Scottish Debt Solutions 2026/27: DAS, Trust Deeds, MAP, and Sequestration

Quick Summary

• Scotland has its own debt laws — completely separate from England, offering four formal debt solutions unavailable anywhere else in the UK
• Debt Arrangement Scheme (DAS) — Scotland's statutory repayment plan; freezes interest and charges, protects you from court action, no upfront cost
• Minimal Asset Process (MAP) — the £50 bankruptcy alternative for people with debts under £25,000, very low income, and few assets
• Free advice is widely available — Citizens Advice Scotland, Money Advice Scotland, and StepChange all offer free, confidential support

If you're in problem debt and you live in Scotland, you have options that don't exist in England. Scotland's debt system is entirely separate from the rest of the UK, with four statutory solutions designed to protect debtors while ensuring creditors are treated fairly. The choice depends on your debt level, your income, and what assets you own.

Quick Answer: Scotland has four formal debt solutions: the Debt Arrangement Scheme (DAS — Scotland's statutory repayment plan with no upfront cost), Trust Deeds (a four-year agreement where remaining debt is written off), Sequestration (full bankruptcy), and Minimal Asset Process (MAP — a £50 low-cost bankruptcy for debts under £25,000). All freeze interest and charges and protect you from court action. Free advice is available from Citizens Advice Scotland (0800 028 1456) and StepChange Scotland. Check the Scottish Benefits Checker to make sure you're claiming everything you're entitled to alongside any debt solution.

Why Scottish debt solutions are different

Scotland's legal system is separate from England's. Insolvency and diligence (debt enforcement) are devolved to the Scottish Government, administered by Accountant in Bankruptcy (AiB) — Scotland's equivalent of the Insolvency Service. This means:

• Different debt solutions — DAS and MAP have no English equivalent
• Different debt enforcement — arrestment of earnings, bank arrestment, and attachment instead of English-style warrants and bailiffs
• Different time limits — 5-year prescription rule (vs 6 years in England)
• Different bankruptcy process — sequestration, not "bankruptcy order"

The moment you move to Scotland, or an English person moves north, the rules change. If you're in debt and about to move, take advice before the move — it may significantly affect your options.

The four Scottish debt solutions at a glance

Plus the informal option: Debt Management Plan (DMP) — a non-statutory repayment plan run by a debt charity like StepChange. DMPs don't freeze interest by law (but many creditors will freeze voluntarily), have no legal protection, and aren't specific to Scotland.

Debt Arrangement Scheme (DAS)

The Debt Arrangement Scheme (DAS) is Scotland's flagship statutory debt solution. It's a formal repayment plan — called a Debt Payment Programme (DPP) — where you repay what you can afford to creditors over an extended period.

What DAS does

• Freezes interest, fees, and charges on all debts included
• Stops creditors taking court action against you
• Combines all your debts into one monthly payment
• Lasts as long as needed to repay the debts in full (commonly 5–10 years, sometimes longer)
• Recorded on the DAS Register (public) until the plan completes

Who qualifies

• You must be resident in Scotland
• You must have at least one Scottish debt you can't pay in full
• You must have disposable income to make regular payments (however small)
• You need a money adviser — a DAS-approved adviser sets up the plan on your behalf (most Citizens Advice Bureaux, StepChange, and local welfare rights services provide this free)

Worked example

Sarah in Dundee has £22,000 of debt across three credit cards and a personal loan. Her minimum monthly payments are £520, but after essentials she has only £320/month disposable.

With DAS:

• Monthly payment: £320 (what she can afford)
• Interest and charges: frozen (saving ~£2,800/year)
• Repayment period: approximately 5 years 9 months
• Protection: creditors cannot pursue her while the DPP is active

Without DAS, Sarah would have faced either default, court action, or a trust deed costing significantly more.

Pros and cons of DAS

Pros:

• No upfront cost
• You keep your assets (including your home)
• Interest and charges frozen
• Legal protection from creditors
• You repay in full — no debt is written off

Cons:

• Can take many years to complete
• Recorded on DAS Register (public)
• Impacts credit file for duration + 6 years after
• Difficulty getting new credit during the plan
• If your income drops significantly, you may need to exit or revise the plan

DAS is best for people with manageable debt levels who want to repay in full and avoid the stigma or complications of bankruptcy.

Trust Deeds

A Trust Deed is a voluntary agreement between you and your creditors, signed through an insolvency practitioner (IP). You hand over control of your assets and agree to pay a monthly contribution for a set period (usually 4 years). At the end, remaining unsecured debt is written off.

