Choosing between the Scottish debt solutions
No debt solution is right for everyone. This page sets out the factors that decide which options are open to you, so you know what to ask when you speak to an adviser.
Choosing between the Scottish debt solutions comes down to a few key factors: how much you owe, your income and whether it comes only from benefits, whether you own a home and have equity in it, what else you own, whether you could repay in full in a reasonable time, your job, and how you feel about being on a public register. This page explains how each factor affects the options. It does not recommend any of them: a money adviser needs to look at your whole situation.
How do you choose between the Scottish debt solutions?
Start by knowing what the options are. Scotland has its own debt solutions under Scots law:
- Debt Arrangement Scheme (DAS): you repay your debts in full through one payment, with interest, fees and charges frozen.
- Protected trust deed: a formal arrangement run by a licensed insolvency practitioner, usually for 48 months. If it completes, the remaining debts included in it are written off. There are fees and risks.
- Sequestration: bankruptcy under Scots law, usually ending after 12 months, with payments that can run for 48.
- Minimal Asset Process (MAP): a no-fee route into bankruptcy for people with low income and few assets.
- Debt management plan (DMP): an informal plan to repay debts at an affordable rate, with no legal protection.
Two more are sometimes mentioned. A moratorium is not a solution: it gives 6 months of protection from most enforcement while you get advice. Debt consolidation is a new loan that moves your debt rather than reducing it.
Every formal option depends on the Common Financial Tool, the standard way of working out what you can afford in Scotland after essential living costs.
Which factors make a difference?
How much you owe
- DAS and debt management plans have no minimum.
- A protected trust deed needs debts of at least £5,000, including interest.
- Applying for full administration bankruptcy yourself needs debts of at least £3,000.
- MAP is for debts of no more than £25,000, with no minimum. A review has proposed raising this to £50,000, but that is not law yet.
Whether you could repay in full in a reasonable time
DAS is built for people who can repay everything within a reasonable time, and mygov.scot says you need money left over each month to apply. A protected trust deed works the other way: it cannot become protected if 48 months of payments would clear your debts in full. For full administration bankruptcy, you have to show you cannot pay your debts in one of the ways the law sets out.
Your income, and whether it is only benefits
If your only income is benefits, no contribution can be taken from it in a trust deed, although a trust deed based on assets alone is possible. Having certain benefits for at least 6 months is one way to qualify for MAP. The £150 bankruptcy fee is waived for people on Universal Credit and other listed benefits, and a bankruptcy contribution can be set at zero. DAS and debt management plans rely on you having money left to pay.
Your home and the equity in it
In DAS, you do not have to sell your home. In a trust deed, your share of the equity passes to the trustee and may need to be released, often through a lump sum or extra payments. In sequestration, the trustee can sell your home if that is the only way to pay your debts, although a family home needs consent or a sheriff’s authority. You cannot use MAP if you own land or property. See your home and sequestration and your home and a trust deed.
Other assets, such as savings or a car
DAS does not ask you to use savings or sell your car. In bankruptcy and trust deeds, assets may be sold or their value paid in, although a car you reasonably need, worth up to £3,000, is usually kept in bankruptcy. MAP has strict limits: assets worth no more than £2,000 in total and no single item over £1,000, with a needed car up to £3,000 ignored.
Your job
While you are bankrupt (including MAP) you cannot be a company director, MP, councillor or Justice of the Peace, and mygov.scot says jobs such as accountant or solicitor may be affected. A trust deed does not carry those legal bans, but some employers, most often financial institutions, do not allow staff to sign one, and it may restrict you from being a director. DAS and debt management plans are not bankruptcy, so those bans do not apply. Check your contract or professional body’s rules either way.
How you feel about a public register
Every formal option is recorded publicly. A trust deed, sequestration, MAP and a moratorium go on the Register of Insolvencies, which anyone can search. A DAS programme goes on the DAS Register, which shows your name, address and the dates but not your debts. A debt management plan is not on a public register, although it can still show on your credit file. All the formal options affect your credit rating for 6 years or more.
How do the factors point to different options?
