday loan is never a good idea, but especially when you are unable to continue the repayment of these finances. Never pay a non-priority bill (e.g. credit card debt, payday loan) in favour of a priority bill (e.g. mortgage, rent, council tax) Seek help immediately. You can get free and impartial help with money, set up by the government: MoneyHelper, an independent service set up to help people manage their money. Or, you can call Trust Deed Scotland today on 0141 221 0999 for confidential, non-judgemental debt advice.

What debts does a Protected Trust Deed include?

Posted on by Craig Stocks
The type of debts that can be included in a Protected Trust Deed are generally those that are described as unsecured, with some exceptions. When you enter into a Protected Trust Deed in Scotland, most of your unsecured debts will be included and this may include:
  • Credit Cards
  • Personal Loans
  • Overdrafts
  • Catalogues
  • Gas and Electric Arrears
  • Council Tax Arrears
  • Payday Loans
  • Store Cards
  • Buy Now Pay Later Agreements
  • Any Other Outstanding Personal Bill e.g. Vet Bills
There are other debts that can be included in Trust Deeds, but we recommend contacting us today confidential advice as it’s important to understand not only the debts that you have and whether or not debts those can be included in a Protected Trust Deed, but also other aspects include your affordability, total debt owed and your income vs. expenditure. On some occasions, an alternative Scottish debt solution may be more beneficial for you.

What types of debt are excluded from a Protected Trust Deed?

Typical debts that aren’t included within a Protected Trust Deed include:
  • Mortgages
  • Secured Loans
  • PCP and PHP Agreements
  • Hire Purchase Agreements
  • Court Fines
  • TV Licence Arrears
  • Student Loans
  • Child Support Arrears
You can also find out more about the differences between secured and unsecured loans, if you’re unsure what this means.

Can joint debts be included in my Protected Trust Deed?

A joint debt in Scotland is a debt that has your name and the name of the other person you entered into it with on the agreement. A joint debt can be included in a Protected Trust Deed, however, the other person named on the debt will still be responsible for making payments towards it. This is also true of guarantor loan debts in Scotland. If you have some of the debt written off, the other person will still be asked to pay the remaining money back, therefore that debt isn’t written off in the same way that the other debts that included in the Protected Trust Deed would be written off. If you have joint debts, and are thinking about applying for a Protected Trust Deed, you should contact us for confidential advice first. We can let you know how it would affect you and the other person named on the debts.

What happens to my debt during a Protected Trust Deed?

Before Trust Deeds are agreed, proposals are put to the creditors who monies are owed to. If the creditors agree to the Trust Deed, you’ll make monthly payments towards the Trust Deed for 48 months, or 60 months if this was agreed as an extended duration for the Trust Deed. When your Protected Trust Deed has been complete, you’ll be discharged. At this point, any balances outstanding on the debts included in your Trust Deed will be written off.

Is a Protected Trust Deed right for me?

To find out if a Protected Trust Deed is right for you, we advise you to try our online Trust Deed Wizard® tool. This will begin the process of finding a debt solution for you, based on your own unique circumstances. When you’re looking at the types of debts that can be included in a Protected Trust Deed, you may have debts that can be included such as those owed to family and friends but you may benefit from speaking to Trust Deed Scotland® in order to find out the advantages and disadvantages of doing so. There are alternative solutions to Trust Deeds in Scotland, one of which is the Debt Arrangement Scheme. When you speak to an expert money advisor, all pros and cons will be explained to you, and sometimes the type of solution that fits your needs best may not be a Protected Trust Deed after all. When considering your decision on whether a Protected Trust Deed is right for you, we have previously written articles in response to questions we’ve previously been asked such as Is A DAS Worth It? or Is A Trust Deed A Good Idea? Trust Deed Scotland® has thousands of reviews on Trustpilot, however, we also offer Debt Arrangement Scheme and Sequestration advice, which means you will be given balanced, fair advice that puts you in control of the decision-making process.