How it works

1. You meet with an insolvency practitioner (most offer free initial consultations)
2. The IP drafts a proposal setting out your income, expenses, assets, and what you can pay
3. The proposal is sent to creditors — they have 5 weeks to object
4. If creditors holding less than 1/3 of your debt object, it becomes "protected" and all creditors are bound
5. You make monthly contributions for 48 months (sometimes 60)
6. At the end, remaining debt is written off

Who qualifies

• Debts of at least £5,000 (practical threshold, not statutory)
• Scottish resident for at least 6 months
• Disposable income after essential expenses
• No recent bankruptcy (within 5 years)
• You must be insolvent — unable to pay debts as they fall due

Pros and cons of Trust Deeds

Pros:

• Remaining unsecured debt written off after 48 months
• Legal protection from creditors once protected
• Interest and charges frozen
• No upfront cash cost (IP fees come from the arrangement)

Cons:

• Must be insolvent to qualify
• IP fees are taken from your payments before creditors see anything (average 25-40% of total payments)
• Your home may need to be released or a payment made to protect equity
• Recorded on AiB's Register of Insolvencies (public) for 5 years
• 6 years on credit file
• Employment restrictions for some jobs (financial services, legal, etc.)
• Failure to comply can lead to extension, or in extreme cases, sequestration

Trust deeds suit people with higher debts who want a fixed end date and are willing to accept a formal insolvency.

Sequestration (Scottish bankruptcy)

Sequestration is the Scottish legal term for personal bankruptcy. It's a formal court-based process that ends your liability for most unsecured debts in exchange for handing control of your finances to a trustee.

Two routes to sequestration

1. Debtor application (self-applied) — you apply via AiB for £150
2. Creditor petition — a creditor you owe more than £5,000 applies to make you bankrupt (rare for individuals but common for sole traders)

How it works

1. Apply through AiB with a money adviser's help
2. AiB appoints a trustee (usually an insolvency practitioner)
3. The trustee takes control of your assets and income
4. Most unsecured debts are discharged after 12 months
5. You continue paying a monthly contribution (Debtor Contribution Order, or DCO) for 48 months
6. Your home may be sold if there's equity above the trustee's threshold

Who qualifies

• Debts of at least £3,000 (£1,500 for Minimal Asset Process)
• Scottish resident for at least 6 months
• Unable to pay debts as they fall due

Costs

• £150 application fee (waived in limited cases)
• Trustee fees (paid from the estate, not by you directly)

Pros and cons of sequestration

Pros:

• Discharged from most unsecured debts after 12 months
• Legal protection — creditors cannot pursue you
• Can include debts of any size
• Final end point for problem debt

Cons:

• Your home may be sold if you have significant equity
• 48 months of monthly contributions
• 6 years on credit file
• 5 years on AiB's public register
• Employment restrictions (financial services, directorships, etc.)
• Cannot obtain credit over £2,000 without disclosure for duration of sequestration
• Significant social stigma, though less severe than historically

Minimal Asset Process (MAP)

MAP is Scotland's unique low-cost bankruptcy option — a simplified version of sequestration for people who genuinely have nothing. It doesn't exist anywhere else in the UK and is one of the most protective debt solutions available anywhere.

Who qualifies for MAP

You must meet all of these criteria:

• Total debts: £1,500 to £25,000
• Weekly income: no disposable income after essentials
• Total assets: no individual asset worth more than £1,000
• Total value of all assets: less than £2,000
• No vehicle worth more than £3,000
• You do not own your home (or have no equity in it)
• You have not had a sequestration in the last 10 years
• You have had professional money advice

The "no disposable income" test is strict — it's based on the Common Financial Tool, a standardised assessment of reasonable living costs.

How MAP works

1. Get free money advice (Citizens Advice Scotland, money advice service, etc.)
2. Application fee: £50 (non-refundable)
3. AiB makes you bankrupt through the MAP route
4. Discharged from most debts after 6 months
5. No ongoing monthly contributions (because you have nothing to contribute)

Why MAP is unique

In England, low-income bankruptcy costs £680 as a minimum (£14 court fee + £680 deposit), putting it out of reach for many who need it most. Scotland's MAP costs £50 and can be discharged in 6 months. It's the most accessible formal debt solution in the UK.

MAP vs full sequestration: which to choose?

Use MAP if you qualify — it's cheaper (£50 vs £150), faster (6 months vs 12 months to discharge), and has no 48-month contribution period.

Use full sequestration if:

• Debts over £25,000
• You have some disposable income
• You own assets (even modest ones)
• You don't meet all MAP criteria

Scotland's 5-year prescription rule

Scotland has a special rule not found in English law. Under the Prescription and Limitation (Scotland) Act 1973, most unsecured debts become legally unenforceable after 5 years of no acknowledgement, payment, or contact. In England, the equivalent period is 6 years.