This table is a starting point for a conversation with an adviser, not a recommendation. Most people have several of these factors at once, and they can pull in different directions.
| If this applies to you | Options that can fit | Options it rules out or counts against |
|---|---|---|
| You owe less than £3,000 | DAS, a debt management plan, MAP if you meet its other rules | A trust deed (£5,000 minimum) and full administration bankruptcy (£3,000 minimum) |
| You owe more than £25,000 | DAS, a trust deed, full administration bankruptcy, a debt management plan | MAP |
| You could repay everything in a reasonable time | DAS, a debt management plan | A trust deed (cannot be protected if payments would clear the debts) and bankruptcy |
| You have nothing left after essential costs | MAP, full administration bankruptcy (contribution can be zero), a trust deed based on assets alone if you have them | DAS and a debt management plan, which need money to pay |
| Your income is only benefits | MAP after 6 months on certain benefits, bankruptcy with the fee waived | A trust deed needing income contributions, DAS unless you have money left over |
| You own a home with equity | DAS, a debt management plan | MAP (not available), and a trust deed or bankruptcy put the equity at risk |
| You have savings or valuable items | DAS, a debt management plan | MAP if over the limits, and a trust deed or bankruptcy may take their value |
| Your job would be affected by bankruptcy | DAS, a debt management plan, possibly a trust deed | Sequestration and MAP |
| You do not want to be on a public register | A debt management plan | All formal options, including DAS |
| Sheriff officers are already taking action | A moratorium, for 6 months of protection from most enforcement while you get advice | A debt management plan, which is not legally binding |
Want to talk through which options could fit your situation? Tell us a little about your situation and a licensed insolvency practitioner firm will call you to go through every option, including ones that are not a trust deed.
May not be suitable in all circumstances. Fees apply. Your credit rating may be affected. Free, impartial advice is available from MoneyHelper and other services.
What can a table not tell you?
- Priority debts come first. Council tax, rent and mortgage arrears can lead to serious action, so an adviser will usually look at these before anything else.
- Some debts are never written off. Fines, student loans and debts from fraud survive bankruptcy and trust deeds, and a mortgage is dealt with separately.
- Costs differ. DAS has no charge to set up, MAP has no fee, and the £150 bankruptcy fee is often waived. A trust deed has trustee and AiB fees taken from your payments and assets.
- Risks differ. If a trust deed fails, creditors can pursue you again and the trustee can petition for your bankruptcy. If a DAS programme is revoked, creditors can add interest again.
- Your priorities matter. Keeping your home, finishing sooner, protecting your job or avoiding bankruptcy may matter more to you than the total you repay. Tell your adviser.
Scotland is different. Individual voluntary arrangements (IVAs) and debt relief orders are not available here, even though you may see them advertised. If you have read about debt options on a UK-wide site, check the information is for Scotland.
For side-by-side detail on two common choices, see a trust deed or sequestration and a trust deed or DAS.
Where can you get help choosing?
Free, impartial debt advice is available to everyone in Scotland, from services such as MoneyHelper, Citizens Advice Scotland, Advice Direct Scotland, StepChange and National Debtline. They can look at every option with you, and some can set up a DAS or help you apply for bankruptcy. Our page on free debt advice in Scotland has their numbers and opening hours.
You can also talk to a licensed insolvency practitioner firm, which should explain all your options, not only a trust deed. We are not a debt charity and do not give advice. If you ask us to, we pass your details to a licensed insolvency practitioner firm, and they may pay us a fee. How our service works explains this.
Official sources
Common questions
Which debt solution is best for me in Scotland?
There is no single answer, and a website cannot give you one. It depends on how much you owe, your income, whether you own a home, what else you own, whether you could repay in full, your job and what matters most to you. A money adviser can assess all of this with you. Free, impartial advice is available from services such as MoneyHelper, Citizens Advice Scotland and StepChange.
Can I choose a debt solution myself?
You can read about the options, but most formal solutions need an adviser or insolvency practitioner to set them up. A Debt Arrangement Scheme has to go through a DAS approved money adviser, bankruptcy needs money advice first, and a trust deed is arranged by a licensed insolvency practitioner. A moratorium is the one you can apply for yourself.
What if I do not qualify for any debt solution?
Talk to a free money adviser anyway. They can go through your budget with you, look at priority debts such as rent and council tax, and check whether your situation might change what is open to you. A moratorium can also give 6 months of protection from most enforcement while you work things out. It does not freeze interest.
Can I change debt solution later?
Sometimes. If your circumstances change, an adviser can look at your options again. Ending a solution early can have consequences, though. If a protected trust deed fails, creditors can pursue you again and the trustee can petition for your bankruptcy, and if a DAS programme is revoked, creditors can add interest again. Ask what would happen before you commit to anything.
Related guides
- Free debt advice in Scotland Free, impartial debt advice services in Scotland, with phone numbers and opening hours.
- Trust deed or sequestration? A protected trust deed and bankruptcy in Scotland compared side by side.
- Trust deed or DAS? The Debt Arrangement Scheme and a protected trust deed compared side by side.
- Trust deed pros and cons The advantages and disadvantages of a trust deed, set out side by side.