Choosing a debt solution

Choosing a debt solution can be overwhelming. You just want to get out of debt and all of a sudden you find there are many options and many terms you need to know.

Don’t worry, we can help you. We’ve put together this short guide on how to choose the right solution for you.

We’ve also got a Freephone number offering FREE debt advice, so if you are confused and just need to chat, we can help you find your feet.

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Know your options

One of the first steps to finding the right debt solution for you is to know your options.

The main debt solutions available to residents of Scotland are as follows:

Protected Trust Deed

A Protected Trust Deed is an agreement between you and your unsecured creditors whereby you pay back one monthly payment for an agreed time period, and after the agreed time (usually 4 years), the rest of your debt will be written off.

During this time, no additional interest & charges can be added to your debts, and your creditors cannot take any further legal action against you.

The amount you pay each month will be an affordable amount, worked out after a complete assessment of your finances. Whilst this is a debt solution, it’s intended to help you out by ensuring you still have enough money left over each month to pay all your essential living expenses and live your life. 


This is the Scottish equivalent of bankruptcy. If you have unsecured debts over £3000, and can no longer make your debt repayments, sequestration could be an option to consider.

This solution also involves debt write-off, but it usually involves the sale of all your significant assets – that may or may not include your home. Sequestration could be completed after a year, but it could also involve monthly payments for 4 years if you can afford them.

Minimal Asset Process (MAP)

This is a route into sequestration for people on low income or benefits. The fee to apply for MAP is £90 (instead of £200 for sequestration) and you could be debt-free in as little as 6 months.

Debt Arrangement Scheme (DAS)

This is a government-run debt management scheme that allows you to repay your debts through a Debt Payment Programme (DPP).

You will pay the full amount of your debts off over time, but there is a greater degree of flexibility than with some other debt solutions.

You pay what you can afford for as long as needed to repay all your unsecured debts in full – and while doing so, interest & charges are frozen, and you are protected from any further legal action by your unsecured creditors. Your assets are also protected during a DAS.

Debt Management Plan (DMP)

A DMP is similar to DAS in that you have some flexibility. You make reduced payments to your creditors for as long as necessary to repay all your debts in full.

However, with a DMP, there is no guarantee that interest & charges will be frozen, and your unsecured creditors could still take further legal action if they wish.

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Questions to ask

Reading lots of information about how each debt solution works may be helpful for some people – but for others it might be overwhelming.

If you are struggling with a mountain of information and want answers fast – ask your debt adviser these questions:

What debt solution am I eligible for?

Some debt solutions have entry criteria, and it’s best to discover first what you could actually qualify for.

Are the debt solutions permanent or temporary?

If you are moving home – or changing your job – a legally-binding inflexible debt solution might not be a good idea. Ask about the time each debt solution lasts.

How important is the impact on your home or job?

With sequestration, you could be forced to sell your home – and it could also affect your job, depending on which industry you work in.

This might be something to consider when looking at what debt solutions are available to you.

How does it affect my credit rating?

Most debt solutions will have an adverse effect on your credit rating – but if you’re missing payments already (or making late payments), the odds are that your credit rating isn’t exactly perfect anyway.

Is there a fee, and can I afford to pay it?

Some debt solutions like bankruptcy require an upfront fee. If you are struggling to make ends meet now, you may not be able to afford the application fee.

This is something else you can use to narrow down the debt solution options that could be available to you.

Finding the best fit for you

When you call PayPlan, we will always get to know you and ask you about your circumstances. We want to help you get out of debt, so there is no point in pushing you in the direction of a debt solution that you are not going to be able to stick to.

We want to help you find your feet – and get your life back on track – so we will always consider every option available.

We will talk to you about the pros and cons of each option, and make our recommendation.

We can also help you with your application for your chosen debt solution, and (where applicable) refer you to associated specialist companies who can guide you through the whole process.

We always commit to finding the best solution for you, but we won’t force anything on you. We are great listeners – and if you decide you want to go down a certain route, we will certainly help you.

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