UK Wide Debt Advice Charity
Call us at 0800 085 0226
E-mail: contact@debtsupporttrust.org.uk


Trust Deed Changes

One debt solution available in Scotland is a Protected Trust Deed. Around 7,000 Scottish people enter this insolvency solution to resolve their debt problems every year.

It is believed by the AiB that there have been 'abuses of Protected Trust Deeds' in the past which they want to eradicate in the interest of creating a more transparent and fairer debt solution.

This positive step ensures that people in debt in Scotland, and being advised of a Trust Deed, are being given the right debt advice. Many people who may have been better suited to a MAP or Certificate of Sequestration route into bankruptcy, may have only been given the Protected Trust Deed option.

The Trust Deed is an ideal solution for some people, however, there are other debt solutions which are often ignored by some organisations. At Debt Support Trust, our charity advisors are obligated to provide the pros and cons of every debt solution to ensure you can accurately decide which option Is right for you.

What are the changes to Protected Trust Deeds?

The Scottish body managing Protected Trust Deeds, the Accountant In Bankruptcy (AiB), believes that the success rate of Trust Deeds is too low, the fees are too high whilst creditors are not being  given enough control of the solution.

Based on information released by the AiB, the changes in November 2014 will include:

  • Trust Deeds being accepted from upwards of £5,000 of unsecured debt.
  • The Trust Deed will not be accepted if the debts can be 100% repaid in 48 months or less.
  • Fees from companies that gather paperwork and fact find will not be accepted in the future.
  • Trustee's in a Trust Deed will no longer be able to charge an hourly rate, instead the funding model will move towards a similar model to the English, Welsh and Northern Irish IVA.
  • Before a Trust Deed can be Protected, the creditors must accept the fees proposed by the Trustee. If fees need to be increased, for whatever reason, the creditors must approve these costs before they can be increased.
  • Social benefits, like Jobseeker's allowance, cannot be used to make a contribution towards the debt solution.

Our advice team will be attending the Accountant in Bankruptcy seminar on the Protected Trust Deed changes later in October and we'll share any useful findings on changes to Trust Deeds. We anticipate the number of people entering a Protected Trust Deed will decline as stricter rules are imposed.

Worryingly, many industry experts believe that these new regulations will increase the number of people being forced into a bankruptcy route. This is believed to be the case because the new regulations do not include Certificate of Sequestration.

People already in a Trust Deed do not have to worry. If you are considering entering a Trust Deed ensure you have sought advice to guarantee you're fully aware of all the options.

Thursday, September 12, 2013
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20% UK Employees Earn Below Living Wage

4.8 million employees are earning below the living wage according to new figures from the Resolution Foundation think tank.

The number equates to 20% of all employees in the UK and is up from 3.4 million in 2009.

The living wage is not compulsory like the national minimum wage, instead it's based on the of living. The living wage in the UK is currently £7.45 except in London where it's £8.55.

However despite the increased rate in the UK capital, it was one of the lowest at 16% for paying below the living wage.

Women were more likely to be paid less than the living wage with some 25% or 2.9m currently paid below it. While men only equated to 15% or 1.9m of all those earning below the living wage.

Author of the report, Matthew Whittaker said,

"For most of the working population real wages have been flat or declining for many years and as a result more and more people have dipped below the level of the living wage.

"Britain has a sorry story to tell on low pay. Only a handful of our close competitors do worse and the large majority have much lower rates of low pay - sometimes half as much."

The industry with the greatest number of employees earning below the living rate was hotels and restaurants.

While 16-20 years olds accounted for 83% of those in extremely low paid jobs and 78% of those in low paid jobs.

Those working in the public sector are better paid with only 6% earning below the living wage in that sector.

Based on these figures if you were between 16-20 years old and working in a hotel or restaurant you are more likely to earn an extremely low wage.

In our experience we have found the group most at risk of taking out payday loans are those aged between 18 - 25 years in low paying jobs.

If you fall into the above category and you are struggling to live we would advise you to get money or debt advice.

Even if you don't have debt it's important to find ways or surviving without taking out credit, especially with high interest loan companies.

Thursday, September 05, 2013
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What Does IVA Mean?

