Scottish Debt Advice

There are a range of Scottish Debt Solutions which you could be applicable. There are plenty of options and considerations that should be made before entering a Trust Deed Scotland, Certificate of Sequestration, LILA or Debt Arrangement Scheme.

It’s imperative to get debt help from a registered debt advisor who has experience and qualifications to provide debt advice.

Money advisors will be well versed in the pros and cons for trust deeds, DAS or bankruptcy.

Protected Trust Deed (PTD)

To qualify for a PTD you must reside in Scotland and have lived there for the last 6 months. You must be able to make one monthly payment towards your debt and your debt should be of a certain level.

By entering a trust deed the debtor is granting full control of their estates to a trust deed who will act on behalf of the creditors. Once the trust deed has become protected the creditor will be protected from any legal enforcement. However it cannot reverse any action which has taken place prior to entering. This does include any bank or earnings arrestment.

If there is a property with equity then the trust deed will ask for the equity to be released, this is usually done by remortgaging or a third party buy out.

With a protected trust deed the courts are not involved.

The debt is frozen and all interest and charges ceased once the trust deed has become protected. As long as the creditors meet all that is required from the trustee during the trust deed then at the end of the solution all remaining debt is written off.

The length of time a protected trust deed lasts depends on how much you pay towards the solution on a monthly basis.

Certificate of Sequestration (COS)

The equivalent to bankruptcy in Scotland is a Certificate of sequestration (COS).

The cost to enter is £200.00 and you will need a qualified money advisor or an insolvency practitioner to help you enter it.

If you have disposable income each month then you will be asked to contribute this towards your creditors, this is called an income payment order. If you have an income payment order then this will be assed every 6 months, if you income fluctuates so too will your payments.

The COS lasts one year though if you have an income payment order then you will have to make payments for three years.

Once the certificate is issued it is proof that the debtor is insolvent and that they can no longer afford to repay the debt, it is also proof that they have no assets to cover the costs of their debt. Once the debtor has the certificate they will have thirty days to apply for sequestration.

Only a debtor can be granted a certificate a creditor cannot.

Sequestration

This happens when a person or company takes you to court for money due; they can ask for any assets you have to be sold. They will also want to do an income and expenditure so the courts can decide if you should contribute towards the debt.

Low Income Low Assets (LILA)

To qualify for a LILA your income should be less than £235.50 a week you should have no assets worth more than a £1,000. You can have a vehicle though it should be worth less than £3,000. Your debt can be of any level and is not restricted.

Debt Arrangement Scheme (DAS)

DAS protects your property and unlike a debt management plan, it guarantees to freeze all interest and charges. You will pay back all the debt and as long as you can do this within a reasonable period of time. They look at approximately ten years as being a reasonable period of time.