Can I write off my debt in Scotland?

By: Scottish Debt Expert0 comments

Jack has been struggling to pay off his debt for what feels like an eternity. Every time he thinks he’s close to getting back on his feet, he’s met with another obstacle knocking him down. It started with the lure of store cards. Then he started to default on his rent, utilities, and council tax payments. Soon, HMRC were breathing down his neck.

Jack feels like he’s tried every trick in the book. With one final push, he reached out for professional advice, his last glimmer of hope to write off his debt.

Following a very enlightening conversation with the debt advice team, Jack realised there were multiple options for him. They gave him the peace of mind to know that he was choosing the absolute best option for his situation.

If you’re in a similar situation to Jack, you’ll want to know how to write off your debt too. In this article, I’m going to help you understand what is involved in the writing off debt process. Firstly, I’ll explain what debt write off actually is, what options are available for clearing your debt, the advantages and disadvantages of each of these options, and why seeking free professional help is so important.

writing off debt

What is Debt Write off?

We get a lot of people asking how they can wipe the slate clean and see the back of their debts for good. 

Creditors have the authority when it comes to writing off your debt. Getting your debt cleared by a creditor is unusual, unless you can provide proof of exceptional circumstances. Depending on your personal situation, creditors may agree to partially write off, or completely write off your debt.

If you fall under the following categories, you should seek further advice to see whether you should contact your creditor to help clear your debt:

  • Permanently unfit to work
  • Terminally ill
  • Mental health problems
  • Vulnerable (Dementia, recent bereavement, learning disabilities, relationship breakdown, addiction)

In these circumstances, after speaking with your debt advice service, you may be encouraged to contact your creditor, asking them to write off your debt. If you have no assets to your name, and can show evidence that it’s not fair for creditors to keep chasing you up for your debt, you should be considered. Creditors are only likely to agree to completely clear your debt in the most extreme circumstances.

It’s very important that you have the necessary evidence to show proof of your circumstances, like medical notes, before you’ll be considered. 

If you’re struggling to pay off your debts and don’t fall under any of the above categories, there are a number of insolvency debt solutions at your disposal. These debt solutions are designed to make writing off your debt much more manageable.

what is debt write off?

Options for writing off your debt – Advantages and Disadvantages  

Now, we’ll go through the abundance of options available to you. We’ll go through the pros and cons of each method, helping you to identify options most suited to you so you’re armed with information before speaking to a debt expert.

Debt Arrangement Scheme 

Set up by the Scottish Government, The Debt Arrangement Scheme (DAS) is a free debt management solution that allows you to repay your debts (usually within 10 years) at a rate that suits your financial position. Through the DAS, you can establish a Debt Payment Programme (DPP) which must be approved by a money adviser. 

If your application is approved, you’ll make a payment to a payment distributor, who then passes on the money to your creditor. It’s handy to know that creditors can’t chase you up for the money you owe. 

If you continue to keep up with your payments, all interest and charges will be dropped from the date of your approved application. 

Am I eligible?

To be eligible for DAS, you must:

  • Have at least one debt.
  • Live in Scotland.
  • Apply through an approved money advice service.



  • You have a considerable amount of time to repay your debts over a reasonable period (usually 10 years).
  •  DAS will protect you from creditors taking further court action to recover the debt.
  • Only 1 payment per month is required.


  • The process can take time as you can’t apply directly. The application must be approved by a money adviser.
  • Your bank account may be suspended, meaning you may need to get a basic bank account.
  • Although the DPP is free, approved money advisers may charge a fee.


Trust Deed 

A trust deed is an agreement between the debtor and the creditor that outlines the amount of money that has been agreed to be paid between the two parties. Written up by a licensed insolvency practitioner, a Trust deed allows you to repay your unsecured debts through monthly instalments over a 4 year period.

Once the repayment period is over, all existing debt is wiped off. 

Creditors that have agreed to the trust deed cannot add further interest to the money you owe them, nor can they take further court action if you consistently pay your monthly instalments. This is known as a protected trust deed.

Am I eligible?

To be eligible for a Trust Deed, you must:

  • Have at least £5,000 worth of debt.
  • Have unsecured debts such as credit cards, personal loans, and overdrafts.
  • Have income that you can use to pay down your debt, or valuable assets that have the equivalent value to pay down your debt. 



  •  The debt you owe the creditor freezes at the beginning of the process if they agree to the terms of the trust deed.
  • You still have access to a bank account, but you do not get a cheque book, card or an overdraft facility.
  • No further interest is added to your debt if you keep up with your monthly repayments.


  • Creditors have to agree to the terms of the trust deed before the agreement is made. They have every right to disagree and take further action. However, once they’ve agreed they can’t reverse their decision.
  • The trustee can attempt to make you bankrupt if you do not assist in the proceedings.
  • Your credit rating will be affected.


