Insolvency in Scotland – What are your options?
If you’re lying awake at night trying to figure out how to pay back all the money you owe, don’t lose hope. There are several options for you to choose from, and all of them will help your situation in some way.
One option is that you may apply for a Debt Arrangement Scheme. When you sign up for a Debt Arrangement Scheme, you will be placed under a payment program that allows you to pay off your debt in pieces over an extended period of time.
Another option is to set up a Debt Arrangement Plan directly with the people/organizations you are currently indebted to. In this situation, a third party comes in and allows you to pay them a specific sum each month while they pay back your creditors. Some of these companies charge a fee for their services, but others will do it for free.
If you are able to make consistent payments for three years, you can have the rest of your debt written off if you are able to get a good Trust Deed. You must agree to pay a certain portion of what you owe and once you consistently make 36 monthly payments, the rest of the debt will be written off. Many companies that offer Trust Deeds (for the English version see IVAPros)also have Trust Deed Calculators that you can access on their websites. You enter some information, including the amount of money you owe, and the amount of money you will ultimately save is calculated for you.
Lastly, filing for bankruptcy, or sequestration, is an option. If you are unable to pay off the money that you owe, you or the person/organization you owe money to can file you for bankruptcy. Assets of value that are in your possession help pay off some of your debt, and after about a year the rest of it is written off. This gives you the opportunity to start over with a clean slate.