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Scottish Trust Deeds Helping Debtors Dodge Insolvency

November 1st, 2010 | Comments Off | Posted in Trust Deeds

Although things have been rough in Scotland, as in much of the rest of the world over the course of the last 2 years, it has come to light that Scottish personal insolvencies were down. In fact, they dropped by a full 10% during the 2nd Quarter of 2010’s financial year when compared with the 2nd Quarter of 2009. This significant drop is derived from figures released by Scotland’s official Accountant in Bankruptcy which showed that during the period between July and September of 2010, there were a mere 5,168 personal insolvencies declared. When compared with the 1st Quarter of 2010 this constitutes a 4% drop in insolvencies. That means that for the the first half of 2010 there were only 3,092 bankruptcies, but there were 2,076 Protected Trust Deeds, both of these being variations of personal insolvency.

For those unfamiliar with Protected Trust Deeds, which are more commonly known as Scottish Trust Deeds, they are a variation of a debt solution known in the United Kingdom as the IVA or Individual Voluntary Arrangement. This solution has proven to be a popular one with those in the UK who have been attempting to fix their debt problems without having to endure the stigma associated with bankruptcy. In the often more conservative Scotland, the Trust Deed solution is proving to be one which is growing in popularity, as well, since it is viewed as a sensible and relatively hassle free way to work off debt without the harassment of creditors. More comprehensive information on Scottish Trust Deeds can be found here.

The far less common Debt Payment Programmes were up by 60% in 2010’s 2nd Quarter to a total of 497, causing many to wonder exactly what is making people seem to pursue these alternatives to bankruptcy. In many cases, the reasons are fairly straight forward. Fergus Ewing, the Minister for Community Safety in Scotland revealed that by allowing people to pay off their debt over an extended period of time, it is helping them avoid bankruptcy and, at the same time, means that they are far more likely to seek advice earlier in the debt accumulation process. This means that they are often able to recover from their debts and get their credit back on track so that they can live the way they want to.

Since this solution happens to work for creditors, it appears that the Scottish Trust Deed is being chosen at a far higher rate because it helps people maintain a sense of their own pride and integrity. Due to the fact that they are able to pay off their debts they avoid the reputation of being a person who does not care about their duties to the community. Financial experts in Scotland say that there are a significant portion of individuals each year who find themselves in debt, but these days they advise them to seek out alternatives long before considering an option as severe as bankruptcy which has such lasting repercussions that do not expire for years.

On the whole, many consumers in Scotland are relieved to know that a working solution exists for them if they should ever have the misfortune to run into serious debt.

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