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Debt Help Scotland – Complete guide, FAQs & More

Debt Help Scotland

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

Debt problems can occur no matter where you live and if you live in Scotland, you’re fortunate enough to have a variety of debt solutions to choose from. 

That being said, not every debt solution is suitable for every financial situation. 

That’s why in this post, I’ll be looking at the debt solutions available to Scots and determining which one would be best for you depending on your circumstances. 

Debt Solutions in Scotland

While there are a number of different debt solutions available in Scotland, all of them are aimed towards individuals that have specific types of financial circumstances. 

This is why it’s important for you to do your research and seek advice from a professional before you make any decision about which solution to go for. 

The debt solutions that you can opt for may be formal or informal. A formal agreement is legally binding which means that your creditors will have to abide by its terms under all circumstances. 

On the other hand, an informal agreement is not legally binding which means that your creditors can still take action against you even if they’ve entered into the informal agreement with you. 

Debt Solutions and Your Credit Score

Before I start talking about debt solutions, it’s important for you to know that almost all of them will have a negative impact on your credit score (or credit rating). 

Dealing with debt can be difficult and when you enter into a debt solution, it gets recorded in your credit file and stays there for six years after the date on which it was put in place. 

Entering into a debt solution will have a negative impact on your credit score. Having a low credit score will mean that you will have trouble securing any type of credit in the future. 

You will face difficulties in actions such as: 

  • Getting a loan 
  • Buying items on credit
  • Opening a new bank account 

Now that you know about the effect entering into a debt solution will have on your credit rating, let’s start talking about them.

Trust Deed

A trust deed can be defined as a voluntary agreement between you and your creditors. The agreement states that you will pay back a portion of what you owe in the form of monthly repayments. 

Trust deeds typically last about four years. At the end of this four-year period, any remaining debt that you have is written off. 

Trust deeds are an example of a formal debt solution. This means that creditors have to abide by its terms under all circumstances. They are legally prevented from taking further court action against you while your trust deed is in place. 

A trust deed can be a worthwhile solution for you if you have unsecured debts such as credit card debts, personal loans, overdrafts, etc. and if you earn a monthly surplus income that is sizable enough for you to make a reasonable monthly payment consistently.

A trust deed can also be appropriate if you have valuable assets that can be sold off in order to pay for your debts.

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Debt Arrangement Scheme (DAS)

A debt arrangement scheme is a free debt management solution available in Scotland which allows you to set up a debt payment programme (DPP)

A DPP allows you to pay back your debts over time at a rate which you can afford. Please note that you will be protected from your creditors while you are setting up your DPP. 

You can apply for a debt arrangement scheme if: 

  • You have a single or multiple debts
  • You reside in Scotland
  • You make an application for it through a licensed debt arrangement scheme money adviser
  • You have a sizable disposable income every month once you’ve attended to your essential needs. 

Debt Management Plan (DMP)

Debt management plans are an example of an informal debt solution. This means that it’s not a legally binding agreement between you and your creditors. 

While a DMP is in place, your creditors can still take action against you such as take legal action to make you bankrupt. 

That being said, it’s very rare for this to happen as long as you’re making your monthly payments on time and in full. 

The great thing about a DMP is that it’s extremely flexible and since it’s an informal solution, changes can be made to its terms fairly easily if your circumstances happen to change. 

It’s important that you don’t opt for a debt help company which charges a fee for their services. If you need free debt advice or a professional to set up your DMP, always opt for a debt charity or a debt help agency which does not charge you for its services. 

Some great debt charities that you can go to for debt advice include Stepchange and Payplan.

Bankruptcy (Sequestration)

Bankruptcy is known as sequestration in Scotland and can be opted for if you have no way of paying off your debts. 

When you are bankrupt, any assets you have are seized and sold off in order to raise funds to pay off your debts. 

After a certain period (usually one year), most of your unsecured debts are written off and you can start with a clean slate again. 

In order to apply for sequestration, you need to have a formal certificate for it that is given to you by a licensed individual such as an insolvency practitioner or a debt adviser.

Minimal Asset Process (MAP) 

MAP can be thought of as Scotland’s version of a Debt Relief Order (DRO). It is aimed at individuals with low income and little to no assets. 

You can apply for MAP bankruptcy if: 

  • You have a car that is worth less than £3,000
  • You have no asset that is worth more than £1,000
  • Your total assets are not worth more than £2,000
  • You’re not a homeowner. 


While there are many different solutions to choose from in Scotland in order to become debt-free, it’s important to seek debt advice from a professional first. 

Make sure to assess your financial circumstances before you make a decision about which debt solution is most suitable for you.


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