Can insolvency offer a fresh financial start?


Can insolvency offer a fresh financial start?


Scottish bankruptcies have increased by 5%, new figures have revealed.

According to the Account in Bankruptcy (AiB) there were 4,862 awards of bankruptcy in 2018-19 compared to 4,644 in 2017-18. Statistics from the AiB also show protected trust deed (PTD) numbers continue to fuel the increase in total personal insolvencies, which include both bankruptcies and PTDs in Scotland by 20.5%.

Protected trust deed numbers increased from 5,958 in 2017-18 to 7,917 in 2018-19 while Debt Arrangement Scheme numbers increased by 9.7%.

Speaking of the figures, Minister for Business, Fair Work and Skills Jamie Hepburn said: “These figures highlight the challenging economic times we are facing with more Scots experiencing increased financial pressures.

“The ongoing uncertainty around EU exit, alongside the challenges of the roll out of Universal Credit, bear much of the blame.”

Thousands of Scots find themselves struggling with debt

As thousands of Scots across the country find themselves living in debt, Carrington Dean is shining a light on the importance of finding support to regain control and making a fresh financial start.

Accepting you’re struggling financially is often easier said than done for many, however, admitting that you have a problem is the first step to making a difference.

When faced with soaring bills, interest rates and late payment charges it can be all too easy to think you’re the only person living with debt problems but it’s important to remember you aren’t alone. Debt doesn’t discriminate and there’s no one size fits all profile for those living in financial hardship.

The reality is, thousands of people are going through the same thing as you whether that’s lying awake at night or feeling isolated from the people that matter most.

Debt doesn’t take a day off, which is why it’s imperative to tackle the problem head on with expert debt help.

If you’re struggling to manage payments of day-to-day bills or keep up with loan repayments, there are a number of options open to help clear your debt.

There is often a misconception that seeking debt help can have a negative impact on your credit score. However, the longer you continue to miss payments on what you owe the bigger the impact will be on your credit score – making it almost impossible to be accepted for further credit in the future.

By entering into a debt relief solution, you take control of your financial future by repaying what you can afford to the debts you owe. When seeking a debt solution it’s important to seek impartial advice to ensure you enter an arrangement that best suits your needs, however, in Scotland you could make the most of the formal solutions below:

Trust Deed

A trust deed is an agreement between you and those you owe money to which allows you to make monthly repayments towards your unsecured debts. Trust deeds typically last for a period of four to five years and once that period is over, any remaining debt is written off.

A trust deed is a popular option for those living in Scotland unable to repay unsecured debts of £5,000 or more.

Debt Arrangement Scheme

Those looking for an alternative to a trust deed might consider a debt arrangement scheme (DAS) which allows you to freeze the interest on your debts and repay over a period to suit you. Entering a DAS will also prevent creditors from taking legal action against you and stop any further direct contact with those you owe money to.

This solution offers breathing space to allow you to focus on repaying your debts in full without the added stress of being contacted by creditors or worrying about losing your home.

Minimal Asset Process

For those in search of an alternative to sequestration the minimal asset process (MAP) could be an option. To be eligible for a MAP you must have been in receipt of income related benefits for at least six months, not own an asset worth more than £1,000 (with the exception of a vehicle which cannot exceed the value of £3,000) or be confirmed by the Common Financial Tool as having no disposable income.

Debts must exceed £1,500 but be less than £17,000 and open to Scottish residents.


A Scottish form of bankruptcy, Sequestration is a formal insolvency process where a Trustee will take control of your estate and deal with your creditors on your behalf. You will be discharged from sequestration after a year, however, if you can afford to do so you will have to make monthly payments based on your surplus income for four years.

Your assets, including your home if there is equity, may be sold to repay your debts.

Regardless of which debt relief solution you opt for, it’s important to be aware that there will be a negative effect on your credit score. However, once the agreement term is over, you can slowly begin to rebuild your credit score.

In our next blog, we’ll showcase the ways you can rebuild your credit score following insolvency.

If you are struggling with debts, even old debts and want to speak to a specialist adviser, call a Carrington Dean adviser for free on 0808 2085 195.

You could write off up to 75% of unsecured debt with our debt assistant.

Check if you Qualify

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