DEBT SOLUTIONS
Debt Help Scotland

Do I have to pay for debt advice?,

Some organisations charge for debt help but we don’t believe anyone should have to pay when they’re struggling so our expert advice is available free of charge.

There are fees required for entering most formal debt solutions – such as administration and application fees – but these will be taken from your monthly payments.

This means we won’t charge you anything over and above your agreed monthly payments and you’ll never be asked to pay a penny more than what you owe.

Write off up to 70% of your unsecured debt – Check if you qualify

When should I get help with my finances?,

There are various debt solutions available to help you deal with your debt, but knowing when to reach out can be the trickiest part. Should you wait until you’ve defaulted on a credit agreement or after one missed payment to stop the situation from escalating?

Put simply, it’s important to get help with your finances as soon as you realise that they’re becoming a problem and affecting your day-to-day life. For example, if you rely on credit cards to pay for basic goods and services or you haven’t had a good night’s sleep in months due to worrying about debt.

Generally, your creditors (the people you owe money to) will be much more understanding and flexible if you let them know you’re struggling as soon as your circumstances change. Burying your head in the sand might sound like a good idea at the time, but the longer you ignore the problem, the bigger it will become.

We know more than anyone how difficult it can be to deal with debt and, for some, all it takes is a single missed payment for their financial situation to spiral out of control. Thankfully, we can help you find a solution.

What are my options for getting out of debt in Scotland?,

There’s always a way out of debt, and it’s important to remember that, no matter how bleak your circumstances seem, you’re not alone.

Below, we’ve outlined three of the most popular debt solutions that you may be eligible for:

Trust Deed

What is it?

A Trust Deed is a legally binding agreement between you and your creditors to repay your debt through a series of monthly payments over a set period (typically four years). Once you’ve made your final payment, your remaining debt will be written off.

Trust Deeds can only be administered by licensed Insolvency Practitioners (IPs). Their main responsibilities are dealing with your creditors, distributing your monthly payments, and looking after your financial affairs.

Once the majority of your creditors have approved your Trust Deed, it becomes a Protected Trust Deed (PTD). Under a PTD, you’ll be protected from creditor contact, legal action, and further interest and charges.

Who is it for?

Trust Deeds are only available to people who live in Scotland, have multiple creditors, have a total debt level of more than £5,000, and can afford to make monthly payments towards what they owe.

How will it help?

Trust Deeds combine all of your unsecured debt into one manageable monthly payment, based on your household income and expenditure.

During a Trust Deed, you won’t have to deal with the companies you owe money to as your IP will do it for you.

Furthermore, your creditors won’t be able to take legal action against you to recover the money owed. This includes taking you to court and repossessing your assets like your home or your car.

Debt Arrangement Scheme (DAS)

What is it?

The Debt Arrangement Scheme (DAS) was introduced by the Scottish Government as an alternative to a Trust Deed.

Under a DAS, you’ll work with an approved money adviser and enter a Debt Payment Programme (DPP) to pay back 100% of your debt over an extended period (up to 12 years). During this time, your creditors won’t be able to contact you or hassle you for payment.

There is no minimum or maximum debt level required for a DAS and all interest, charges, and fees will be frozen, allowing you to focus on making manageable monthly payments.

Who is it for?

The DAS is available to people who live in Scotland, have multiple debts, and have sufficient disposable income left over each month to make debt repayments.

How will it help?

With a DPP, the companies you owe money to won’t be able to take legal action against you and you’ll be able to keep your car and your home.

The main aim of the DAS is to help you pay back your total debt at a rate you can afford.

Once you’ve made your final payment, you can rest assured that your debt has been fully repaid and you don’t owe a penny more to your creditors.

Sequestration

Sequestration is often referred to as the Scottish equivalent of bankruptcy and is a popular route taken by people who don’t have enough disposable income to qualify for other debt solutions, such as a PTD. The Minimal Asset Process (MAP) is a way of applying for sequestration when you’re on an extremely low income and have little to no assets.

During sequestration, a licensed IP will deal with your creditors on your behalf and take control of your estate, ultimately deciding which of your assets can be sold to raise the funds needed to repay your debt.

The average sequestration lasts 12 months, during which time you won’t be required to make payments. Once this deadline has passed, your debt will be written off if your financial situation hasn’t improved.

However, if you have a small amount of disposable income left over each month, you may be asked to make payments over four years. There is also a £150 application fee required, but this can be waived if you’re on a low income or in receipt of certain benefits.

Who is it for?

Sequestration is designed for people who live in Scotland, have an overall debt level of £3,000 or more, and are struggling to make repayments due to having little to no money coming in.

How will it help?

With sequestration, your creditors won’t be able to take any legal action against you to recover your debts and you will no longer have to personally deal with them as your IP will do this for you.