Coronavirus Guarantor Loan Payment Breaks

Posted on by Craig Stocks
EDIT: August 2021 – Payment breaks have been replaced by tailored support. If you have difficulty repaying a debt outstanding to a guarantor loan call 01412210999 for the latest advice
New Coronavirus credit card and overdraft payment break measures to now allow for home credit and guarantor loan payment breaks, meaning greater guarantor loan protection for both borrowers and those who act as the guarantor in the arrangement. Trust Deed Scotland® – the number one rated on Trustpilot for debt help in Scotland welcomes the latest guarantor loan payment break developments. Guarantor loans continue to be one of the most worrisome debt types in Scotland for individuals struggling to repay their debts due to the impact of defaults not only affecting the finances of the borrower but also on that of the guarantor. The regulatory body had already released proposals for lenders to offer a temporary payment freeze on loans and credit cards for up to three months, but these have been now been confirmed and extended to a wider range of creditors, including guarantor loans. The regulators have confirmed that it’s going ahead with a package of measures that ensure lenders offer temporary payment relief to customers affected by the Coronavirus outbreak. The following financial products are now covered:
  • Guarantor loans
  • Logbook loans
  • Home collected credit
  • Loans issued by Community Development Finance Institution
  • Credit Union Loans (only where these are regulated)

How to Request Guarantor Loan Payment Breaks

Even before the Coronavirus outbreak, if you’ve been sold a guarantor loan in the UK, you may be able to make an affordability complaint for guarantor loans compensation via Resolver. Resolver is a tool created by MoneySavingExpert that helps with guarantor loan protection for both the guarantor and the borrower and if your loan was unaffordable when it was sold, you’re due a guarantor loans refund of any interest you’ve paid (plus 8% statutory interest). Guarantor loans are notoriously offered at a higher cost interest rate offered as a last resort, where the guarantor will often pay the debt off on the borrowers’ behalf. You can argue that your guarantor loan was mis-sold to you when your lender didn’t make check your income and living expenses correctly. If you’ve found that you’ve been:
  • Struggling with living expenses
  • Borrowing to pay off a guarantor loan
  • Topping up your loan over and over again
In these circumstances, your loan may have been unaffordable meaning you have a valid dispute cause. The complaint itself won’t affect your guarantor. They shouldn’t be told that you’ve complained. You can ask for your guarantor to be removed if:
  • The loan was unaffordable for you, the borrower.
  • The guarantor couldn’t afford to repay the loan without difficulty when the loan was taken out.
  • You pressured them into becoming the guarantor
  • The lender didn’t explain the implications of being a guarantor to them
  • You had other financial links with the borrower (for example, if you share rent payments or car finance) that weren’t taken into account by the lender when affordability was assessed.
  • It wasn’t made clear to you that the loan was a top-up loan and that you would be responsible for the entire loan (not just the top-up).
If you successfully removed them as a guarantor, the loan will turn into a ‘normal’ loan. If you were unable to previously explore a Trust Deed, DAS or any other debt solution due to having a guarantor loan, this ‘normal’ loan can then be included as a creditor, without any impact to your guarantor or your guarantor’s credit rating. If you are looking to request a guarantor payment break, you should contact the company directly in the first instance. Amigo Loans Bamboo Loans George Banco Trusttwo

What is Home Collected Credit?

Also know as doorstep loans, and not to be confused with those offered illegally by loan sharks, home collected credit loans are often for small sums – between £50 and £500 – over short periods, with repayments collected weekly or fortnightly at your home. Doorstep loans tend to have a much higher interest rate than a bank loan or a credit card. All home credit lenders have to be authorised by the regulators; if not, they are acting illegally. If someone calls at your door and offers to lend you money during the Coronavirus, you should ask to see proof that they are authorised by a UK regulatory body. If they can’t provide this proof, it’s most likely that they are a loan shark or another Coronavirus scammer and you should end the conversation and report them to Trading Standards. The new Coronavirus credit payment break measures set out expectations for lenders to:
  • Offer a temporary payment freeze on loans and credit cards for up to three months, for consumers negatively impacted by Coronavirus
  • Allow customers negatively impacted, and who already have an arranged overdraft on their main personal current account, up to £500 charged at zero interest for three months
  • Ensure overdraft customers are no worse off on price, compared to what they were charged before the recent overdraft pricing changes started
  • Ensure consumers using any of these temporary payment freeze measures will not have their credit file affected.
Trust Deed Scotland® urges anyone in financial difficulties to check their lending firm websites or social media posts for more information, and where possible use their online services to request assistance. Many lenders are experiencing a high demand in calls throughout their call centres, so it may require a push from you in many directions.  