How prescription works

For a debt to become prescribed ("extinguished"):

1. 5 years must pass from when the debt became due
2. You must not have acknowledged the debt (writing, email, phone call admitting it)
3. You must not have made a payment (not even £1)
4. The creditor must not have taken formal court action (a court order resets the clock)

After 5 years, if none of these have happened, the debt is extinguished by law. The creditor cannot legally enforce it, and you're not required to pay.

Important cautions

• Get advice before relying on prescription. The rules are more complex than the summary here. Different debt types (credit card, loan, mortgage shortfall, council tax) are treated differently.
• Don't engage with creditors if you think a debt may be prescribed. Acknowledging the debt resets the clock.
• Some debts don't prescribe — council tax, tax debts, child maintenance, and court fines have different rules.
• Statute-barred ≠ gone from your credit file. Prescription stops enforcement, but the debt may still appear on your credit file for the standard 6-year period.

Free debt advice in Scotland

You should never pay for debt advice in Scotland. Free, confidential, high-quality advice is available from:

Citizens Advice Scotland

• Phone: 0800 028 1456
• Website: cas.org.uk
• Local bureaux in every area
• Free drop-in and appointment services
• Accredited DAS money advisers

StepChange Scotland

• Phone: 0800 138 1111
• Website: stepchange.org/scotland
• Scotland-specific advisers who understand DAS, Trust Deeds, and MAP
• Free debt management plans
• 24/7 online support

Money Advice Scotland

• Website: moneyadvicescotland.org.uk
• Umbrella body for Scottish debt advisers
• Postcode search for local free advice

National Debtline

• Phone: 0808 808 4000
• UK-wide but with Scottish advisers who know Scottish debt law

Scotland vs England: debt solutions compared

On the whole, Scotland's debt system is more protective of debtors than England's. The combination of MAP (£50 bankruptcy for low-income debtors), DAS (free repayment plan), and the 5-year prescription rule gives Scottish residents meaningfully better options.

What happens to your home?

This is the biggest concern for most people considering a debt solution. Each solution handles property differently:

• DAS: You keep your home. Your monthly payment is assessed on disposable income after essentials including the mortgage.
• Trust Deed: You may keep your home if there's no meaningful equity, or if you can pay an equivalent amount to the trustee. Many trust deeds include an agreement to protect the home.
• Sequestration: Your trustee may seek to sell your home if there's significant equity (usually £5,000+). However, many bankruptcies proceed without home sales.
• MAP: You must not own your home (or have no equity) to qualify in the first place.

If protecting your home is the priority, DAS is usually the safest option, provided you can afford the payments.

Frequently Asked Questions

Will a debt solution affect my credit file?

Yes. All four formal solutions affect your credit file for 6 years from the date you enter them (DAS from the end of the plan, others from start). You'll likely struggle to get mainstream credit during and shortly after. Some subprime lenders will offer credit at very high rates — avoid these. If you want to rebuild your habits alongside the legal process, Gail Vaz-Oxlade's Debt-Free Forever is a practical, no-nonsense guide to getting out of debt and staying out.

Can my employer find out?

Some jobs require disclosure of formal insolvency — particularly in financial services, law, and some public sector roles. Check your employment contract. MAP, sequestration, and trust deeds are searchable on public registers (the Register of Insolvencies). DAS is recorded on the DAS Register but is less commonly checked by employers.

Which solution is cheapest?

MAP at £50 is the cheapest formal option if you qualify. DAS has no upfront fee but you repay the debt in full over time. Trust deeds have no upfront cash cost but fees come from your monthly payments. Sequestration costs £150 upfront.

What if I move to England mid-plan?

DAS, Trust Deeds, MAP, and sequestration are Scottish legal processes and generally require ongoing Scottish residence. Moving to England mid-plan is complex — take urgent advice before moving.

Do I lose my Scottish benefits if I enter a debt solution?

No. All Scotland-only benefits (Scottish Child Payment, ADP, Best Start Grant, Carer Support Payment) are paid regardless of your debt status. They're also usually protected from creditor action.

Related Articles

• Scottish Benefits Guide 2026/27 — make sure you're claiming everything you're entitled to
• Scottish Benefits Checker — see your full Scotland-specific entitlements
• Council Tax Scotland Guide — council tax debt has its own rules
• Water Charges Scotland — Scottish Water charges and payment help
• Everything Free in Scotland — non-cash Scottish benefits worth thousands

This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax rates and thresholds can change — always verify current rates with Revenue Scotland, HMRC, or mygov.scot, and speak to a qualified financial adviser for advice specific to your circumstances.

Sources: Accountant in Bankruptcy, AiB — Debt Arrangement Scheme, AiB — MAP and sequestration, Citizens Advice Scotland — Debt, Prescription and Limitation (Scotland) Act 1973