A common question asked is "what is an IVA" or "What does IVA stand for"? An IVA is just one of many debt solutions available to people struggling with the burden of unsecured debt, such as credit cards, payday loans, overdrafts or personal loans, among other forms of credit.

An IVA stands for an Individual Voluntary Arrangement.

An IVA is a form of insolvency, which is a formal route to become debt free. A formal debt solution will enable you to pay one monthly payment towards your debt and if you complete the debt solution you will become debt free at the end, with any remaining debt, interest and charges written off.

Take Care with an IVA

The IVA option can be a very efficient method to become debt free again, should it be appropriate for you. It's important to ensure you're entering the right solution because the wrong debt solution can be detrimental to your credit file as well as the time you're in the debt solution.

In the past, we've heard that some people use the letters IVA to try and describe other debt solutions, such as a debt management plan. A debt management plan lasts until all of the debt and any charges are repaid. So, in this scenario below you could be in a debt management plan for at least 11 years, whereas an IVA would be 5 years.

Unsecured debt: £40,000

Assets (like a house): £0

Disposable income: £300 per month

Tips to Ensure You're Entering an IVA

If you've chosen your debt solution and want to enter an IVA there is some information which could help you ensure you're entering an IVA and not a debt management plan. For example:

  • You need a licenced insolvency practitioner in order to enter an IVA. The Insolvency Practitioner (or IP) will propose your IVA on your behalf.
  • There will be a creditors meeting in an IVA to decide whether they want to accept your proposal.
  • Setting up an IVA takes at least 10 weeks, whereas a debt management plan is quicker.
  • Each insolvency practitioner must be registered with a regulatory body, such as ICAEW (Institute of Chartered Accountants England and Wales), so check which body your Insolvency practitioner is registered with.
  • An IVA is completed usually within 5 years, however in some instances it can be extended to 6 years. If your paperwork doesn't state the expected date of completion, and doesn't mention the words Individual Voluntary Arrangement, then get impartial advice before proceeding.
Tuesday, August 20, 2013
Debt Support Trust
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1 Week at Debt Support Trust

At Debt Support Trust we're faced with challenging questions, but we've spent the last week reviewing some of the "Big Issues" which we face on a daily basis. We thought this would be useful for other people to realise they aren't alone with their money problems.

The four main areas where we most often got asked for our support were, "what is the best debt solution", "council tax issues", "Issues with existing debt providers" and "payday loan questions".

What Debt Solution Is Best For Me?

That all depends on your own personnel circumstances. The right debt solution for one person may be the wrong advice for another. The only way anyone can give you debt advice is once they know your own personal and financial situation. A debt advice must be aware of how much you owe, how much you earn and how much you spend. They must also be aware of any assets you have. Once a debt advisor has gained this information then they will be able to advise you on the best debt solution for you.

This was the main reason people contacted Debt Support Trust - to find a way to become debt free.

Council Tax Debt

Council tax is what is known as a priority debt and should you fail to make this payment the debt can quickly be escalated debt onto a debt collection agency. This affects so many people that we speak to on a day to day basis. Once with a debt collection agency you have two options; ask the council to take the debt back (in extreme circumstances they may do this) or negotiate with the debt agency to offer them what you can afford to pay each month. If they do accept an offer of negotiation then it is imperative that you keep to your end of the deal and make your regular contribution. Failure to pay council tax, which is a priority expenditure each month, was a major problem for many people.

Issues With Debt Solutions

There are many horror stories regarding debt solutions in the debt advice industry and the majority of which are because people didn't know the full extent of the solution they were entering. We always recommend using a registered debt advice charity and ensure you're aware of all the pros and cons of each debt solution as well as any fees which may be involved. No matter what debt solution you enter, your credit rating will be affected with a default being added to your credit file for 6 years.

Pay Day loans

The advice given about pay day loans is on the increase. This is due to the fact more people are turning to short term lending. As long as they are able to reasonably pay the full amount back, once they are paid, then it can be a resolution to a short term problem. However for many more people they fall into the trap of having to continually borrow to get through the following month and the situation can quickly spiral out of control. No debt advisor should recommend getting into further debt but most understand why people find themselves in these situations.

When the problem with payday loan debt occurs, it doesn't matter how the debt was incurred, just that the contractual payment isn't affordable. People ask for our help to resolve this.

