The number of people starting the Debt Arrangement Schemes (DAS) shot up by 35% between April and June this year, and helped thousands of Scottish citizens avoid bankruptcy, says debt management company Simple Financial Solutions.
Scotland’s Insolvency service, Accountant in Bankruptcy (AiB), has this week revealed second quarter insolvency figures of 5,319 (of which 2,947 were awards of bankruptcy), a drop of 1% over last year’s second quarter’s figures at the same time, but a rise of 25% from the first quarter of 2011.
A total of 643 Debt Payment Plans were awarded under the Debt Arrangement Scheme
, which has increased 30% since this time last year and is up 35% from the last quarter. This is good news according to the AiB report: “There has been an increases awareness of DAS, due to development of changes brought in on 1 July last year aimed at widening access to the scheme and offering debt management as a viable option to more Scots than ever.”
Scotland’s Minister for Enterprise, Energy and Tourism, Fergus Ewing, said: “AiB’s work to raise awareness of the Debt Arrangement Scheme and its benefits – such as the freezing of interest and charges for debtors and at least a 90% return for creditors – has been reflected in the increase in take-up of the Scheme.”
“With more people now accessing DAS, figures suggest it is offering a sensible option to Scots struggling with debt who have sought advice early on.”
A spokesperson for Debt Solutions Company, Trust Deed Scotland
, said: “The number of individuals on DAS is set to grow quickly over the coming months because of changes to the scheme that make it more accessible to a wider range of people. This is good news – finally hard-working Scottish citizens will have access to a method of managing their debt without having to declare insolvency using Scottish Trust Deeds or bankruptcy.”
Of the different ways insolvency can be applied for, 2,459 were from individuals applying themselves, 1,305 took the Low Income, Low Asset (LILA) route, 759 filed for bankruptcy through Certificates of Sequestration and 2, 372 people entered a Protected Trust Deed. The latter was a 51% increase over last quarter and a 6% rise since last year.
“Despite DAS probably being the most flexible debt management tool available to help avoid insolvency, judging from the figures there are still a lot of people out there who aren’t aware of it or the benefits of it compared to a Protected Trust Deed or bankruptcy,” said Dave. “For many people who want to pay off all of their debt over a longer period of time, the Debt Arrangement Scheme is the ideal solution to helping them get debt free without many of problems and stigma inherent with bankruptcy.”
Media Contact Details
Name: Dave Johnson
Company Name: Scottish Trust Deed
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