Home > case studies
Debt Management
Fraser is aged 25 and lives in Arbroath. He is living in a rented property with a colleague from his work. Fraser works as a call centre operator and earns an income of £13,000 per year.
Fraser was unable to support himself on his wages and he turned to credit cards and personal loans to help pay his rent and purchase household necessities.
After 2 years of supplementing his income with credit cards and loans the interest repayments became too much. Fraser was paying off his interest each month but the money he borrowed was never decreasing. Fraser realised that the £6,000 debt he had accrued was impossible to clear without help so he sought advice from Debt Solutions Scotland.
We reassured Fraser that there was a debt solution that could help him. After a 15 minute telephone consultation we suggested that a debt management plan would be the most appropriate solution. The debt management company managed to negotiate with Fraser’s creditors and freeze the interest on his unsecured debts. Now, he will pay one company a set monthly contribution and that will be distributed between his 4 creditors. Fraser can look forward to being debt free in 2 ½ years.
Protected Trust Deed
Valerie is 28 and has been living with her long term partner for 2 years. They live in rented accommodation and Valerie has unsecured debts of £30,000.
Her partner, John, would like to help Valerie out of her debt problems but he just makes enough money to cover his own bills. As a result, Valerie called Debt Solutions Scotland for free debt advice.
Valerie explained to our advisor that she was struggling with her credit cards and personal loans before she entered a 6 month period of unemployment. The personal loan and credit cards enabled Valerie to pay her bills and household expenses until she found a new job. Now that Valerie is in employment again she wants to be debt free.
Debt Solutions Scotland suggested that the best option would be a Protected Trust Deed. Valerie wanted to pursue the Trust Deed and make a formal agreement with her creditors whereby she will pay them £290 per month for 36 months from her disposable income.
Once the creditors accepted Valerie’s proposal the agreement was legally binding and as long as she meets her monthly contributions then she will be debt free after 3 years and will have only paid back a percentage of the money she borrowed.
Remortgage
Leanne from Airdrie is a 46 year old homeowner with unsecured debts totalling £9,000. Leanne divorced her husband 4 years ago and has since been living on her own.
When her divorce was finalised Leanne had approximately £4,000 which she used as a deposit to buy a new flat. She does not have children however she is trying to support herself on her salary of £11,000 per year.
Leanne could not pay her bills on time and had to resort to using credit cards. Eventually, she had 3 credit cards totalling £9,146 whereby she was only paying the minimal payment every month.
Leanne had heard about Debt Solutions Scotland from a friend and decided to call us. We quickly identified that Leanne could remortgage her property which had available equity of £11,000. Leanne chose to remortgage and pay off her debts within two months. We also advised Leanne to downsize her property as she could otherwise find herself in debt again.
Loan Restructuring
Stephanie from Glasgow is 27 years old and lives in a rented flat. She works two jobs to try and pay her mortgage. Stephanie’s income is £1,400 every month and her unsecured debt is £8,000.
Stephanie has taken out a £3,000 unsecured loan and has been juggling 6 other credit cards with varying amounts of unsecured debt. The 7 different creditors are charging different interest rates and it has been difficult for Stephanie to keep on top of her debt and make her repayments on time.
Stephanie found our website on the internet and spoke to a Debt Solutions Scotland advisor over the telephone. In the end Stephanie had a couple of options but the best advice was to restructure her loans. This means that she will take out one loan large enough to cover her £8,000 debt and will only pay one low rate of interest to one creditor.
Stephanie has managed to save money by only paying one interest rate instead of 7 and because she can now meet the repayments she will be able to pay off her debt without the hassle from creditors.