Debt advisor urges government action

A Dunfermline-based financial advice firm is urging the Scottish Government to take action in an effort to drive down record levels of consumer debt.

Industry experts from TC Debt Solutions have called for “more extensive promotion” of the Scottish Government’s Debt Arrangement Scheme Scotland (DAS), an alternative to insolvency which allows individuals to manage their unsecured debts.

According to a survey by trade union body TUC, household debt in the UK is now at a record high of £15,385 per home. This figure excludes mortgage debts, but includes consumer debt items such as credit cards, bank overdrafts, payday loans and store cards.

The DAS initiative, which is unique to Scotland, was set up in 2004 but uptake remains relatively low, with around 12,000 live DAS cases across the country.

The legally binding scheme protects an individual’s assets and stops debt recovery action by any creditors, while allowing the person to make repayments on the debt owed by freezing interest payments.

Richard Gardiner, a partner at TC Debt Solutions, said: “DAS offers individuals and families across the country a planned and sustainable way out of debt – but a lot of people don’t even know it exists.

“There is a real chance here to make a positive impact on reducing debt across Scotland and improving the life chances of so many people in the process.

“This is why we are calling on the Scottish Government to promote DAS much more widely.

“Being in a DAS means more than just settling your debts in an affordable way and over time: it also removes some of the stresses that come with trying to service unaffordable debts with high interest rates, and opens up more possibilities by helping to set a clear budget to hopefully avoid the risk of getting into financial difficulties again.”