How to Request Credit Card Payment Breaks

You should only request a credit card payment break if you really require it, and you should continue to make normal payments until your lender confirms that you have been granted a payment break. you will not automatically have interest and charges frozen during the Coronavirus outbreak. Your credit card lender may email, or even write to you to suggest how to go about claiming a credit card payment break, but we again advise that you check your lending firm(s) websites or social media posts for more information, and where possible use their online services to request assistance.

Coronavirus Debt Advice in Scotland

At Trust Deed Scotland® we understand that debt can be overwhelming.

You may be finding it difficult to cope already and with the current Covid-19 conditions, this may be causing you to worry further about how you will afford to repay your unsecured debt, don’t worry every year we help thousands of Scottish residents reach a brighter future. For qualified, expert coronavirus debt advice in Scotland, give us a call on 0141 221 0999 or complete our Trust Deed Wizard®. 

Debt Advice Charity Reports Covid-19 Income & Debt Concerns

Posted on by Craig Stocks
Over 40% of people in Scotland are concerned about income during the Coronavirus lockdown, Citizens Advice Scotland reported. Of those worried about their finances, the money and debt advice charity said that 31% of its respondents said they were concerned about utility bills, rent and debt repayments. In addition, 27% are concerned about mortgage repayments and the same number are concerned about paying for food and other essentials. 29% say they worry about paying council tax.

Debt Advice Charity Concerns

Citizens Advice Scotland, who ran a survey on the subject said the concerns around income show the extent of financial uncertainty people continues to feel during the outbreak. Myles Fitt, the Financial Health spokesperson for the Scottish debt advice charity, speaking on the issue advised: “What advisers across the Citizens Advice network were seeing before Covid-19 was the issue of people struggling to pay for key bills as a result of a lack of income in the first place. With over 40% of people in our survey concerned about their income, there is a real risk the pandemic makes this a more serious issue for a larger group of people. Both the Scottish and UK governments, as well as industry regulators, have taken significant steps to ease the short term pressure on people meeting the costs of daily living. Our message to people is that support is there and to access the support you are entitled to. Across the country, the Citizens Advice network has adapted to these changed circumstances, with CABs across the country still delivering advice in these challenging times, either on the phone or electronically by local advisers.” Trust Deed Scotland®, the leading debt advice company in Scotland further advised: “Many people in Scotland are now aware that lenders and companies ranging from mortgage lenders, credit card companies to car finance and guarantor loan companies are offering payment breaks but the message is being lost in translation that individuals need to contact their lender and request the payment break. The lender simply will not offer this without being prompted. Now with it being the first day in May, traditionally the first of a month is the day most people have a direct debit or standing order set up, those who have cancelled without informing their lender may start to see further charges being added to their debts and that will potentially also have a negative impact on their credit ratings as their account will show missing transactions rather than those authorised by the lenders. This is also potentially the first payday date for some people laterly furloughed after the outbreak began. We’re concerned that these issues come cause issues further down the line when the post-Coronavirus recession hits. We repeat our previous advice that if you’re struggling with debts due to your income being reduced as a result of the Covid-19 outbreak, seek payment breaks wherever you can and get it confirmed by the lender by email, or in writing.”

UK’s Personal Debt Shrank In March

It’s not all bad news, fortunately. Personal debt totals have indeed shrunk in the month of March, it has been confirmed. The amount of debt held on credit cards was lower than the same month the year before for the first time since it began recording the data in 2008, the Bank of England reported. Households in the UK paid back a staggering £3.8billion more debt than they borrowed in March 2020, the biggest figure on record, as households shunned credit cards in the face of the Coronavirus crisis. Credit card debt reduced by £2.4bn in a month to £69.3bn, for only the second time since July 2013. Therefore, the amount UK consumers have outstanding on credit cards has fallen, according to the Bank of England figures. As written about recently by Trust Deed Scotland®, many households across Scotland have saved money during the Coronavirus lockdown in Scotland by adopting careful household budgeting techniques.