Debt Advice

Our debt advice team deal with a number of different issues relating to debt from the under-occupancy tax (bedroom tax) through to credit card debts. The top 4 issues were just the most common issues people had last week.

Tuesday, August 13, 2013
Debt Support Trust
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Church Payday Loans

The Church has vowed to help people obtain affordable credit by offering payday loans which don't come with an interest rate of over £4,000% APR. Credit unions have, for a long time, been an affordable way to borrow money over a short period of time. The Church plans to utilise the credit unions around the country, of which there are around 500, to deliver cost effective lending services.

Would You Use The Church?

The church has already established a credit union for its staff and believes their services could mean an end to high charges for people in need of short term loans. The Archbishop of Canterbury is using the power of the church to try and solve a modern day problem. In turn, it will help show the church as being an approachable organisation for problems, such as money worries.

The Church is not intending to lend money or debt collect should somebody fail to pay, but instead use the existing credit union network to deliver the service.

The Archbishop said to the head of Wonga "we're not in the business of trying to legislate you out of existence, we're trying to compete you out of existence."

What's The Difference in Payday Loan vs Credit Union

There are various routes to get affordable credit. If a debt problem has arisen and the financial problem is too severe it's important to get debt advice, however, before borrowing money from a payday lender, could there be a cheaper option?

On a loan of £400 which is borrowed for 30 days, the repayment will vary from company to company. We're compared credit unions too and the difference was remarkable.

Borrowing from a payday lender for 30 days would mean a total repayment of £525. If you borrowed the same amount of money from a credit union the amount would be £416. That's a difference in fees of £109.

There are credit unions on most high streets or accessible in local communities.

Thursday, July 25, 2013
Debt Support Trust
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Debt to Family and Friends

Debt to family and friends can cause relationship problems but a survey has shown that more people are being forced to borrow money this way to survive.

As the cost of living increases and employment slowly begins to recover, people are turning to friends and family to help make ends meet.

The Aviva report has found that the average household in debt owes £2,000 to friends and family. This is the same amount as being borrowed on credit cards.

Why Do People Borrow From Friends and Family?

We're experiencing a change in social beliefs surrounding debt. In the past, people often wouldn't share their debt and money problems with anybody, including friends and family. However, as times get tougher and the availability of credit has been restricted, it's a person's nearest and dearest that are being asked to help.

The Aviva study compared 18,000 households and also found that the average family has £13,000 of unsecured debt - a rise from £9,000 just one year ago.

What To Do In Debt?

It's vital for families in debt and struggling to repay their contractual payments to get advice. At Debt Support Trust our charity advisors have helped many people who owe money to friends and family and can provide tailored debt advice.

Our charity helps people deal with their debt problems. We do this by listening to your situation and by finding positive solutions to become debt free. There are always routes out of debt and we'll help find the right one for you.

If you want our help, you can telephone 0800 085 0226 or complete an online debt analyser for online debt help.

Debt Test

Wednesday, July 10, 2013
Debt Support Trust
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Money Problems Advice

If You're Having Money Problems, Then Our Debt and Money Advice Charity Can Help

Money problems can affect personal relationships, employment, the ability to eat and sleep and leave people in a general panic. It's a horrible feeling. A day comes when enough is enough and support is required.

It can be a bailiff visit, a telephone call or the stack of unopened mail at the front door toppling over which was the final straw.

Debt Support Trust is a registered UK charity. Our advice lines are open providing confidential debt and money advice between 8am and 7pm Monday to Friday. Everybody we help is struggling with money problems.

You're not alone in dealing with debt, but within 15 - 30 minutes we can help you with a solution to your money problem. If you would prefer to submit your details online we can call you back. Our debt analyser will also give you an idea of a debt solution which may be applicable for you.


Money Problems: The Solutions

Many people are not aware of the possibilities which exist to become debt free. There are debt solutions which deal with every level of money problems, from token payments to creditors through to insolvency solutions. The benefit is these debt solutions will help you become debt free again.

Token Payments: If you have a short term money problem, perhaps through job loss or reduced income, then token payments towards your creditors can help. A token payment is a manageable monthly payment towards your debt, but it will be lower than your contractual monthly payments.

