Avoiding Bankruptcy In Scotland | Sequestion Advice

Avoiding Bankruptcy In Scotland

The majority of people in Scotland won’t know which debt solutions are available to them and how they can help avoid entering sequestration (bankruptcy).

There are steps which someone in debt can take to avoid being declared bankrupt by creditors or through there lack of understanding about their choices.

Scotland has different debt solutions and criteria to the rest of the UK which can make it easier to avoid bankruptcy depending on a person’s circumstances.

Steps To Avoid Bankruptcy In Scotland

In some cases sequestration (bankruptcy) is the best route to dealing with deal for people living in Scotland, however for those who can avoid it these steps can help.

Talk To Creditors

When in debt it’s important to always speak with creditors and explain why & how the debt was able to build up to the level it’s currently at.

We’ve seen cases where people have been declared bankrupt despite being able to repay the debt all because they wouldn’t talk to creditors.

Even if the debt is being disputed it’s important to keep constant contact with the creditors about why it’s not owed or how a complaint can be made.

Enter Protected Trust Deed

If the debt can’t be repaid within a reasonable period of time, such as 5 years, then a protected trust deed will allow someone to repay a percentage of the debt over 4 years.

Any debt still outstanding will be written off at the end of the solution but if someone comes into additional money during the 4 years it could be taken.

The trust deed helps people avoid bankruptcy because they don’t have to repay the full amount owed such as in debt management plan.

If someone is suitable for a protected trust deed they should strongly consider it over bankruptcy because it’ll allow them to put forward a proposal. In bankruptcy an official receiver decides how much someone should pay based on their income and expenditure.

Borrow From Friends & Family

While borrowing money to pay for debt isn’t ideal, when bankruptcy is the alternative it’s a better alternative to borrow from friends & friends.

If friends and family are able to lend enough money to repay the debt it would help avoid paying interest, charges or other costs.

 

 

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