Scotland runs its own debt solutions, so the routes used in England and Wales do not apply to borrowers living there. The Scottish Government’s mygov.scot service describes three formal options: the Debt Arrangement Scheme, trust deeds and bankruptcy. This guide covers Scotland only.
Temporary relief and where to start
mygov.scot says that anyone considering a trust deed, bankruptcy or another debt solution may be able to apply for a moratorium, which is temporary relief from creditors lasting 6 months. It stops actions such as arresting wages, taking possessions and starting new court action. The Scottish Government funds free debt advice, and bankruptcy and the Debt Arrangement Scheme both have to be arranged through an approved money adviser.
The Debt Arrangement Scheme
The Debt Arrangement Scheme (DAS) lets a person repay debts at a rate they can afford, through a debt payment programme, and is run by Accountant in Bankruptcy (AiB), part of the Scottish Government. It is only available in Scotland and applications go through a DAS-approved money adviser, since not every adviser is approved. The programme can run for longer than the original credit agreements.
The repayment level depends on disposable income, which the adviser works out using the Common Financial Tool, the same tool used for every debt solution. Couples with debts can apply jointly. Once the money adviser or AiB formally asks creditors to agree, creditors cannot ask for money, take the person to court, apply to make them bankrupt or add interest, fees or charges. mygov.scot says a debt management plan run by a company does not give the same protection.
Protected trust deeds
A trust deed is a legally binding agreement to pay all or some of what is owed, and is aimed at unsecured debts such as credit card debt and personal loans. Only a licensed insolvency practitioner can arrange one and acts as trustee, using the Common Financial Tool to work out affordable payments. The proposal goes to creditors, who have 5 weeks to reply, and then to AiB.
A trust deed is protected only once AiB has approved it, and it cannot be agreed if more than half of creditors object or if creditors owed one third or more of the debt object. Once protected, creditors cannot contact the person directly, chase payments, add interest or charges or take court action. If it is not protected, creditors can still act and can ask the court to make the person bankrupt. Debts are written off at the end only if the deed is protected. Payments usually run for 4 years.
What advisers and trustees ask for
mygov.scot says a trustee arranging a trust deed will want copies of bank statements, pay slips, benefit award letters and household bills, plus a full list of creditors and the amounts owed, and will ask about assets, particularly property or a car. In a marital household, details of full household income are requested. A trustee may refuse to discharge a person from a trust deed where the agreed terms have not been kept, for example where not all payments were made.
For bankruptcy, mygov.scot defines assets as things owned over the value of £1,000, such as property, cars and jewellery, and disposable income as money left after essential living costs such as rent or mortgage, food and utility bills. A bankrupt person must tell the trustee about changes in circumstances and follow the bankruptcy rules.
Bankruptcy in Scotland
Bankruptcy, also called sequestration, is applied for through an approved money adviser or insolvency practitioner and cannot be applied for directly. On 21 September 2026 mygov.scot gave the application cost as £150, with some people not needing to pay a fee. AiB decides whether to grant it, assets can be used to repay debts, and a trustee manages the case. Details appear on the Register of Insolvencies.
There are two types. The Minimal Asset Process suits people with few assets, no disposable income and debts under £25,000, and discharge comes after 6 months. Full Administration applies to those who do not qualify, usually because they have assets or disposable income, and requires debts of at least £3,000. In full administration, discharge normally follows after one year, although payments towards debts usually run for 4 years and the full process can last longer.
FAQs
Can a person apply for Scottish bankruptcy directly?
No. mygov.scot says an approved money adviser or licensed insolvency practitioner must make the application.
Do creditors have to stop contacting a person in a DAS programme?
mygov.scot says protection begins when the money adviser or AiB formally asks creditors to agree to the programme.
Are debts always written off in a trust deed?
Only if the trust deed is protected; otherwise creditors can still take action.
Bottom line
Scotland offers three formal routes, each arranged through advisers and overseen by Accountant in Bankruptcy or a licensed practitioner: the Debt Arrangement Scheme for full repayment on affordable terms, a protected trust deed usually lasting 4 years, and bankruptcy with discharge after 6 months or one year. This is general information, not financial or legal advice; free debt advice funded by the Scottish Government should be used first.