It’s difficult to know what to do when in debt, especially what company to go to for free advice. Glasgow is the debt capital of Scotland and many people don’t know where to turn for debt help and advice.
There are fee charging debt companies, companies which advise you for free but charge for the solution and debt advice charities. You should always make sure a debt advice company makes you feel comfortable and understands your problem. If you feel a debt advice company does not offer the level of empathy and care you expect then the fact the advice is free would not be reason to go with that company. You have a choice on the debt company you choose to help you with your problem and there are lots of good companies out there.
How can debt advice be free?
People in Glasgow are often worried about their debt problem and are confused by which company to trust. The problem is that there is a lack of transparency in the debt advice industry which leads to confusion and frustration. There are two types of for profit company: the one’s which charge and fee and the one’s that don’t. The companies that charge can give you a bill for up to £3,000 and then leave you with your debt problem – so if you take anything from this article, it’s this, never, ever pay for debt advice.
Other companies that don’t charge for the advice will what to give you one of their debt solutions. You will generally have a choice over which debt solution you will follow. It’s important you are aware of the obligations you face when entering a debt solution. A free debt advice company will offer the debt solutions in-house to ensure they can, in some instances, make money from the debt solution itself. Most debt solutions are not paid for directly by the person in debt, instead creditors will hire the debt solution company to carry out the work.
What debt solutions are available
A Debt Management Plan is an affordable repayment programme set up by a debt management company. You would make one monthly contribution to a debt management company and they would liaise and pay your creditors. A debt management plan is usually for debts which will be repaid in a shorter period, such as less than 5 years. It’s an informal arrangement so can be difficult to stick to when times get tough, such as at Christmas and birthdays.
A Protected Trust Deed is a legally binding agreement with your creditors where you agree to make a monthly contribution to your debt via an insolvency practitioner. One of the main benefits of a Protected Trust Deed is you can repay a minimum of 10% and the rest of the debt is written off at the end of the solution. Typically the return is 30% of the money borrowed. A Protected Trust Deed usually lasts for 3 years. So, if you owed £100,000 to your debt, you would typically repay £30,000 over a 3 year period, with the rest being written off at the end. In order for this to happen you should comply with your Trustees requests. In Scotland there are roughly 9,000 Trust Deeds protected each year.
The last debt solution is Sequestration, also known as Bankruptcy in England, Wales and Northern Ireland. Sequestration is the most damaging debt solution for your credit rating however if you are unemployed or have no income then it may be the right choice.
Top tips for choosing a debt advice company
1. Expect customer service to be high – the debt advice company should be on your side and fighting your corner. If you feel it is not, then walk away.
2. Check the company has a consumer credit licence with the Office of Fair Trading. This is an essential element of debt advice and ensures the company has been closely scrutinised.
3. Make sure you feel like the company is being truthful with you – if not, leave.
4. Always ask how long you will be in your debt solution, anything over 8 years is unlikely to be correct for you.
5. Never, ever, pay for debt advice. It’s so important I’ll say it again, never, ever.
Debt advice in Glasgow
In comparison to other areas of Scotland 債務重組 vs 破產 , Glasgow faces a larger percentage of people in poverty and needing debt help. Sometimes, there is only one solution available to residents from Glasgow in need of debt help, this is Sequestration. This can be attributed to a lack of employment, loss of benefits or their debt problem was left too long and the debt (including interest and charges) has become too severe for any other realistic debt solution.
Glaswegian’s looking for debt help can speak to a number of people, including family, business professional or specialist debt companies. There are many options available to them.
It’s estimated that of the 9,000 Trust Deeds each year in Scotland that almost 2/3rd come from Glasgow. The Protected Trust Deed route is appealing because it’s a viable alternative for people living in Glasgow to Sequestration.
Debt solutions in depth for Glaswegians
We explore the three main debt solutions for people living in Glasgow, Debt Management Plan, Protected Trust Deed and Sequestration.