Millions of Scots in Debt Over Christmas

    GLASGOW, SCOTLAND, December 25, 2013 /24-7PressRelease/ -- With millions of Scots already in debt, the Christmas season is placing even more pressure on households to spend beyond their means in order to give an appearance of being more affluent. Some are finding relief in a couple of programmes such as the government run Debt Arrangement Scheme (DAS) which allows Scots more time to pay debts without hassle from creditors, and the Scottish Trust Deed which forges a partial debt repayment agreement between debtors and creditors.

The Survey concluded, a majority of Scots have been found to be living beyond their means. A full third of Scotland's population rely on credit cards and see bank overdrafts as a normal part of their account balance. Furthermore, the survey reveals that an alarming 12 percent of Scots have no savings at all to fall back on in case of an emergency.

There are several reasons given by those suffering with debt problems in Scotland. One of the largest is frustration over the sputtering economy which has led to stagnancy in wage packages. A third of those surveyed responded that they felt they did not earn enough income and therefore had to rely on credit cards, loans and other means to fund their living standard.

The Christmas season was given as another strong reason for further indebtedness since food, drink, decorations and gifts for the event were considered necessary extra expenses. Families are particularly more vulnerable to Christmas financial pressures as parents stretch finances to ensure children have a good holiday experience. A further HSBC survey showed that the average Christmas bill would be around GBP488 which is still high even though it is 7 percent less than last year.

Another part of the survey revealed that as high as 19 percent of those in debt expressed a willingness to make lifestyle changes in order to better align with their strained financial circumstances. However, Tim Orton, a representative of Aviva UK Pension & Investment, has said that it seems that Scots continue to choose to live well beyond their means which worsens their indebtedness.

There are two main services that can be utilised by Scots to help them ease their debt situation. The first is the Debt Arrangement Scheme, or DAS, which is a government run statutory scheme that assists debtors by allowing them more time to pay their debts without creditor hassles or court action threats. At the date of programme signup, all fees, charges and interest are frozen and are written off once participants complete the scheme.

Participation in the Debt Management Scheme is free and is provided by Citizens Advice Scotland and local authority money advisory units. Under the DAS, all personal assets of debtors are protected. This includes homes as long as mortgage payments are kept up to date.

Scots can also turn to one of two types of Trust Deeds for debt assistance. The first is a Voluntary Trust Deed which is a voluntary agreement made between the debtor and their creditors to make partial debt payment. The process involves a Trust Deed being created of the debtors rights which are transferred over to a trustee who is a qualified insolvency practitioner. The trustee then sells entrusted property to raise money for creditor payments. This form of Trust Deed is considered voluntary because creditors are not bound by it unless they agree to the terms.

A Protected Trust Deed, on the other hand, binds all creditors to the action as long as the debtor keeps the deed's terms. Creditors are prevented from filing bankruptcy or their own debt repayment programme under a Protected Trust Deed.

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