What are the alternatives?

Debt Arrangement Scheme | Guide

The Debt Arrangement Scheme isn’t the only debt solution that’s available to Scottish residents. It’s good to understand all of the options available, so speak to a Money Advisor about which is the most suitable for your situation.


Sequestration, also known as bankruptcy, may be an option if you realistically can’t afford to repay your unsecured debts in a reasonable amount of time.

You will only have to make payments towards your debts if you can afford to, and if you can, you’ll pay back as much as possible. These payments can continue for up to four years and will take into account all of your essential living costs, which includes rent, mortgage, food, utilities and travel costs. You’ll usually be discharged from sequestration within a year and whatever debts you can’t afford to repay will be written off.

There are consequences associated with sequestration. As an example, some of your assets may be sold to help repay your debts. If you own your own home, this may include your property. As with any default registered on your credit report, it will stay there for six years, and this will affect your ability to obtain credit during this period and potentially beyond it too, as you may be asked if you’ve ever been sequestrated when you make credit applications in future. Records of your sequestration will also appear in the Register of Insolvencies until two years after you’re discharged, which is publically available.

Find out more about sequestration here.

Minimal Asset Process (MAP)

The Minimal Asset Process (MAP) is a simplified route into sequestration for Scottish residents, however you need to meet strict criteria to be eligible. This includes having no income left to pay for your debts after paying for all of your essential living costs, and having relatively few valuable assets.

Your payments on these unsecured debts will be suspended for the period MAP runs for, and any outstanding unsecured debt included in your MAP will be written off if completed successfully. MAP is a shorter process than sequestration and you could be discharged in as little as six months.

As MAP is a form of bankruptcy, it does have consequences. For example, it will have an impact on your credit rating for six years after it begins, and could continue to have an impact beyond this time period. Also, your details will appear on the Register of Insolvencies until two years after you are discharged, which is a public register.

Find out more about MAP here.

Trust Deed

A Trust Deed is a form of insolvency available to Scottish residents that allows you to pay back as much of your unsecured debts as you can, usually over a four year period. Any included debt that is left outstanding after its completion will be written off. If you’re not able to repay your unsecured debts within a reasonable amount of time, a Trust Deed may help.

As long as your lenders don’t object, you’ll make one regular payment to your Trustee, who will then distribute the money to your lenders after his/her costs. The payments that you make will be affordable and sustainable for you and will take into consideration your essential living costs, which includes your rent, mortgage, food, utilities and travel costs.

Trust Deeds do have consequences. As an example, if you’re a homeowner, you may have to release some of the equity in your home to repay your debts. If this isn’t possible your Trust Deed could be extended by an extra 12 months. Trust Deeds are documented in the Register of Insolvencies, which is publically available. If your Trust Deed fails, you may face sequestration.

For our full guide on Trust Deeds, click here.

Debt Management Plan

If meeting your current monthly payments to your unsecured debts is a struggle, but you could afford to make a lower payment every month, a Debt Management Plan may be a suitable solution. You can continue making payments towards your unsecured debts, while ensuring that you’re left with enough money to cover your essential living costs, such as your rent, mortgage, food, utilities and travel expenses.

You can speak to your lenders directly, or choose a Debt Management Plan provider who will speak to your lenders on your behalf to negotiate a new lower monthly payment. This will be affordable and sustainable for you. You or your Debt Management Plan provider can also ask your lenders to freeze interest and charges on your accounts, and although they don’t have to agree to this, if they can see that you are genuinely struggling with your finances, most of them will.

As with any debt solution, a DMP has consequences, for example, reducing your monthly repayments will affect your credit rating, which will make it harder for you to obtain credit in the short to medium term, and it could affect you in the longer term too.

Find out more about Debt Management Plans here.

Debt Consolidation Loan

If you’re struggling to manage your debt repayments and need help getting back on track with them, a Debt Consolidation Loan may help you simplify your finances.

You take out new credit to pay off your existing credit over a longer time period and it lets you combine your existing debts into one more manageable monthly repayment. You then only have to make one payment a month, rather than lots of smaller ones and it may also reduce the amount you pay each month. However, as you’ll repay your debts over a longer period, you may end up paying more overall.

A debt consolidation loan can either be unsecured or secured against your property. You need to be confident that you can meet the new monthly repayment, otherwise you could end up in further debt. This is particularly important if the loan is secured against your home, as missing repayments could result in the repossession of your property.

Find out more about Debt Consolidation Loans here.

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