Sort your debt problems with the Debt Arrangement Scheme


Sort your debt problems with the Debt Arrangement SchemeDebt-related problems are increasingly common and are one of the major sources of worry and stress in the modern world. Often, the longer a debt problem is left, the worse it becomes, especially when you are faced with threats of legal action being taken, or fears over losing your home or possessions.

However, if you are living in Scotland and have debts which you are willing to repay, but require more time to do so, the Debt Arrangement Scheme (DAS) could go a long way towards reducing the related stress and providing you with all of the necessary legal protection.

How It Works

Introduced by the Scottish government in 2004, the Debt Arrangement Scheme is a structured and legally-binding debt solution, intended to allow residents to repay debts at an affordable rate. This is achieved by establishing a Debt Payment Programme (DPP) between the debtor and their creditor(s).

When established, a Debt Payment Programme extends your debt repayment term, making the debt easier to repay. Payments are made to a Payments Distributor, who then divides the money among your creditors, based on the terms of the DPP. Once the covered debts have been repaid, the DAS comes to an end.

A DAS is not intended to reduce the level of debt and still requires a debtor to repay their debt in full. However, the length of the DPP and the amount that is paid each month is based on what a person is realistically able to afford.

Eligibility and Application

In order to be eligible for the Debt Arrangement Scheme, you must be “habitually resident” in Scotland, which means that your main residence must be in Scotland. People who work in Scotland but live elsewhere are excluded, as are people staying in the country temporarily.

A person may be eligible if they have one or more debts that they are struggling to repay, but have a reasonable amount of disposable income left after covering their essential living costs and basic needs.

If you are currently bankrupt, subject to a bankruptcy restrictions order, party to a protected trust deed or are repaying debt under a conjoined arrestment order, you will not be able to register for a DAS. However, after changes were made in 2011, people with unprotected trust deeds may be eligible.

To apply, you must seek advice and assistance from an approved and accredited debt advisor. This debt advisor then acts on your behalf and seeks approval to establish a DPP through the Debt Arrangement Scheme.


If you’ve got a debt problem, the Debt Arrangement Scheme offers a number of advantages over some of the other debt relief options available to Scottish residents.

Unlike with protected trust deeds, participation in the Debt Arrangement Scheme does not require a debtor to turn over equity in their home or vehicles, which makes it an ideal debt solution for people who are unable or unwilling to do so.

Although you will not pay a reduced amount on the debt you owe, assuming your application is successful, all interest, penalties and other charges are frozen. In addition, the DAS protects you fully from any legal action being taken by your creditors in order to recover their money.

Solving your debt problems with a Scottish Trust Deed



A Scottish trust deed is a formal debt management solution. It is the Scottish equivalent to an individual voluntary agreement (IVA) in England. This is a short summary on the Scottish trust deed to help you understand more about what it is, how it works and what its main advantages are. This note is based on the Accountant in Bankruptcy/Scotland’s Insolvency Service’s “Trust Deed Guide” unless stated otherwise.

What is a Scottish Trust Deed?

This is a voluntary agreement between you and your creditors to repay some of what you have borrowed from them. It usually spans four years (although this can vary) and the entire process is managed by your trustee. Do remember that an ordinary trust deed is not binding on creditors, unless they have agreed to it. However, a protected trust deed is much stronger since it is binding on all those that you owe. The trust deed becomes protected if enough of your creditors effectively agree to it.

How it Works

The money required for payments under the trust deed generally comes from income and the sale of any assets, if necessary. Your trustee assesses the extent of your debt problems along with your income levels and proposes the repayment plan which, if agreed and subsequently protected, becomes a legally binding agreement. Of course, your trustee will usually allow you to maintain the things that are needed for your home and family. You can choose your own trustee. In order to protect you, trustees must be qualified practitioners, members of an approved governing body and regulated by legislation. They charge for the work that they do. You are not protected from new creditors if any new debts are incurred after signing the trust deed. Also be aware that once you have a protected trust deed you cannot apply for bankruptcy or a debt repayment programme later on.

Major Advantages

A protected trust deed has several advantages which can help to reduce the stress and worry caused by debt. It has the huge advantage of enabling you to make a single monthly payment during the deed’s term, instead of trying to pay all of your creditors individually. Other big pluses are that interest is frozen on signing the deed and the trustee deals directly with creditors so that you no longer have the headache of doing this yourself. Once your trust deed is protected, the good news is that the rights of your creditors become limited. If you keep to the deed’s terms, your creditors cannot make you bankrupt or pursue you for your debt.

