Debt Management

Debt Management Scotland

Mounting debts often bring in an avalanche of problems and with little or no means to pay up the debts, the cascading effect due to addition of interest and other charges at regular intervals can only add to your woes. Multiple options are available for debt management Scotland. However, it is essential that you consider each of these options carefully and align with the option that best suits your individual circumstances.  A brief overview of these solutions is:-


LILA is the equivalent of DRO in the rest of the United Kingdom and is tailored to suit residents who have low assets as well as low income. This option is effective from April 2008 for residents of Scotland. To benefit from this scheme your assets should be under £10,000 and any single asset should not be valued over £1,000. This scheme is often the last resort to debtors before applying for a bankruptcy.

PTD (Protected Trust Deeds)

Under this scheme, all your unsecured debts are clubbed together and a trustee distributes your monthly payments among the creditors. Creditors must signify their acceptance of the scheme but they are not under compulsion to do so. By opting for this solution creditors cannot charge further interest and costs and the debt remaining at the end of a 3 year period is written off. Where creditors object to the solution such creditors shall not exceed one third of all creditors and any single debt cannot exceed £10,000. When you opt for this scheme, your credit score will be compromised for 6 years. Failure to make regular payments under the PTD can create more problems including bankruptcy. Your credit score will be compromised and obtaining further credit can be challenging.
DAS (Debt Arrangement Scheme)

DAS or debt arrangement scheme works more like the PTD except that the repayment period is longer making the monthly payments smaller. However, your payout over the extended period will be cumulatively more expensive. You must have more than one debt and be a resident of Scotland.

DMP (Debt Management Plan)

Under the debt management plan, you make a single payment that is distributed among the creditors mostly, on an equitable basis. To facilitate this, creditors are requested to waive part of the principal, interest and costs. The creditors are not under obligation to accept the request though an approved money advisor often negotiates successfully with the creditors. Punctuality in making regular monthly payments under the plan is paramount to get relief through this option.


A bankruptcy in the rest of UK is termed as Sequestration in Scotland.  A debtor is declared bankrupt by a Court and your assets or property is turned over to a trustee. The trustee sells the assets and the proceeds are paid to the creditors on an equitable basis. Regular wage earners will also be required to set aside a part of that towards sequestration.

Identifying a certified debt expert is the best way to ensure that you choose the best option available to you get the debt relief that is available to you.