Debt Advice In Scotland
Struggling with debt in Scotland? Discover a range of options to help you get back on track.
Bee Wise Solutions do not currently administer Scottish Debt Solutions. However, we work with third parties who can and may refer you to them where one of the below options is suitable. We may receive a fee when we refer you to one of our trusted third parties.
Trust Deed
A trust deed is a formal agreement which allows to make reduced payments to your debts, a trust deed usually lasts for 4 years and once it is completed the debts included are written off. An ordinary trust deed is not binding on your creditors until it becomes protected, a trust deed becomes protected once at least half of your creditors have agreed to the proposal.
To qualify you must:
- Have over £5000 in unsecured debts
- Be making enough each month to cover your proposed repayments
- Have an income that isn’t just benefits
- Not have been bankrupt in the last five years
Trust Deed - FAQs
How a Trust Deed becomes a Protected Trust Deed (PTD)
Only the creditors who agree to a trust deed will be bound by it, which means those who don’t agree to it could still take further action against you.
A trustee will write to all your creditors enclosing a notice of the trust deed and advising them that the trust deed is to become a Protected Trust Deed (PTD), should there not be any objections your trust deed will normally become protected – this means providing you stick to the terms of your trust deed your creditors cannot continue to pursue you and interest and charges will be frozen.
A trust deed will not become protected if at least half your creditors object to it, or creditors who between them hold at least a third of your total debt level object. Creditors who do not respond within 5 weeks are treated as if they have agreed.
Advantages of a Trust Deed
- Interest and Charges are frozen.
- Allows you to make one affordable monthly payment.
- Some assets, such as your home, may be protected.
- Creditors are no longer able to pursue the debts or enforce legal action.
Disadvantages of a Trust Deed
- There are fees payable for the work involved in setting up and managing your Trust Deed, however, these are included within your monthly payments.
- Your credit rating will be affected for 6 years.
- Your details are recorded on the insolvency register, which is a public record.
- If you have significant assets such as a vehicle worth more than £3000, you may be asked to sell this to repay your creditors. If you’re a homeowner, you may be asked to release equity from your property.
Trust Deed - FAQs
Protected vs Unprotected
Elevate the power of your Trust Deed! Discover how it can become ‘Protected’ and ensure that all your creditors are legally bound to its terms, irrespective of their agreement. On the flip side, understand the implications of an ‘Unprotected’ Trust Deed when the majority of creditors don’t back the terms, leaving them free to contact you directly for debt recovery.
Advantages of a Trust Deed
- Interest and Charges are frozen.
- Allows you to make one affordable monthly payment.
- Some assets, such as your home, may be protected.
- Creditors are no longer able to pursue the debts or enforce legal action.
Disadvantages of a Trust Deed
- There are fees payable for the work involved in setting up and managing your IVA, however, these are included within your monthly payments.
- Your credit rating will be affected for 6 years.
- Your details are recorded on the insolvency register, which is a public record.
- If you have significant assets such as a vehicle worth more than £3000, you may be asked to sell this to repay your creditors. If you’re a homeowner, you may be asked to release equity from your property.
Debt Arrangement Scheme (DAS)
A DAS allows you to repay your debts by making affordable monthly repayments. A DAS can protect you from creditors taking legal action in the future in what is known as a Debt Payment Programme (DPP). Your creditors will have 21 days to object to the proposed DAS and if no objections are raised the DPP will go ahead..
Debt Arrangement Scheme (DAS) - FAQs
Advantages of DAS
- Your creditors can no longer pursue the debts or add further interest and charges.
- Your assets are usually not at risk of being sold.
- In some circumstances, if a creditor rejects the administrator may be able to force them to agree.
- You will only make one affordable monthly repayment.
Disadvantages of DAS
- Your credit rating will be affected which may impact your ability to obtain future credit.
- Your creditors could reject the arrangement.
- Reducing your payments may mean it takes longer to become debt free.
- Failure to comply with the DAS means it could be revoked.
Debt Arrangement Scheme (DAS) - FAQs
Advantages of DAS
- Your creditors can no longer pursue the debts or add further interest and charges.
- Your assets are usually not at risk of being sold.
- In some circumstances, if a creditor rejects the administrator may be able to force them to agree.
- You will only make one affordable monthly repayment.
Disadvantages of DAS
- Your credit rating will be affected which may impact your ability to obtain future credit.
- Your creditors could reject the arrangement.
- Reducing your payments may mean it takes longer to become debt free.
- Failure to comply with the DAS means it could be revoked.
Low and Grow Scheme
Introducing the Low and Grow Debt Arrangement Scheme: A Lifeline for Financial Hardships During the Pandemic.
In response to the ongoing Covid-19 crisis, the Scottish government has launched the Low and Grow Debt Arrangement Scheme in 2021. This innovative program is designed to provide temporary relief for individuals facing short-term financial difficulties.
