Consumer debt solutions

As the economic crisis in Europe and throughout the world continues to deepen consumer debt solutions are being sought by more and more people in order to relieve not only financial stress but also mental stress. Many of us forget that the pressure of being in debt and struggling to finance these debts not only affects our finances in the short term but can also lead to physical and mental pressure which can tip some people over the edge. Therefore it is vital that if you are struggling to finance your debts you should look towards the most relevant consumer debt solution for you.

Debt Consolidation Scotland

Debt Consolidation in Scotland is becoming more commonplace with many people finally admitting there are struggling to pay their debts and looking to consolidate these into one affordable loan. However, if you are looking towards debt consolidation it is vital that you take professional financial advice because in many cases you may struggle to actually pay off the long-term debt consolidation loan.

There is no point taking on a debt consolidation loan if you’re unable to afford it because it will only delay the inevitable and you will need to take further action. The initial lift you may receive upon thinking that you have resolved your immediate financial problems could turn into an even worse situation and leave you at rock bottom.

Trust deeds Scotland

Trust deeds in Scotland are a unique way of ring fencing all your debts under the management of a court-appointed trustee and paying back only what you can afford during the time of the trust deed. Trust deeds are not for everybody and again you will need to take professional financial advice to see that you are taking the correct route but there is no doubt they have attractions because after the five-year tenure of the trust deed the idea is that any outstanding debt is written-off.

In order for a trust deed to be successfully put in place your existing creditors will need to vote in favour of the transaction. Current regulations state that if more than one third of the value of your debts vote against a trust deed or 50% of the number of creditors then your trust deed will not go through. In reality if you are in financial trouble there is little reason why your creditors would not vote in favour of a trust deed whereby they would at least see some return on outstanding debts.


Bankruptcy is an option which many people fear most but in reality it is perhaps the right course of action for some people. Under guidance from professional financial advisers you need to look at your overall finances, overall income, overall assets and your overall expenses. If you are struggling to finance your debts or perhaps you have lost your job in the short term this could lead to significant pressure upon your finances, your physical well-being, your mental well-being and your family life. It is therefore vital that you take the correct course of action if you are struggling to survive on a daily basis.

It would be wrong to suggest that bankruptcy is the easy option because indeed not all bankruptcy applications will be successful. There are also drawbacks with regards to your credit rating, access to credit in the short to medium term and other issues to take into account. However, for those desperate enough to consider bankruptcy, and indeed for those where their situation does warrant it bankruptcy action, access to credit in the short to medium term should not be your first priority.

What are the main reasons for consumer debt?

There are many reasons why consumers seem to fall into the debt trap and while very few of these happen overnight they are more common than you would expect. Some of the main reasons why consumers fall into debt include: –

Credit card debt

Credit card debt is perhaps one of the major reasons why the vast majority of us fall into financial trouble. It is very easy to flash your flexible friend when you need something which in reality you know you cannot afford at the time. The ability to buy now and pay later is too much of an attraction for many people and indeed Christmas is a time of year when many people overextend their finances and end up paying them back for months if not years to come.

Even though there have been some changes in credit card interest rates there is no doubt that they are potentially disastrous if you have a significant outstanding balance. Some credit card companies will charge you in excess of 20% per annum on outstanding debt and if you are unable to cover the interest charge on a monthly basis then this will be added to your outstanding debt and your debt will grow and grow.

The good life

It seems bizarre to say that many people get themselves into financial problems purely and simply because they live the high life when their finances cannot afford it, but it is the truth. There is competition in all areas of life and many people prefer to put on some kind of front suggesting they are “wealthy” when in reality they are living a life dominated by debt. While these are situations which should be the easiest to resolve, i.e. only spend what you can afford, very often the debt mountain is far too big to finance before some people come to their senses.


Gambling and the “good life” are two issues which may block the agreement of any trust deed in Scotland as a way of sorting out your finances. This because the authorities deem these two issues to be self-inflicted and creditors are of the opinion that why should they help of somebody who was overspent on purpose. In reality we can all see where they are coming from but addictions and other pressures in everyday life can lead to many people doing things which they would not normally consider.

However, if you are financial in trouble because of gambling or overspending in relation to the “good life” then you need to be aware that sorting out your problems may not be as easy as you would hope.

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