What is debt help and what kinds of debt help are available?

What is debt help?

When you have debts that become problem debts, or debts that you’re finding difficult to repay and are taking their toll on you financially, and likely giving you mental stress as well, it’s possible that you’ll need help with your debts.

But what is debt help, and how do you find it? What can it do for you?

Debt help, otherwise known as debt relief or debt solutions, is an umbrella term for a variety of different ways of helping to make your debts manageable and is usually something that you’ll get from a company or organization that provides debt advice.

So, what are the different solutions and how can they help, and, in addition to their benefits, are there any disadvantages to them?

Scottish Trust Deed

Trust Deeds are specifically designed for people who need help with their debts as they’ve been struggling, or unable to, meet their monthly payments.

A Trust Deed is a type of insolvency that’s voluntary. However, it’s still a formal agreement taking place between you and your creditors. It’s essentially an agreement between you and your creditors whereby you are saying you are unable to pay them all of the money that you owe them but you will pay them something.

You can appoint an Insolvency Practitioner, who’ll be known as the ‘Trustee’. They’ll reach an agreement with your creditors for you to only pay back what you can afford, and be responsible for overseeing the agreement for its duration and payments to your creditors, taking a lot of the hassle away from you, but also the stress!

Trust Deeds involve a level of debt forgiveness, which means that, if agreed, your creditors will write off some of what you owe them.

Once your Scottish Trust Deed is ‘protected’, it’s a legally binding way for you to get back to financial stability and, if you qualify, can help you to write off unaffordable debt. A Trust Deed will also, usually, enable you to pay back what’s affordable for a period of 48 months (four years).

To apply for a Trust Deed, you need to live in Scotland, have debts over £5,000 and have a provable form of income.

Trust Deeds, like any other form of debt help, have both advantages and disadvantages.

You can:

  • Stop contact from your creditors.
  • Return to financial stability within four years.
  • Only pay what’s affordable.
  • Negotiate to keep your house, if you own it.
  • Carry on trading if you’re self-employed.


  • It will affect your credit rating.
  • You may need to sell or remortgage your home, depending on the situation and the level of your debts and any equity that exists in your home; but for the main part your property will be perfectly safe.
  • Only unsecured debts are covered.
  • You cannot be a Director of a Limited Company while the Trust Deed is in operation.
  • You cannot obtain credit.


Bankruptcy, or sequestration as its known in Scotland, is similar to a Trust Deed in some ways, but there are differences.

Sequestration is a legal declaration that you can’t pay your debts and allows you to obtain debt relief. If you’re having difficulties making repayments on your debts, then bankruptcy could be a good option for you.

The main downside, however, is that you’ll lose control of any assets that you have. So, if you own your home, control of it will be passed to your Trustee. Your Trustee may then seek to sell it and use any equity that’s in the property to provide some return to your creditors.

When you apply to make yourself bankrupt the application will go to the Accountant in Bankruptcy (AiB), who’ll make the final decision on whether you can be made bankrupt – if they think there’s another option that’s more suitable for you then they’ll reject your application.

If it’s accepted, you’ll be appointed a Trustee who’ll deal with your creditors. If you can afford to make any repayments to your creditors, then there may be monthly repayments involved; the final decision on the level of your payments rests with the AiB. Creditors can also petition for your bankruptcy.

Sequestration will usually take a year, after which you’ll be discharged from the restrictions imposed by that solution. However, it can last up to four years if you can afford to make any payments.

Sequestration can allow you to:

  • Write off debts
  • Get protection from your creditors.
  • Be discharged from the restrictions of Bankruptcy after a year.

However (restrictions below):

  • It will affect your credit rating.
  • Your assets are likely to be sold.
  • Depending on your career, your job may be affected.
  • You can’t be Director of a company.

Debt Arrangement Scheme

A Debt Arrangement Scheme (DAS) is a Scottish statutory scheme that enables you to repay all your debts at an affordable rate, without incurring further charges or interest.

A Debt Arrangement Scheme can be the best option for you if you’re in a position to afford larger repayments on your debt and a DAS will likely clear your debt more quickly than a Trust Deed would.

The benefits of a Debt Arrangement Scheme include:

  • Reduced creditor contact and inability to enforce legal action (upon approval).
  • Payments based on what’s affordable.
  • Interest and charges will be frozen.


  • Your credit rating will be affected.
  • You’ll be put onto a public DAS register.
  • There is no debt write off, you’ll repay all that you owe.

Minimal Asset Process

Minimal Asset Process (MAP) is a form of bankruptcy that’s intended for people who have no disposable income after meeting their essential living costs. Entering into a MAP allows you to write off all unsecured debts after a year.

To apply, you can’t own your own home, have debts above £17,000 (this has been raised to £25,000 as a result of coronavirus), have a car worth more than £3,000, the total value of your other assets can’t be more than £2,000 and you must have no single asset worth more than £1,000. You also need to live in Scotland.

The benefits of a Minimal Asset process include:

  • You don’t need to appear in court.
  • Your creditors have to cease all contact.
  • Your appointed Trustee will be an agent appointed by the AIB.


  • It will affect your credit rating.
  • It can affect your career, depending what your job is.
  • There’s a chance that your bank account will be frozen, and you’ll have to open a basic current account elsewhere.

When should you look for debt help and how do you get it?

The most important thing to do if you’re facing debt problems, is to look for help and speak to someone in the know.

This can be a difficult step to take, but it’s important to know that help is available and it can enable you to get your finances back on track in a relatively short period of time (compared to the financial and mental struggle that you may be facing without getting help and advice).

As a general rule, if your debt is at a level that leaves you struggling to make your payments, then your debt is at ‘problem debt’ level and you should seek help. If you’re in a position where you’re missing repayments on your debts, then you should definitely get debt advice.

Once you’ve decided that you need debt help, and taken the leap and decided to get it, then there are plenty of options available. Most organisations will provided free debt advice, so make sure you speak to a company who’ll advise you for free.

If you’re in problem debt and your finances are causing you issues, then fill out our quick, online form to see if you qualify for debt help, and we’ll call you back at a time that’s convenient to you, with free, confidential and no-obligation advice.

Finally, if you’re reading this and are in problem debt, we implore you to do something about it. Whether you call us, or anybody else who can help, make that call. This guide, although informative, is no replacement for the individually tailored, one-to-one debt help that you can get when you make a call and speak to someone who can help you with your situation and base their advice to you on your personal circumstances.

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