I can’t afford my buy-now pay-later payment

Buy-now pay-later is a type of credit that offers a deferred period during which you don’t have to make any payments. This could be for a month or longer – sometimes the first payment on an item is deferred for as long as 12 months.

These types of credit agreement are commonly associated with retail fashion stores, but other sectors also use them, so what happens if you find that you can’t afford your buy-now pay-late payment?

What happens if I miss a buy-now pay-later payment?

Buy-now pay-later schemes are effectively short-term lending, so if you miss a payment it could have a detrimental effect on your credit record if the lender reports a default to the credit reference agencies.

The terms of these agreements aren’t always clear, however, and in some cases the borrower needs to set up a direct debit payment with their bank as part of the deal. If this isn’t set up, there’s a real risk that one or more payments could be missed, leading to charges and interest being added to the loan.

Interest rates are typically high if you miss a payment on a buy-now pay-later scheme and repayments can increase quickly with interest and charges attached, making the agreement increasingly unaffordable over time.

How can a Scottish Trust Deed help me?

Scottish Trust Deeds differ from DAS in that you have to declare full insolvency - in other words, you only pay a pre-agreed proportion of the debt. If you enter into a Scottish Trust Deed you receive protection from creditors who may be considering legal action against you, and this protection continues for the full term as long as you keep up the Trust Deed repayments.

A Trust Deed typically lasts for four years, and offers you an alternative to sequestration (bankruptcy in Scotland) if you can’t afford your buy-now pay-later payments and have serious overall debt.

What is the process of sequestration?

Entering sequestration means your assets are sold by a Trustee to repay your creditors as far as possible. Depending whether you earn a regular income, you may also have to make monthly contributions.

For more information on this and other debt remedies when you can’t afford your buy-now pay-later payments, please call our expert team at Scotland Debt Solutions. We operate a network of offices around Scotland, and offer free same-day consultations.