What are the options for dealing with debt in Scotland?

January 1, 2018

Scotland has a number of formal debt solutions that can help you deal with a difficult financial situation. It’s advisable to take action as soon as possible, however, to prevent your levels of debt escalating when interest and other charges are added.

Obtaining professional advice is key in this respect. An approved money advisor or licensed insolvency practitioner (IP) can explain your options, and help you decide on the best way forward.

They’ll assess your financial position by looking at your income and expenditure, identifying which debts should be given priority, and calculating how much you can afford to pay your creditors each month.

Unofficial ways to deal with debt

Initially, you should try to negotiate with creditors for a more affordable repayment plan. If you contact them as soon as you’re unable to make a repayment, they may be more likely to let you pay over an extended period of time, or at a lower rate each month.

A professional adviser will negotiate on your behalf if necessary, and suggest ways to maximise your income – you might be able to claim a state benefit, for example, or you could be eligible for tax credits.

If your situation is such that only a formal debt procedure is appropriate, however, there are three main options available in Scotland.

Debt Arrangement Scheme (DAS)

The Debt Arrangement Scheme is backed by the Scottish government, and allows you to repay your debts in full without having to deal with creditor pressure or the threat of legal action.

A single affordable payment is made from your disposable income to the scheme administrator each month. As the interest and charges on your debts are frozen, it’s easier to maintain the repayments and regain control of your finances over the longer-term.

Trust Deed

A Scottish Trust Deed provides an alternative to bankruptcy, and lasts for four or five years. With this option, any debt remaining at the end of the term is written off, allowing you to start again without the pressure of debt.

Although your home isn’t at risk as with bankruptcy, you may be required to release equity in year four, by remortgaging. If this isn’t possible, the trust deed term might be extended by 12 months.


Sequestration is the name for bankruptcy in Scotland, and carries with it the most serious ramifications when compared with other options. You pass control of your assets to a trustee, and as a result your home may be sold to repay creditors.

If there is no hope of repaying your debts, entering sequestration offers you the chance of a fresh start, and removes the pressure of being pursued for repayment by creditors.

For more information on your options when dealing with debt, call one of the team at Scotland Debt Solutions for a free initial consultation. We’ll make sure you understand the different debt procedures available for residents of Scotland, and guide you towards the best solution.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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