Check If You Qualify

Why Scottish individuals should be wary of unregulated debt advice

Sharon McDougall - Updated - 26th January 2024 - 3 minutes to read

As part of Scotland’s Financial Health Service, Scottish people in debt are obliged to obtain advice from an approved money advisor prior to entering insolvency processes such as the Debt Arrangement Scheme (DAS) or a Scottish Trust Deed.

Cases have been reported in the press, however, where unregulated debt advisors are encouraging Scottish residents to enter the wrong procedure, taking advantage of a need for financial help for their own gain.

When should I use a licensed insolvency practitioner?

It’s vital to approach a regulated advisor, and for large debts over £5,000, licensed insolvency practitioners have the in-depth knowledge to offer detailed guidance on the best options for debtors.

The key element is that the practitioner should be ‘licensed’ as they are regulated by professional bodies, and must comply with government legislation. Scotland Debt Solutions works solely on behalf of residents of Scotland, and has been successfully helping Scottish people out of debt since 1989.

Debt Calculator

Get a rough indication of what your monthly repayments might be under each of our different debt solutions.

What about smaller debts?

For anyone owing smaller amounts of money, generally below £5,000, debt charities and advisors in the free sector are a good option, but debtors need to be aware of recent cases where incorrect advice has been offered.

One such example is where individuals in debt have been guided towards Scottish Trust Deeds rather than using the government-backed Debt Arrangement Scheme (DAS). Although Scottish Trust Deeds are a valuable solution for many people experiencing serious debt issues, they attract higher fees than the Debt Arrangement Scheme.

Some unscrupulous and unregulated advisors offer Trust Deeds when a Debt Payment Plan under DAS would be more appropriate for the individual debtor, potentially putting their home at risk when it’s not necessary.

Debt still a problem in Scotland

Although the new regulations brought in by the Scottish government have been helpful in regulating the insolvency industry, debt remains a serious problem in Scotland. According to the StepChange Debt Charity, average personal debt levels in Scotland rose to £12,677 in 2016.

The charity also reports a drop in levels of disposable income, and with the rising cost of living, more people in Scotland are in danger of experiencing unmanageable debt.

Debt Arrangement Scheme or Protected Trust Deed?

Access to online advice is quick and easy these days, but debtors need to be aware that lots of websites that purport to be debt help companies are simply lead generation sites with no regulation or specific expertise.

For this reason, some people in debt are not being allowed to repay what they owe in full via DAS – a crucial issue which can seriously affect a lender’s viewpoint when it comes time to borrow money again in the future.

Furthermore, when Trust Deeds are promoted ahead of DAS, a debtor’s home could be put at risk for no reason. Although Trust Deeds are an excellent debt solution and invaluable for some people in debt, clearly the implications are more serious particularly where the debtor’s home is concerned.

Finding an approved money advisor in Scotland

The Insider reports that “protected trust deeds increased last year in 24 out of 32 Scottish local authorities whereas the rate of DAS was half the previous financial year”² – a worrying statistic that should make Scottish residents wary of seeking guidance from unregulated advisors.

Lots of websites purport to be debt help companies. They appear to be genuine at first glance, but as we’ve mentioned, some are effectively just lead generation sites with no regulation or expertise. They may carry out a degree of due diligence, and then simply refer clients on to other ‘advisory’ firms.

Scotland Debt Solutions are approved money advisors in Scotland. We are licensed insolvency practitioners with many years of supplying reliable debt advice to Scottish residents, and can provide the guidance you need to escape debt. Call today to arrange a same-day meeting – we have five offices around Scotland and offer a free initial appointment.

facebook colour icon twitter colour icon linkedin colour icon messenger colour icon whatsapp colour icon email colour icon
Sharon McDougall Square

Sharon McDougall

Manager

Other Articles

Can I borrow money whilst I’m in a Trust Deed? Can I Borrow Money

Can I borrow money whilst I’m in a Trust Deed?

Borrowing money when you’re already deeply in debt requires careful consideration, and consultation with your trustee, as there are various factors associated with further borrowing in this situatio...

Your guide to getting a mortgage after a Trust Deed Guide to get a mortgage

Your guide to getting a mortgage after a Trust Deed

If you’re about to be discharged from a Trust Deed, you may be wondering to what extent your ability to obtain a mortgage has been affected.

What is an inhibition court order in Scotland? Court Order

What is an inhibition court order in Scotland?

If you’ve lost your job, state benefits and tax credits can provide vital financial support to see you through this tough time and help you avoid taking on too much debt while you look for more work...

About

Why Choose Us

Usp Discussion

Speak Direct With

A Qualified Adviser

Headset

We Don't Operate

Call Centres

Usp Location

5 Offices in Scotland

National Coverage

Usp House

Ask us About

Home Visits

Usp Award

Fully Regulated Advisors

From a Reputable Firm

Usp Hand Heart

Helping Scots Get

Out of Debt Since 1989

We'll give you a call

Our Scottish based team can help advise you on your debt problems.

Here at Scotland Debt Solutions we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See our Privacy Policy.

Tools

Useful Tools

Personalised Debt Report
Usp Planner

Personalised Debt Report

Our personalised debt report will help you better understand your financial position and see where your money is going.

Debt Report
Instant Scheduled Call & WhatsApp
Headset

Instant Scheduled Call & WhatsApp

Arrange a call with an expert advisor at a time to suit you or contact our team via WhatsApp for immediate help and advice.

Arrange Callback
Find a Local Office
Usp Signpost

Find a Local Office

We have five offices located across Scotland. Find your nearest one here.

Find an Office

OUR SERVICES

We can help you with...

Sequestration

Sequestration

Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debts

Find out More
Trust Deeds in Scotland

Trust Deeds in Scotland

A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt included in the Trust Deed will not need to be paid.

Find out More
Debt Arrangement Scheme (DAS)

Debt Arrangement Scheme (DAS)

A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.

Find out More
Business Debts
Icon Briefcase

Business Debts

Whether you are a sole trader or a limited company director, we can help you work through your current financial problems including money owed to HMRC

Business Debts

Our Insolvency Practitioners are regulated by ICAS or the IPA and our firm is authorised and regulated by the Financial Conduct Authority

Fees and Information: There are fees associated with our services. These will be fully explained before entering into any of the personal debt solutions referred to on this website. Full details of our fees and how these are charged are fully explained to you prior to you committing to any particular service.

ICAS Insolvency Practitioners