Debt Management: This is a management solution which enables you to pay one payment to one company until all of the debt is repaid. Interest and charges are not guaranteed to be frozen but some creditors may decide it's best to freeze interest and charges to help you resolve your money problems.

IVA: The IVA is a formal debt solution where one monthly payment is made, usually for 5 years. At the end of the 5 years any debt which is not repaid is written off. The Scottish equivalent is the Trust Deed and lasts for 3 years.

Bankruptcy: In some instances bankruptcy is the best option to deal with money problems. There are different routes to enter bankruptcy and it's best to seek advice over which route is best for you.

Help With Money Problems

If money problems are worrying you, then do something about them today. Call 0800 085 0226.

You will be greeted by a trained advisor who will listen to your debt problem and guide you through the options. It's our responsibility to ensure you have the necessary information to make an informed decision about your debt solution.

This is why we explain the pros and cons of every debt solution. You can get specific advice for your money problem today by telephoning 0800 085 0226 or by completing the debt analyser and requesting a call back.



Tuesday, May 21, 2013
Debt Support Trust
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Energy Debt Problems

Shocking report highlights the financial struggle to pay priority debts

A report commissioned and released by Uswitch shows that one in five UK households are struggling to meet their payments to their gas or electricity supplier. This has resulted in 20% of households In the UK owing money to their gas or electricity supplier.

The Uswitch research found that 5 million homes were struggling to pay their energy supplier on time. This is up 1 million in 1 year and the total debt has risen by another £159 million, to £637 million.

1 in 10 people said a payment plan would help them get back out of debt. 2% of people will move to a prepayment meter. The prepayment meter is the most expensive way to receive gas and electricity.

Gas and Electricity - Priority Debt

Your energy supplier is considered to be a priority debt - a debt which should be paid first before any unsecured debt. This is the same as mortgage/ rent, council tax and food. These are all priorities to stay healthy and safe.

Many people we help at Debt Support Trust tell us they can't pay the gas and electricity because of their unsecured debts. The unsecured debts are usually more threatening, with telephone calls, letters and sometimes debt collectors turning up demanding payment. This often means priority debts are not paid.

Advice on Paying Gas and Electricity

There are a number of things you can do if you have gas and electricity debts to your energy supplier.

The most important step is the first step - speak to your energy supplier. You're not alone in worrying about your debt so they can help you.

Secondly, it's important to repay the debt. This can be managed in a monthly payment plan. If you owe £600 it can be daunting to repay that amount in one go, but you don't have to. Speak to your energy company and offer them an affordable amount each month. If you are unemployed then they may be happy to accept as low as £1 per week.

Thirdly, if you are not paying your gas or electricity because you are paying credit cards, overdrafts, payday loans or any other type of unsecured debt, then give us a call. Our charity advisors can help. There are debt solutions which can deal with unsecured debt and help resolve your financial worries. If you need help with debt problems please telephone 0800 085 0226.

Wednesday, April 10, 2013
Debt Support Trust
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Is Bankruptcy Right For Me?


"Bankruptcy is one of the best known debt solutions, but is it the right solution for me?"

We all want to ensure we receive the best debt advice so we can make informed decisions. There are a number of different debt solutions available across the UK. By understanding each debt solution you're able to make a decision on how you wish to become debt free.

Bankruptcy is one of the most well-known debt solutions. As a result, many people think they are bankrupt when they call our charity. However, that's not always the only option. Most people have two or three debt solutions which they could enter to resolve debt problems. And, in other cases we tell people that bankruptcy is not the right solution for them.

Is Bankruptcy Right For Me?

Bankruptcy is a solution to debt and money problems. But, many people enter the solution unaware of the consequences.

When creditors are sending letters almost every day, the telephone won't ringing with creditors wanting their money back and you have no idea how to pay them, then the common response is, "just make me bankrupt".

However, that's not always the best choice.

For instance, is it a short term problem, like being unemployed for a few months? Do you have an asset which has equity in it? Is the interest and charges the problem? These are all factors which will determine whether bankruptcy is the best advice for you.

5 Things You May Not Know About Bankruptcy

1. Usually bankruptcy costs to enter the solution

Bankruptcy costs between £90 and £700 to enter, per person. This is a fee you have to pay so you may have to save up money.