Debt Advice in Scotland

At Trust Deed Scotland® we understand that debt can be overwhelming.

You may be finding it difficult to cope already and with the current Covid-19 conditions, this may be causing you to worry further about how you will afford to repay your unsecured debt, don’t worry every year we help thousands of Scottish residents reach a brighter future. For qualified, expert coronavirus debt advice in Scotland, give us a call on 0141 221 0999 or complete our Trust Deed Wizard®. 

Joint Debts In Scotland

Posted on by Craig Stocks
There are different types of joint debts in Scotland and there is often no one-size-fits-all rule when it comes to credit facilities. From unaffordable loans, credit agreements and bank accounts to mortgages and shared bills such as utility bills – understanding joint debts in Scotland can be quite complex to some. If you’ve been left with joint debts to pay and they’ve become unaffordable, Trust Deed Scotland® can help you with expert debt advice to help you manage the situation and take control of your own financial future. Joint and several liabilities can also apply to other debts, including household bills such as council tax.

If I Marry, Will My Spouse Become Liable For My Debts?

No. You will remain responsible for any unsecured debts that you have taken out in your own name, before during or after marriage. It’s a common assumption that once you join hand-in-hand in marriage or civil partnership, that your debts then becomes a joint debt. This isn’t always true. Unless you signed the agreement together of course.

If I Divorce, Does Liability Become Joint?

You will be responsible to repay 100% of any debts in your own name. If there are any debts that you enter into under a joint arrangement, at that point both parties are equally liable for the full debt amount. This is written into most, if not all, financial agreements and the term is known as ‘joint and several liability’. Where possible, it is always best to come to a fair agreement with the other person in the divorce. Simply ignoring it probably won’t work unless the other person takes full responsibility. However, this is typically unlikely and will inevitably cause more stress in the long term. In practical terms, this isn’t always possible as many relationships tend to end on bad terms.

Debt Collectors Are Chasing Me, What Are My Options?

Trust Deed Scotland advise that f you are being harassed over a debt that was accrued by an ex-partner’s, firstly ask for the original contract. If it doesn’t contain your signature or you don’t recognise the agreement, it may mean you have been a target of fraud by your ex. Either way, it’s a good idea to seek legal advice. If you have correspondence such as emails, text messages, or letters from your ex-partner that admit they owe you money it may be possible to take further action via the small claims court. However, if you do accept that there is a joint liability for the debt, with incontrovertible evidence to that end, you should seek immediate debt advice. Reporting credit fraud against an ex-partner can be difficult to do for several reasons. For example, if this was an abusive relationship, you may worry that reporting your ex-partner to the police could result in repercussions against you. If this is the case in your situation, you can speak to your creditor in confidence, as they may have processes in place to help people deal with debt from relationships that end badly or that have a history of abuse.

What Is Financial Abuse?

Financial abuse is a form of domestic abuse. It is a crime and should be reported to the police. Often the abuse is perpetrated by a partner, but it can also come from other relationships, such as friends, family members and carers. Learn more about protecting yourself against financial abuse. Financial abuse in the home – whether or not it’s accompanied by aggression or physical violence – can leave you feeling isolated, lacking in confidence and trapped. You should know that taking the first steps towards reporting financial abuse against you is incredibly brave. Just like seeking debt advice, it may seem scary but you don’t have to do it alone. Financial Abuse Further Resources: What is Financial Abuse? Women’s Aid Respect – Men’s Advice Line LGBT Anti-Violence Charity

What Happens To Joint Debts When Either Person Dies?

  If you have any joint debts with a spouse or any other party who have died, the debt will become your sole responsibility. This is true if you were a guarantor for a debt owed by the deceased. When someone dies, their debts become a liability on their estate. The executor of the estate, or the administrator if no will has been left, is responsible for paying any outstanding debts from the estate. When the debt is not in joint names, if there is insufficient money or assets in the estate to pay off all the outstanding debts, then the debts would be paid in priority order until the money or assets run out. Any remaining debts are likely to be written off. Surviving relatives will not usually be responsible for paying off any outstanding debts for the deceased unless they acted as a guarantor or it was a joint debt.