Debt Management Plan

A debt management plan (DMP) is an informal agreement between a debtor and their creditor to pay back the debt owed by regular instalments.  It is very similar to the Debt Arrangement Scheme (DAS), however you arrange your plan through a DMP provider. You make a direct payment to the DMP provider who then passes the debt onto your creditor(s). You’ll usually have up to 10 years to repay your debt.

One thing to look out for is that some DMP providers charge a fee to use their services, so make sure you shop around and evaluate all options, paid or not paid to ensure you are getting the best service. Contact us at Scottish Debt Expert for advice on DMP providers. 

In our honest opinion, a Debt Arrangement Scheme is usually a much better option that a DMP. Although they sound extremely similar, DAS offers you more protection from creditors.



  • You can increase your monthly payment if your financial situation improves, paying off your debt quicker.
  • Fair method for distributing payments.
  • The debt management company will negotiate with creditors for you so your offers are more likely to be accepted.


  •  DMP’s only cover non-priority debts whereas DAS covers both priority and non-priority debts.
  • Interest rates and charges will not stop once you enter a DMP whereas they will in a DAS.
  • Creditors can still take court action against you.



Sequestration is the legal Scottish equivalent of bankruptcy. This is normally a last resort for debtors, which allows you to write off the majority of your debts. Any assets that you own may be used to pay off your debts. 

You have the option to file for bankruptcy yourself, or a creditor can also apply to make you bankrupt. 

There are 3 different ways to apply for sequestration:

  • If you have debts over £1,500.
  • If you have not been sequestrated in the last 5 years.
  • If you live in Scotland, or have lived in Scotland during the last year.

There are also 3 different ways to enter sequestration:

  • You can be made bankrupt by your creditor, if you have unsecured debts of £3,000 or more.
  • Bankrupt yourself by applying to the Accountant in Bankruptcy.
  • If you owe more than £1,500 and have little to no assets, you may be able to use the Minimal Asset Process, or MAP bankruptcy.


Minimal Asset Process 

Introduced in 2015, MAP bankruptcy has replaced the Low Income Low Asset (LILA) process which no longer exists as a route into bankruptcy. 

MAP aims to give the debtor a clean slate by clearing debts that can’t be paid within an allotted period of time. 

The process lasts for 6 months and then you will be discharged. If you decide to apply for further credit after the initial 6 months, you will be under certain restrictions for the following 6 months. 

If interested, you must apply through an approved money advice organisation.

If you have low income, assets worth less than £2,000 and your debt owed surpasses £1,500 you may be eligible for Minimal Asset Process (MAP) bankruptcy. 

There are also a few other requirements that grant you eligibility for MAP bankruptcy:

  • You own a car worth less than £3,000.
  • You own no single asset worth more than £1,000.
  • You can’t be in ownership, or jointly own a house or any other property.

In terms of fees, you will be charged £90 to apply for MAP. You’ll also have to pay a fee of £200 before you apply for bankruptcy. There is a possibility of paying the bankruptcy fee in instalments if you are unable to pay the lump sum. We advise you to double check this before making assumptions.

For more information about MAP, how to apply for MAP, or whether you are eligible to apply for MAP, please don’t hesitate to get in touch with us at Scottish Debt Expert for professional advice.



  • Relief of being free of debt.
  • More cost efficient than standard sequestration.
  • Debts discharged after 6 months.


  • The trustee has firm control of your finances.
  • Bankruptcy will be on your credit file for 6 years.
  • Loss of certain assets.


Full and final settlement offer

As we mentioned earlier on in the artice, creditors may agree to write off your debts in part, or in full,  as a result of exceptional personal circumstances. 

If you have a lump sum that can pay off part of your debt, you can ask your creditors to accept a partial payment and write the rest off.  

In exceptional circumstances, you may provide your creditor with proof that your situation is unlikely to change. For example if you are seriously ill and unable to work, which in turn affects your income, it may be possible to ask creditors to write off your debt problems completely. 



  • Clear your debts in full by paying only part back.
  • Clean slate.
  • Stress-relief. 


  • You must get an agreement from the creditor before paying the lump sum.
  • Credit file will be affected, but your file will show you have made a ‘partial settlement’.
  • A creditor may refuse your offer and try to recover the whole debt by taking further legal action.


options for writing off your debt

Advice on writing off debts

If you are even the least bit uncertain of what you should do to repay your debts, we can’t stress enough how important it is to get in touch with us. It’s crucial that you weigh up the options available to you and tackle your issues head on to avoid further stress and anxiety. 


advice on writing off debts

Contact us

If you are unsure about the next step in your debt repayment process, please don’t hesitate to contact us.

At Scottish Debt Expert we offer help and guidance to anybody struggling with debt. Our Glasgow staff are on hand to have a chat with you to clear the air and advise you on your next step.

We’re available by telephone, email or face to face and will always arrange a call back within 24 hours. Email us at or call us at 0141 483 7477 between 9am-5pm Monday to Friday.  

Related post

Leave A Comment