With the scheme, an official money advisor will step in on your behalf, working with your creditors to negotiate reduced payment terms for a period of 3 months. At the end of this initial period, your financial situation will be reevaluated to determine if an extension is necessary.
It’s important to note that this scheme is intended as a short-term solution, offering assistance for up to 6 months. Find relief from financial burdens and regain control of your life with the Low and Grow Debt Arrangement Scheme.
Sequestration
Sequestration is the Scottish equivalent to Bankruptcy. You must meet certain criteria to enter into sequestrations and these are:
- Your total debts must be at least £3,000.
- You must not have been made bankrupt under other rules in the past five years.
- You must either be apparently insolvent or have a certificate for sequestration.
Sequestration - FAQs
Advantages of Sequestration
- You are legally protected meaning creditors can no longer pursue you.
- Interest and Charges are frozen.
- Debts are typically written off after 12-months.
Disadvantages of Sequestration
- Assets of value may be repossessed (including your home – if homeowner).
- There is an application fee of £150.
- Your details will be listed on the insolvency register which is a public record.
- Will have a negative impact on your credit profile for 6 years.
Sequestration - FAQs
Advantages of Sequestration
- You are legally protected meaning creditors can no longer pursue you.
- nterest and Charges are frozen.
- Debts are typically written off after 12-months.
Disadvantages of Sequestration
- Assets of value may be repossessed (including your home – if homeowner).
- There is an application fee of £150.
- Your details will be listed on the insolvency register which is a public record.
- Will have a negative impact on your credit profile for 6 years.
Minimal Asset Process Bankruptcy (MAP)
MAP is the name given to a special type of bankruptcy in Scotland. To qualify for this option, you need to have a low level of debt and very few assets.
In order to go bankrupt using the MAP process, you have to meet the following criteria.
- Your total debts are no more than £25,000.
- Your total assets are worth no more than £2,000.
- You don’t have any individual assets that are worth more than £1,000. (A car that you reasonably need will not be counted as long as it is not worth more than £3,000).
- You don’t own any land or buildings.
- You have a valid certificate for sequestration. This is a formal document confirming that you cannot pay your debts as they fall due.
- A money adviser must assess your income and expenditure using the Common Financial Tool. This must show that you have no money available after your essential bills to pay to your creditors. If your income is made up of only benefits, and you have received them for at least six months before your application, you automatically meet this condition.
- You have not been made bankrupt under the minimal asset process rules in the last ten years.
- You have not been made bankrupt under other rules in the past five years.
Minimal Asset Process Bankruptcy - FAQs
Advantages of MAP
- Creditors cannot contact you during the 6-months process.
- You do not need to appear in court.
- You will not need to make any monthly payments.
- Debts may be written off after the 6-month period and creditors are no longer able to pursue the debts.
Disadvantages of MAP
- Your credit rating will be negatively affected.
- You must meet the qualifying criteria above to enter this solution.
- You will be subject to some restrictions during the first 12 months after the MAP; For example, you cannot apply for credit above £2000 without telling the lender you’re bankrupt.
Minimal Asset Process Bankruptcy - FAQs
Advantages of MAP
- Creditors cannot contact you during the 6-months process.
- You do not need to appear in court.
- You will not need to make any monthly payments.
- Debts may be written off after the 6-month period and creditors are no longer able to pursue the debts.
Disadvantages of MAP
- Your credit rating will be negatively affected.
- You must meet the qualifying criteria above to enter this solution.
- You will be subject to some restrictions during the first 12 months after the MAP; For example, you cannot apply for credit above £2000 without telling the lender you’re bankrupt.
Debt Moratorium
Attention Scotland Residents: Relieve Debt Pressure with Our Extended Debt Moratorium!
Introducing our revamped Debt Moratorium scheme, the ultimate solution to alleviate your creditor stress. Similar to the game-changing Breathing Space initiative, our scheme allows you to breathe easy and regain control over your finances.
In response to the challenges posed by the Covid-19 pandemic, we have extended the duration of our scheme from 6 weeks to a whopping 6 months, providing crucial support during these uncertain times. And guess what? This change is here to stay!
Take advantage of this incredible opportunity and reclaim your financial freedom today. Don’t let debt hold you back any longer—sign up for our enhanced Debt Moratorium scheme now.
How Can I apply for Debt Moratorium?
Attention Scottish Residents: Take control of your debt by applying for a Debt Moratorium. This powerful solution halts creditor action while you explore options like a Trust Deed or Debt Arrangement Scheme.
While you can apply for a Debt Moratorium on your own through the Accountant in Bankruptcy, seeking professional debt help is highly recommended. A Debt Advisor can apply on your behalf, ensuring you’re informed about all available solutions to consider in the meantime.