The steep decline of the oil and gas industry in Aberdeen severely affected contractors when the price of crude oil dropped dramatically in 2014. Although prices have risen since then, unfortunately job losses and serious debt problems continue to occur. The price of crude oil fell to a ‘year low’ of just under $26 per barrel in 2016, and whilst the equivalent figure for 2018 was $42 per barrel, economic forecasts predict further significant job losses over the coming years. Ernst & Young’s, ‘EY Scottish ITEM Club 2019 Forecast,’ predicts an average yearly contraction in Aberdeen’s labour market of 0.1% between 2018 and 2021, with the oil and gas sector forecast to suffer the most job losses - around 1,400 over the three years. So what can you do if you’re an out of work oil and gas contractor in Aberdeen, and are worried about your own financial situation?
If you’re in arrears with your household or tax bills and creditors are constantly pursuing you for money, there’s a chance they could take legal action through the courts to recover the debt. It’s important to know that you can take positive action to protect yourself from potential bankruptcy, and the first step is to seek professional advice from a licensed insolvency practitioner (IP).
Our licensed IPs at Scotland Debt Solutions are insolvency specialists, and we have a long and successful history of helping Scottish residents to escape debt. Initially, we can establish the full extent of your situation by assessing your financial affairs, including:
The results of this assessment dictate which Scottish debt relief procedures may be appropriate, and we can then guide you towards the best for your particular circumstances. So which procedures might be suitable?
A Debt Management Plan is an informal arrangement that allows you to repay your debts over a longer period of time. Interest and charges are typically frozen so the overall debt doesn’t increase, but as this is an unofficial procedure creditors aren’t legally bound by it. Non-priority debts including credit cards, store cards, and bank overdrafts, can be included in a DMP, but not priority debts such as your mortgage or rent, council tax, utility bills, or income tax arrears.
The Debt Arrangement Scheme is similar in nature to a Debt Management Plan in that your debts are paid off in full over a longer period of time, but DAS is legally binding on you and your creditors. Interest and charges are frozen as part of the arrangement, and creditors are unable to take legal action against you as long as you meet the terms and conditions throughout this procedure.
Trust deeds involve paying a proportion of your debts within a formally negotiated arrangement that typically lasts four years. This solution might be suitable if you have some disposable income each month or assets of value that could be sold, and is generally used to repay personal loans, and credit card and store card balances that have become unmanageable.
Sequestration is the term for bankruptcy in Scotland, and is usually viewed as a measure of last resort for people in serious debt. The process involves handing over all your assets to a trustee, including your property if you’re a homeowner, and potentially paying a monthly contribution towards your debts if financial circumstances allow. For more information on how we can help, call one of our expert team at Scotland Debt Solutions. We’ve been closely involved in helping out of work oil and gas contractors in Aberdeen since the industry started to decline in this area, and can offer free same-day consultations either by phone or at our Aberdeen office.
Universal Credit (UC), Housing Benefit, and the Council Tax Reduction Scheme are just three types of benefits in Scotland but what happens if you're in debt?
The Covid crisis has caused debt problems for thousands of people in Scotland. One common debt concern is car repayments. Read our car finance advice here.
Our Scottish based team can help advise you on your debt problems.