When your deed ends, your trustee will issue a very welcome letter of discharge, if you have complied with the deed’s conditions. This means that you will be discharged from any outstanding debts which were due when you first signed the deed (i.e. they will be written off). Hence creditors can no longer pursue you for unsecured money owed when the deed started (except for certain kinds of debt like court fines).


A Scottish protected trust deed clearly has a number of definite pluses that can save you from the worry and stress that so often goes with serious debt problems. However, signing a trust deed is a major decision and so it is absolutely vital to get sound professional advice when considering this debt management solution. So do take time to speak to a professional debt advisor and ensure you get the information you need.

Managing your Debt Problems with a Debt Management Plan


Managing your Debt Problems with a Debt Management PlanGetting into debt is unfortunately very easy to do, but getting out of debt can be a much more difficult task. Being in debt is unpleasant and unmanageable debt can lead to stress, loss of sleep and a serious loss of enjoyment of life in general. Debt is a very personal thing to many people and it can be embarrassing to admit that you’ve got into debt you can’t get out of. There is no shame in this, however, and there’s a variety of resources available to help you if you need it. One of the best ways of managing debt is through a debt management plan. If you’re in debt that is causing problems and are in need of help, then read on to find out why you may want to consider a debt management plan.

Considering a Debt Management Plan

A debt management plan is designed to ease the burden of debt repayments by reducing the amount you have to pay and allowing you to pay it over a longer period of time. The system enables you to pay off your debts to your creditors by making regular payments to a third party debt management company, who then pay all your creditors on your behalf. It is much easier to manage debt by making one single monthly payment rather than paying many smaller, individual debts. This way each creditor gets paid each month as long as you stick to the plan.

Stick to the Plan

The debt management company will decide the amount that you must pay each month and this will be assessed after taking into account your financial situation. As part of the process the debt management company will contact your creditors on your behalf and negotiate a payment plan that you can afford but it’s up to each creditor as to whether they’ll agree to the plan. None of your creditors are obligated to agree to the proposed debt management plan. If agreement is reached then you will need to pay back this amount consistently and on a regular basis so make sure that it’s an amount you can afford. Missing payments on a debt management plan can lead to loss of faith by your creditors and might result in your debt being passed on to a collection agency, so pick an amount you can afford and be serious about repayments.

Be Aware of what you’re signing up to

Be aware that a debt management company does not offer their services for free. You may be charged a fee to setup the plan and will be charged a fee on each payment you make. Make sure you’re aware of these fees and only go with a debt management company that is authorised by the Financial Conduct Authority. Fortunately the FCA has a register of authorised companies so you can verify their credentials in advance.

Take advice

Debt is extraordinarily common in this day and age and many people are living with unmanageable debt when they don’t have to. The pressures of debt are known to cause serious health and family problems and it can often seem like there’s no way out. The answer is to seek professional debt advice and whilst it may wound your pride to seek debt advice but it’s the right thing to do.

A professional debt advisor is used to sorting debt problems and will almost certainly be able to sort yours and a suitable debt management plan is just one of the options that will be assessed on your behalf. The important part to all of this is to find the best debt solution for your particular problem and one that suits your individual circumstances. So take the appropriate action and get on the road to sorting out your debt and put your life back on track.

How Student Debt Can Get Out of Control


How Student Debt Can Get Out of ControlWhile it is an undeniable fact that possessing a university degree is an enviable asset to bring to the workplace, obtaining funds to achieve that degree and finance the period though university can prove daunting. Furthermore, there is always the underlying possibility that substantial amounts of student debt can be amassed during the entire process. As this can be a particularly difficult topic, it is a good idea to address some of the main issues that revolve around student funding and how it can easily become a problem if the debt is not properly managed and dealt with in an effective manner.

Funding Difficulties

One of the most obvious concerns for many students is obtaining the necessary finances in the first place to see them through their period at university. As university tuition fees have dramatically risen during recent years, students and their parents are now paying more than ever before for a good quality education. Thus, student loans may be the only realistic option available. As is it quite rare for a student to be able to fund his or her own university education, many students have no alternative other than to utilise credit in addition to the basic student loan which can include overdrafts, credit cards or personal loans. In most cases, this will involve a co-signer, as the student is unlikely to have the required credit score to qualify for credit in their own right. The credit process itself can also be complicated and the available credit at the time may not be the most appropriate for a student’s unique financial needs.

