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Debt Relief Order Scotland – What You Need To Know

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By
Scott
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Scott Nelson

Managing Director

MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.

Learn more about Scott
&
Janine
Janine Marsh Profile Picture

Janine Marsh

Financial Expert

Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.

Learn more about Janine
· Feb 6th, 2024
Could you legally write off some debt? Answer below to get started.

Total amount of debt?

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

Featured in...
Debt Relief Order Scotland

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

In Scotland, managing debts can be tricky, but don’t worry, you’re in the right place for answers. Every month, over 170,000 people come to our website looking for guidance on their debt issues, so you’re not alone in this!

This article will help you understand:

  • The different ways to clear your debt in Scotland.
  • How to choose the best option for you, from the Debt Relief Order to the Minimal Asset Process.
  • How to manage different types of debt, like Council Tax Arrears.
  • The steps to take if you’re struggling with unaffordable debt.
  • Answers to frequently asked questions about debt in Scotland.

We know how hard it can be to face debt problems, as some of our team members have been in the same boat. Here, we’ll give you the facts and help you find a solution that works for you. Let’s get started on finding the best way to manage your debts in 2023.

Could you legally write off some debt?

There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

Debt Arrangement Scheme (DAS)

The most widely recognised debt relief apparatus in Scotland is known as a Protected Trust Deed. Moreover, with both MAP and DRO, there is a Scottish likeness insolvency known as Sequestration

Along with debt advice and other measures that require you to pay off your debts, there is the Debt Arrangement Scheme which is available to Scottish citizens.

Debt Relief Order versus Minimal Asset Process? 

Sequestration or Bankruptcy is the most serious type of insolvency, as it carries ramifications for mortgage holders and those with specific jobs.

Going into either DRO or MAP is a choice that shouldn’t be messed with, unless you are taking debt advice from a certified professional.

Albeit, both DRO and MAP are formal debt arrangements. As such, you don’t have to show up in court. 

Debt Relief Order Scotland
Source: MSE Forum.

Here’s a brief comparison of a Debt Relief Order (DRO) and a Minimal Asset Process (MAP)

Minimal Asset Process (MAP) Mininal Asset Process (MAP)
Only applicable in England and Wales Applies in Scotland only
Typically lasts 12 months Typically lasts 6 months
To be eligible, your debt must be under a certain limit, you must have few assets and low disposable income To be eligible, your debt must be under a certain limit, you must have few assets and low disposable income
Cover most unsecured debts but student loans might be excluded Covers only a few unsecured debts
Has an adverse impact on your credit rating Hurts your credit rating
Some restrictions apply during DRO (e.g. borrowing more than a certain amount) Some restrictions apply during the MAP (e.g. borrowing limits)

How a debt solution could help

Some debt solutions can:

  1. Stop nasty calls from creditors
  2. Freeze interest and charges
  3. Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:


Situation

Monthly income £2,504
Monthly expenses £2,345
Total debt £32,049

Monthly debt repayments

Before £587
After £158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

Get started

Information about expenses 

During the new Coronavirus Bill revisions, the Scottish government declared that until the finish of September 2020, the expense to apply for MAP had been diminished to £50

Be that as it may, this charge has been deferred for individuals on specific advantages. In the remainder of the UK, the Debt Relief Order application expense is £90. You have to pay the full fee before you submit your application.

Again because of ongoing Government revisions, the measure of debt that you can owe to be qualified for a Minimal Asset Process is at least £1 500 and a limit of £25,000. Typically, this would be a limit of £17,000. 

The most extreme measure of debt needed to qualify for a Debt Relief Order in England, Wales or Northern Ireland is £30,000

You can’t have any significant bearing for either the Debt Relief Order or Minimal Asset Process if you are a property holder. And if you have a vehicle esteemed at over £3,000, you can’t matter for a Minimal Asset Process. 

Debts are discounted with a Debt Relief Order following a year, while the Minimal Asset Process span is a half year

Debt Relief Order or Minimal Asset Process may not be the most ideal method of getting your account in the groove again because of the prohibitive nature and effect on your capacity to acquire credit for income purposes. 

This applies if you are independently employed or have private ventures.

» TAKE ACTION NOW: Fill out the short debt form

What debts can be remembered for a DRO/MAP? 

Most debts without collateral can be remembered for a Debt Relief Order, or Minimal Asset Process in Scotland, including:

Debts that can’t be remembered for a Minimal Asset Process or Debt Relief Order include:

  • Debts that may have been taken out falsely
  • Child maintenance
  • Court fines
  • Student loans

Is the Minimal Asset Process appropriate for you? 

If you want to see whether MAP liquidation is appropriate for you, I suggest you seek free debt advice. At the point when you’re searching for Debt Help in Scotland, we would consistently prescribe that you address a certified debt professional

You may ask yourself whether a Trust Deed is ideal for me or if a DAS is justified, despite any trouble. If you are thinking about connecting for help with debts, debt counsel audits are an astounding spot to begin. 

You can further enquire about help from options and services available in the form of disseminated information.

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.

Natasha

I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

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Reviews shown are for The Debt Advice Service.

Options for clearing your debt – Scotland

The first of these elective answers for the Debt Relief Order in Scotland is known as a Minimal Asset Process which is a method for discounting debts that you would battle to reimburse within a given time. 

There is a difference in details of the diverse administrative frameworks in Scotland versus the remainder of the United Kingdom. Similarly, there are contrasts among IVAs and Trust Deeds

Key solutions available in Scotland

There are various debt solutions available in Scotland in the form of advice. Each depends upon which Financial Conduct Authority and money advice service you go to.

These solutions include:

  • Trust Deeds
  • Individual Voluntary Arrangement
  • Money advice services
  • Regulated by the financial expert
  • Other money-related free debt advice charities like MoneyHelper and Citizens Advice Scotland.

FAQs

Do I have to pay for debt advice?
It depends, sometimes the free advice that you get from a website may be free. In this case, the free advice comes in the form of services or advice service, it might not be free. So you have to check if the information available is palpable or not.
When should I get help?
If all solutions available for a given period of time fail and are not encouraging credit rating or if you think that the options available for you are not of any help. A lot of times, an official website may show that they help people and that they may help you in money advice. Make sure you seek advice service that is Scottish.
Will it affect my credit score?
It depends upon the advice that is given and if it is legally binding to your credit score or not. A lot of times, it does tend to affect your credit score so considering all possible options is the best way to move forward.
Can you be taken to court for debt in Scotland?
It depends if you’ve violated any guidelines, agreement between the insolvency practitioner and the authorised and regulated body. It may also depend on if you’ve misused Individual voluntary arrangement principles. Seek advice from a professional at all costs.
Could you legally write off some debt?

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

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The authors
Scott Nelson Profile Picture
Author
MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.
Janine Marsh Profile Picture
Debt Expert
Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.