2. Bankruptcy lasts 1 year but you could be asked to pay for 3 years

Being bankrupt lasts for 1 year and then you are discharged. However, if you can afford to pay something towards your bankruptcy then you will be asked to do so.

3. Bankruptcy will last on your credit file for 6 years

Even after you've completed your bankruptcy your credit file will be impaired for at least 6 years.

4. Your assets are reviewed in bankruptcy

If you have a property or a car then there will be a valuation carried out to determine if there is any equity. In bankruptcy, only your share of the equity can be taken for the benefit of your creditors. So if it's a joint property the other owner would keep their share of any equity.

5. Bankruptcy can affect your employment

It's imperative to check your contract of employment before you enter bankruptcy. Some employers will dismiss their employees who enter bankruptcy.

What Route Into Bankruptcy Should I choose?

There are various ways to enter bankruptcy. The right route matters because there is a cost involved. Furthermore, bankruptcy is different in England, Wales and Northern Ireland compared to Scotland.

England, Wales and Northern Ireland

Creditor bankruptcy: A creditor can make you bankrupt. This means you don't have to pay the fees to enter bankruptcy, however if you have an asset with equity then you may lose this.

DRO: A Debt Relief Order costs £90 and is for specific people who can't afford to repay their debt. You have to meet the strict criteria, such as the debt must be below £15,000.

Court bankruptcy: If you don't qualify for a DRO you will have to visit your local county court and submit bankruptcy papers. This costs £700. If you are unemployed or earn a low income, then this fee can be reduced to £525.


Creditor Sequestration: Your creditor can petition for your own bankruptcy. This means you avoid the bankruptcy costs, but your assets will be considered in the bankruptcy solution.

Minimal Asset Process: If you meet the criteria you could apply for the MAP route to bankruptcy in Scotland for £90.

Certificate of Sequestration: Bankruptcy via a Certificate of Sequestration costs £200 and is applied for when the MAP route is not suitable.

Wednesday, April 03, 2013
Debt Support Trust
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Cant Balance Transfer Debt

When you can no longer balance transfer it may be time to consider a debt solution.

Balance transfers provide ideal support for short term finance problems. However, for one reason or another, the next balance transfer may not be possible. This is often true when you have completed several balance transfers over a number of years and the introductory offers expire, meaning you can't balance transfer your debt anymore.

Balance Transferring Debt

Balance transfer is typically an introductory offer to entice you to move your debt from one credit company to another.

For instance, you may move your credit card debt, overdraft and store card where you are paying 3 rates of interest, to one new credit card with one simple monthly payment. The balance transfer could be held at 0% for 9 months. This introductory offer means you will pay no interest on this money for 9 months.

Balance transfers often incur a fee, thereafter the interest free period means the monthly repayments are going towards clearing the debt - no simply repaying the interest.

Changes to Balance Transfers

The availability of credit has reduced since the credit crunch began. Consequently increasing numbers of people are struggling to move their debt to a more affordable and manageable payment plan.

When balancing transferring debt, it's important to have a long term plan. For example, after the introductory period, what's next? How will you eventually become debt free again? Most importantly, is the balance transfer helping you become debt free or is it just delaying the debt problem for another time?

Once all balance transfers have been explored the next choice, if you can't afford to repay your debt, is a debt solution. There are debt solutions available which can resolve debt and money problems when you can't balance transfer debt anymore.

Solutions to Balance Transfer Debt

When applying for credit via the balance transfer route, a footprint is placed on your credit file. If you are rejected multiple times for credit, in a short period of time, it can alert credit agencies and make obtaining credit even harder.

There are debt solutions which make repaying the debt more manageable. Most debt solutions will help you make a monthly repayment to one organisation and some solutions can even help freeze interest and any charges incurred. Debt solutions can affect your credit rating for 6 years so the pros and cons of every solution will be explained in full detail.

If you believe you have a debt problem and that balance transferring your debt is not going to resolve the debt problem then we're here to help. Debt Support Trust is a charity and our volunteers and advisors will be more than happy to help you with your debt problem. You can telephone us on 0800 085 0226.

Monday, March 25, 2013
Debt Support Trust
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