Other Considerations

Another topic that needs to be addressed is that even with the help of parents, relatives or friends, a student may indeed feel pressured into accepting credit without checking or understanding the full terms and conditions. This can prove to be a problem if finances get tight as interest rates, repayment periods and items like penalty costs may be anything but accommodating. It is an unfortunate fact that such occurrences are not at all uncommon and students can find themselves taking on more than they can handle.

Accruing High Levels of Debt

Although problems can and do occur throughout the degree period it is on graduation and after that the accumulated debt can become a serious problem. Although standard student loans can be repaid progressively based on income levels, any other debt taken on will not be on such lenient terms. This can obviously be a difficult task in those early days after graduation and when funds are limited. So the effect of compounded debt can easily become a significant problem.

Should the levels of debt become a problem then lender demands, court action and collection agencies can be the result. This is perhaps one of the most undesirable situations for a young graduate to encounter. Not only will such a situation accompany a great deal of emotional stress, but these types of circumstances have the potential to negatively affect a credit rating for years into the future.

Critical Debt Advice

In these situations which are usually unfamiliar to the young graduate, seeking professional debt advice can make a huge difference. The laws and regulations surrounding debt repayment can be complicated and tend to favour the lender. It is therefore always beneficial to obtain professional help with debt than to attempt to resolve such a situation with no help at all. One area in particular where students and graduates tend to have problems is credit cards and they often need help with credit card debt management. By assessing the problem in an objective way, and using their experience and expertise, a debt specialist can provide the aid that is needed to help tackle and resolve the problems students face with debt.

How to write off your debts by going bankrupt


How to write off your debts by going bankruptBankruptcy is a serious step and a big decision to make but for many people with substantial debt problems it can not only be the right decision to make but the only decision that will fully and properly resolve a major debt problem. The decision on whether bankruptcy is the right route to take is relative to your circumstances and not purely dependent on the size of your debt.

Important considerations

If you find yourself in the position where your debts are at a level where, for you in your present circumstances, it is unlikely that you will be able to pay them off in any kind of sensible timescale then bankruptcy would be a consideration. To declare bankruptcy you should be effectively insolvent which means that you can’t pay off your debts as they become due. If you are a homeowner or have other assets of value then this is a key consideration in your decision making process as you may well lose your home and assets to pay off your creditors.

How the process works

You become bankrupt when a bankruptcy order is made against you by the Courts. This can be undertaken through three alternative methods. The first is where you make yourself bankrupt by filling in the appropriate forms and applying to the Court. The second method is where one of your creditors applies to make you bankrupt and the third option is where you have already been in a formal debt agreement such as an IVA and haven’t abided by the terms and consequently the Trustee makes you bankrupt.

Once you have been made bankrupt a Trustee or Official Receiver is appointed, who needs to be a licensed insolvency practitioner, who will take charge of your assets in order to sell them and realise as much as possible for your creditors. You have no real say in the process and the Trustee is obligated by law to follow a strict set of rules and regulations.

Practical aspects

The detailed procedures are different depending on which part of the UK you reside in but the principles of all are very similar consisting of a process that realises your assets for the benefit of your creditors, requiring a payment from your disposable income if you can afford it and then writing off the balance of your debt. The whole idea of the personal bankruptcy process is to provide an effective and legal way of resolving the debt issue and bringing it to a final conclusion that pays whatever funds are reasonably available to the creditors and enables the debtor to be clear themselves of their debt.

If payments are agreed as part of the terms of the bankruptcy then these will normally be made to the Trustee for a three year period. The Trustee will organise all correspondence with your creditors and you will not have to deal with your creditors at all at any time. Any remaining debt is then written off. Discharge from bankruptcy is normally after twelve months.

Taking advice

There is much to be considered with the bankruptcy process and it is always advisable to contact a professional debt advisor for help and advice. They will be able to assess your circumstances and advise if it is the right option for you and hopefully guide you successfully through the process.

UK locations

Covering the whole of the UK

About us

» We are an independant organisation setup to help people across the UK solve their debt problems. Our debt managers help poeple everyday to improve their finances and get their lives back on track. Read more

Get in Touch

Head office:

16 Woodside Crescent,
Glasgow, G3 7UT

0800 007 5021
To view our other UK offices click here.