The Debt Arrangement Scheme isn’t the only Scottish debt solution available and which is best for you will depend on your own circumstances. The other main options available are the Scottish Trust Deed, the LILA and Sequestration. A qualified money adviser will be able to tell you which option is the best for you and how you much you will have to pay each month moving forward.
The Scottish Trust Deed is a form of insolvency which allows you to repay your debt at an affordable monthly amount and will also result in a proportion of the debt being written off. A typical trust deed lasts from 36 to 48 months and at the end of this period all remaining debts are written off. The trust deed may affect your credit rating for up to 6 years and you will not be able to obtain more credit while in the trust deed.
Bankruptcy in Scotland, otherwise known as ‘Sequestration’ means you declaring you are unable to pay back your debts in full and it will stop your creditors from taking legal action against you. Sequestration will allow you to contribute an amount you can afford each month to your creditors and mean you are usually debt free in one to three years. As with entering any debt solution your credit rating may be affected but if you have already maxed out your credit and are struggling then chances are your credit rating is already poor.
MAP is a route into bankruptcy for those with low monthly income and a low value of assets. If you are eligible you will be able to write off all unaffordable unsecured debts. MAP will stop all contact or hassle from creditors and, depending on your monthly disposable income, you will usually be debt free within one year.
Before entering into any solution make sure you discuss the options with a money adviser.