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Many people across Scotland are struggling with consumer debt – everything from store cards to bank overdrafts. In fact, according to a recent survey by the Trades Union Congress (TUC), household debt in the UK is now at a record high of £15,385 per household – a figure that excludes mortgage debts, but includes consumer debt items such as credit cards, bank overdrafts, payday loans and store cards.
We are fortunate in Scotland to have a way out of such difficulties in the form of a Debt Arrangement Scheme (DAS), which is one of Scotland’s best-kept secrets. It’s available from charitable organisations such as StepChange and from commercial debt advisers such as TC Debt Solutions, too. It is a Scottish Government scheme that is legally binding and prevents creditors from taking further action against people who owe money.
Set up back in 2004 by the Scottish Government, the scheme allows people to freeze interest and charges on their debts and pay their debts off interest-free over a longer period of time. This brings payments down to levels that people can afford and gives people the chance to get their lives back on track. Interest and charges are simply written off.
Apart from reducing debt, one of the best things about the DAS scheme is that it protects people from their creditors but is not a form of insolvency: people get to pay back their debt in an affordable way. Lenders like the scheme because they know they will eventually get their money back – and borrowers like it because they don’t have to pay interest charges and they get longer to pay their debts off. It’s a case of everyone wins.
There’s plenty of information about the Debt Arrangement Scheme online at www.aib.gov.uk/debt-arrangement-scheme. Thousands of people have used the scheme, but so many more could get this help – whether through financial charities or commercial organisations.
Partner, TC Debt Solutions, Dunfermline