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There are four common debt solutions available to people living in Scotland. The best way to find out which solution (if any) is right for you is to speak to a qualified money adviser, who should explain the different options to you – both their pros and cons.

Here is brief overview of the main debt solutions in Scotland:

A Protected Trust Deed involves a debtor making four years of affordable monthly payments. These are paid to an insolvency practitioner, whose fee comes from these payments and who distributes the payments to the creditors on your behalf. With this option you only pay what you can afford, though some equity may have to be released from your home, and after four years your debts are relieved.

The Debt Arrangement Scheme is a Scottish government backed debt solution which allows those struggling with debt to reduce their monthly payments and freezes interest and charges. The DAS is administered by a money adviser meaning you will only have to contribute 1 monthly payment. The Debt Arrangement Scheme will not affect your home or any assets you own as you will be paying back the full amount of the debt.

Scottish bankruptcy otherwise known as ‘Sequestration’ means control of your assets is passed to your Trustee. In practice, Bankruptcy is for those who are unable to afford a Trust Deed, but can make affordable contributions each month which will be distributed by your Trustee to your creditors.

The LILA (Low Income Low Assets), as the name suggests, is a route into bankruptcy for low earners who have no valuable assets to declare. The LILA can be administered by the Scottish AIB and will require a 1 time fee of £200.

If you are a home owner and over 55, another option to be debt free is an equity release/lifetime mortgage loan on your property.

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