Living on a debt solution

Can I change from one Scottish debt solution to another?

Posted 21 March 2013

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Your circumstances can change during a debt solution. Solutions are quite flexible and may be able to accommodate temporary changes, but if your financial circumstances change completely, you may need to move to a different one.

You can't just change your debt solution on a whim. For example, you can't just decide that you'd rather be on a Trust Deed than the Debt Arrangement Scheme. It has to be obvious that this would be the best solution for your needs.

Sometimes, for example, your financial circumstances can change, and your current debt solution may not be right for you anymore. Debt solutions in Scotland can be quite flexible, however - so if the change in your finances is only temporary, your solution may be able to change until you get back on track.

So if you're having trouble with your payments, don't worry about it - tell the person who organises your debt solution. They may be able to change your solution or move you onto another one that's more appropriate for your needs. You'll never be asked to pay more than you can actually afford on any Scottish debt solution.

How can my debt solution change?

In debt solutions such as Trust Deeds and the Debt Arrangement Scheme, you should tell your Insolvency Practitioner (IP) or approved Money Adviser about any changes in your circumstances. The earlier you tell them, the earlier they can sort it out for you.

For example, you might have to pay for some expensive car repairs, and you can't afford your payments into your debt solution for a couple of months. If this happens, you should explain your circumstances person responsible for your debt solution. They may be able to reduce or even stop your payments until you're able to make the full payments again. This is called a 'payment holiday'.

Usually the months you miss will be added onto the end of your debt solution - so your lenders still get the amount you all agreed upon.

If you've been made bankrupt, and you've been making payments, you won't have to make them anymore  if you can't afford to. That's because you only have to make payments towards your bankruptcy if you actually have enough to after all your important monthly payments have been made. You'll just have to show your budget to your trustee and tell them how your circumstances will prevent you from making payments.

When would I have to change my debt solution?

If the change in your finances is more permanent (or due to last a long time) - for example, if you fall ill and you can't work - you may need to switch to a different debt solution.

You'll have to contact your Insolvency Practitioner, Money Adviser or trustee and explain your situation.

To find out more about the different Scottish debt solutions, click here.

If you're on the Debt Arrangement Scheme, for example, and you lose your job due to illness, you won't be able to make the agreed payments anymore. Your Money Adviser may therefore decide that bankruptcy would be a better option for you - because you wouldn't have to make any payments you couldn't afford.

You don't need to decide which debt solution is right for you on your own. If you have any questions, or you want to talk to a debt expert about your circumstances, use our debt solution finder.

by Kyri Levendi

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.