Unemployment has always been a key driver of debt problems that can, later, manifest into the need for debt solutions like a Scottish trust deed. In a recent survey the Netmums website has illustrated the type of difficulties that women and their families are currently facing.
According to Netmums around 2000 women with children responded to their survey. Many of the published results are shocking reading. More than sixty per cent of respondents lacked sufficient money to get through to the end of the week, with a similar number adamant that their household income has reduced over the past twelve months. As prices have increased during that period, many women are clearly being hit hard financially from all angles. Insolvency figures reflect this, and protected trust deed advisers acknowledge that the proportion of their clients who are female has risen in recent times.
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For many the problems are being compounded by already having credit commitments. It's not unusual for families to pay out a large percentage of their monthly income on debt repayments leaving them short of cash for essentials thereafter. This inevitably leads to more credit being obtained just to get by. The danger of this type of situation is clear and apparent as the total amount owed will increase. Many people that sign a trust deed in Scotland find it difficult to explain where all of the borrowed money has gone, but upon reflection the bulk of the debt total is typically accumulated interest.
A side-effect of a debt problem can be making severe reductions in spending on certain things which would not usually be considered to be discretionary spending. 20% of the mothers that took part in the Netmums survey reported that they had forsaken meals in order to prioritise feeding their children. Obviously nobody would lightly enter into a serious debt solution such as Scottish trust deeds, but when people do priority is placed upon ensuring that basic needs such as food are adequately provided for before ever contributing to the unsecured debts encompassed within the trust deed itself.
Even those that aren't today struggling with debt may well find themselves doing so in the future. Trust deed advisers will recognise the picture presented by 25% of the women in the survey that everyday household needs are being covered with the use of credit cards. A classic sign of debt or financial distress, such a scenario can be a precursor to acknowledging that debts have reached a level of severity at which a Scottish trust deed or sequestration (bankruptcy) has become necessary.
Trust deed firms are also finding that their clients are commonly using payday loans in the run-up to seeking debt advice. Payday loans are an extraordinarily expensive way to borrow, to the point that some protected trust deed advisers have formed the view that, for most people, if you think you need a payday loan you probably cannot afford it. 5% of the people in the survey of mothers said they were using payday loans regularly.
The sad fact is that things are going to get worse before they get better. Hundreds of thousands of workers within the state sector will lose their jobs in the next few years, and the vast of these workers are women. Scotland is especially reliant on state employment of workers so the impact is likely to be significant. Fortunately, if the worst were to happen to them, residents of Scotland do have access to a broad range of debt remedies which will be applicable according to individual circumstance and need. A Scottish trust deed is one such option but for other people remedies like the debt arrangement scheme, a debt management plan, or even bankruptcy, will serve their situation best.
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