Provided you cooperate fully throughout, you could be released from your unaffordable debt in as little as 12 months.

Once you’ve been discharged, you’ll be declared debt-free and will be free to make a fresh financial start.

A massive thank you

“I’d like to say a massive thank you to Carrington Dean for helping me. It feels like I have control of my life again.”

Get help like Josh did

How long before a debt is written off in Scotland?,

The length of time it takes for a debt to be written off in Scotland depends on which debt solution you’re using. Some, like a DAS, don’t include a write-off at all and require you to repay your total debt over time.

However, most debts are automatically written off after five years of inaction under something known as ‘prescription’. This is the equivalent of statute barred debt in England, Wales, and Northern Ireland, and is a way of measuring how long you’ve got before your debts become legally unrecoverable.

For example, if you haven’t made a payment towards a debt in five years and your creditors have made no attempt to communicate with you or collect payment in that time, your debt will be prescribed. This means it legally ceases to exist and you are no longer responsible for paying it.

This applies to most unsecured debts, including credit cards, personal loans, payday loans, catalogues, overdrafts, and utility arrears, but doesn’t cover mortgage shortfalls, council tax arrears, and debts owed to HMRC.

Will debt solutions affect my credit score?,

In short, yes – using a debt solution will have a negative impact on your credit score and make it difficult to access most forms of credit.

When your credit rating takes a hit, getting a loan, mortgage, bank account, or phone contract will be more challenging than it would be if you had a good credit score.

This is because a marker on your credit score indicates that you’ve struggled to make payments in full and on time in the past and could potentially do the same if you were to take out another credit agreement.

However, it’s important to note that if you’re failing to keep up with your bills and accumulating debt, your credit score will already be damaged by the missed payments and defaults. Once you’ve dealt with your debt, you can start to rebuild your credit score and get your finances back on track.

Find out if you qualify to write off up to 70% of your unsecured debt!

Get debt help

Where can I find information about my debts?,

Most people carry some form of debt, but knowing where to find more information about it can be easier said than done. Here are some of the things you should do to find out more about your debts:

Check your credit report

The easiest way to get information about your debts is to obtain a copy of your credit report from any of the main credit reference agencies in the UK (Experian, TransUnion, or Equifax).

This will show you what money you’ve borrowed in the past six years and, more importantly, how much of it has been repaid in that time.

Credit reports won’t always hold details on all of your debts, such as debts accrued in the last six weeks, council tax arrears, money owed to other people or tradespeople, unpaid income tax, and benefits overpayments, so it’s worth looking elsewhere if you think you have any of those debts.

Check your bank statements

Checking your bank statements can tell you whether you’ve recently made a payment towards a debt and how much was paid.

Most, if not all, of your debts will be paid from your bank account – whether by direct debit, standing order, or manual payment – so it can be a useful place to start your search.

This will also give you a clue as to who you made payment to, which can help you find further information about your creditors.

Check financial paperwork

If you’re in debt, chances are your creditors have tried to get in contact with you by phone, email, or letter. Finding evidence of this correspondence can help you find out more about the debt in question.

This should let you know basic information, such as your creditor name, reference number, and current balance owed, so you can decide what your next steps should be.

Even if you’ve moved since you accrued the debt, it may be worth contacting your old landlord or the new occupants of the property to ask them to forward any letters that may have arrived addressed to you.

Contact your creditor

The last thing you can do to find out more information about your debt is to contact your creditor directly, but this should only be done as a last resort.

Remember, if your debt isn’t statute barred, contacting your creditor can reset the limitation period back to the beginning again.

However, if you’re confident you haven’t acknowledged or paid the debt in over six years, your creditor won’t be able to take you to court.

What information do I need to provide to get debt help?,

Before reaching out for debt help, it can be helpful to gather as much information as you can about your financial situation.

The information you need will differ depending on where you go for debt help but most companies will ask for the following details:

• Proof of identity
• Proof of address
• Details of your income (e.g. wage slips and benefits letters)
• Details of household expenditure (e.g. bank statements, utility bills, and receipts)
• Financial paperwork (e.g. copies of credit reports, credit agreements, and letters from creditors or the court)
• Proof of debt (types of debt, how much you owe, and demands for payment)

Where can I get debt help (Scotland)?,

Whether you have a small debt or multiple large debts, reaching out for help is never easy. Talking to your loved ones about your finances can be hard enough, never mind a money advisor or debt management company.

At Carrington Dean, we understand the circumstances that lead people to debt, and as the largest debt management firm in Scotland, we go to extra lengths to ensure we treat every client with empathy and respect.

When you contact us, you’ll be listened to by one of our friendly debt advisers who will take your home life and financial situation into account and help you find a solution that everyone can agree on – whether that’s a formal debt solution or not.

For free debt advice and support from people who understand the landscape in Scotland, contact us today on 0800 043 1320.