Are Guarantor Loans A Good Idea?

In our experience, the answer is usually No. Guarantor loans are risky and you should only ever accept the role of being a guarantor if you feel that you can pay the debt on the borrowersbehalf. If you have been considering applying for a guarantor loan to consolidate your debts. Many loans providers are under increased scrutiny due to irresponsible lending. If you’re struggling with a guarantor loan due to Coronavirus, you may be eligible to apply for a guarantor loan payment break. From borrowers, complaints to the Financial Ombudsman Service have included:
  • I shouldn’t have been given the loan because I couldn’t afford it and the lender should have known this at the time
  • My financial circumstances have changed and I can no longer afford to make the repayments to my loan but the lender isn’t treating me fairly
  •  didn’t apply for the loan
  • The lender won’t let me include this loan in a Trust Deed or Debt Arrangement Scheme
  • I’m having problems with my credit file because of the loan
  • My guarantor has been contacted too quickly
From guarantors, complaints to the Financial Ombudsman Service have included:
  • I didn’t agree to be a guarantor
  • I was pressured or forced into being a guarantor
  • It wasn’t properly explained that being a guarantor meant I had to make the payments if the borrower didn’t
  • The lender should never have accepted me as a guarantor because I couldn’t afford to make the payments
  • The lender should never have given the loan to the borrower in the first place
  • My circumstances have changed and I can no longer afford to make the payments
  • The lender is threatening to take me to court
  • The lender is repeatedly contacting me for payment
 

Do My Credit Card Debts Have Joint Liability?

Credit card agreements always have a primary cardholder who is responsible for repaying all debts that occurred as a result of the use of that card, even if they come from an additional authorised cardholder. Even if the card was used to purchase household items or a car used by the other partner for example; ownership of that debt lies solely with the primary cardholder.

Can I Hide My Debts From My Partner?

It’s actually quite common for people to successfully complete a whole Trust Deed term of 48 months or finish their Debt Arrangement Scheme without ever telling their partner about their debt issues. Although Trust Deed Scotland® would usually advise against hiding debt from your partner for many reasons.

Can We Get A Joint Trust Deed?

  Joint Trust Deeds don’t exist as such, however, both parties can have separate, individual Trust Deeds. Either party is free to have their Trust Deed managed by separate firms, though it could be argued that it is more advantageous to work with the same adviser as you will both most likely share bills and expenses. Trust Deed Scotland® always recommend speaking to an expert debt advisor as they will be able to explain your options and provide you with a personalised illustration based on your own circumstances and then your partners also, depending on the situation presented. When an individual enters a Trust Deed they would typically have £5,000 of unaffordable, unsecured debt. This debt ratio would therefore need to be maintained in order for both parties to be considered for their individual Trust Deed. It may also be an option that you or your partner qualify for a Trust Deed and/or the other qualify instead for a Debt Arrangement Scheme.

Can We Get A Joint Debt Arrangement Scheme?

Yes. If both you and your partner have unaffordable debts, you may apply for a joint Debt Arrangement Scheme, as long as you both have enough qualifying debt and for a joint DPP proposal to proceed, both applicants must consent to the DPP proposal. Couples who have at least one debt for which they are jointly liable may apply for a joint DPP if their relationship falls within the following criteria:
  • Husband and wife or living together as husband and wife
  • Civil partners
  • Living together in a relationship with the characteristics of a husband and wife relationship, except that they are of the same sex.
It may also be an option that you or your partner qualify for a Debt Arrangement Scheme and/or the other qualify instead for a Trust Deed.

When To Seek Debt Advice Over Joint Debts?

If you think you, your partner, or both of you have an unaffordable debt problem – seek qualified expert debt advice today. If you do something about your debt today, you don’t need to worry about it tomorrow. Reputable debt advice companies such as Trust Deed Scotland® and debt charities are regulated, this should help ensure that neither you or your partner are ‘sold’ into a debt solution and that you are both fully aware of the pros, cons, and alternatives. Call us on 0141 221 0999 or try our Trust Deed Wizard® to get started now.