The Scottish Government has created a program to help the residents of Scotland repay high debt levels called the Debt Arrangement Scheme. The program works by giving debtors more time to repay their debts in full and shielding them from litigation from their creditors while they are repaying their debts. With a Debt Arrangement Scheme, you are still paying back the full amount that you owe your creditors, just at a slower rate with payments you can actually afford.
Anyone with the ability to contribute a reasonable amount of their income to the repayment of their debts can apply for a Debt Arrangement Scheme. The payments that are required under the program will be more affordable than your current payments because the calculated payments are based on what you can realistically afford to repay based on your income and expenses. A debt adviser will review your list of creditors, the amount you owe, your income, and the amount you pay out in living expenses each month before making a determination of how much you can afford to pay on the debt each month. You can read more about the requirements at http://www.scotlandstrustdeed.co.uk/.
Once it has been determined that you qualify for a Debt Arrangement Scheme, you will be required to make a single monthly payment towards your debts that will be distributed in an equitable manner among all of your unsecured creditors. During the time that the Debt Arrangement Scheme is in place, interest, fees and charges on the outstanding debt are frozen. If the program is completed, then these charges are written off. However, if the debtor fails to complete the entire program according to the agreed upon terms, then these fees may still be charged by the creditors. Using a Debt Arrangement Scheme also protects your other assets from seizure, so your creditors cannot go to court to take your home or your car for debt repayment.
A Debt Arrangement Scheme can last for a significant period of time based on the amount that you owe. Some people find themselves making payments on their debts for ten years or more under a Debt Arrangement Scheme. On the other hand, Trust Deed repayment plans only require payments to be made for about four years, after which the remaining debt is discharged. However, the impact of a Debt Arrangement Scheme on your credit score is not nearly as bad as it would be if you had chosen a Trust Deed instead. This is because you are repaying the entire amount of your debt instead of discharging a portion of what you owe.