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Other debt solutions include:

Consolidation Loans

Debt Consolidation Loans are widely advertised in the media and appear to be an attractive way of dealing with your debts by transferring them into one loan.

Consolidating your existing debts into one smaller monthly repayment can sometimes put an end to the stress inducing demands made by your current creditors. If used properly these loans can help you get debt free faster but there can be disadvantages for some people, particularly if they already have a poor credit rating.

You will need a good credit rating to qualify for a consolidation loan. If you have already missed or made late payments on your debts you may be unable to obtain this type of credit or you may be offered a loan at high interest rates. If this is the case, you should consider other types of debt help solutions. If a consolidation loan is unable to clear all of your debts and you still have unaffordable sums going out of your bank account each month, it may be best to talk to us about other available options.

There are a number of ways that you may be able to obtain a consolidation loan and they include:


Re-mortgaging involves raising additional money on your property. Although the repayments involved can be cheap, arrangement fees and additional charges can prove to be expensive, particularly if you are changing to a new lender. You need to carefully consider if you can afford the new mortgage payments. Like other debt solutions, re-mortgaging has its own advantages and disadvantages


You could be making a lower monthly payment with a re-mortgage than you would be with secured loans, credit cards or overdrafts.

A re-mortgage can be more flexible than other borrowing.

You may be able to repay the re-mortgage over a longer term and if it is a flexible loan, you may have the ability to make overpayments, underpayments and take payment holidays.

By lowering your monthly payments, you may have the potential to increase your disposable income.


You may be securing previously unsecured debts against your property.

If you are increasing the term over which your existing debts are currently being repaid, it could result in you paying back more in interest over the term.

Although a re-mortgage can reduce your monthly outgoings, there could be charges involved if you are changing lenders. These could include a redemption penalty for changing your current loan, an arrangement fee for moving to a new lender and valuation and legal costs.

If you have or have had credit problems then obtaining a re-mortgage may be difficult.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured against it.

Secured Loans

Secured loans are sometimes known as Homeowner plans and they can be used for a range of purposes which including debt consolidation. A secured loan is when you release equity on your property by means of securing a loan against it. If you fail to make the repayments on the loan, the lender has the power to take legal action to force you to sell the property to repay the amount borrowed and any additional charges and fees. Secured loans may be easier to obtain than unsecured ones because the lender is taking less risk by having security in your property.

Like other debt solutions Secured Loans have their own advantages and disadvantages and some are listed below:


    • You could be paying at a lower rate with a secured loan than you would be with credit cards or overdrafts.
    • A secured loan could help raise additional funds without having to face the potential charges of re-mortgaging with a new lender.
    • By lowering you monthly payments you may have the potential to increase your disposable income.


    • You may be securing previously unsecured debts against your property.
    • If you are increasing the term over which your existing debts are currently being repaid, it could result in you paying back more in interest over the term.
    • If you have or have had credit problems then obtaining a secured loan may be difficult.
    • Your home may be repossessed if you do not keep up repayments on loans secured against it.
    • Your home is at risk if you do not keep up your repayments on loans secured your property

Personal Loans

Personal loans are sometimes known as unsecured loans which can be used for a range of purposes including debt consolidation. An unsecured loan involves borrowing money without offering any security in return to the lender. As this involves a greater degree of risk for the lender if you fail to keep up the repayments, unsecured loans are usually more expensive than secured loans. To obtain an unsecured at competitive rates you will need to have a good credit rating.

Like other debt solutions Unsecured Loans have their own advantages and disadvantages and some are listed below:


    • Less risk involved to you as no security is required. Subject to their credit rating, tenants can qualify for them


    • They are usually more expensive that secured loans and those with a poor credit rating may not be able to obtain an unsecured loan or may have to high interest charges

When Debt Consolidation Loans Can Be The Solution

    • If you are paying high interest rates on debts and you can get a cheaper alternative when you need to reduce your monthly payments due to other demands.

When Debt Consolidation Loans Are Not The Answer

    • When you have already consolidated debts several times in the past.
    • If this consolidation loan will include debt from previous consolidation loans.
    • You intend to move debts from credit or store cards so that you can reuse them.

Sequestration is the Scottish legal term for bankruptcy where you are formally declared bankrupt.

Sequestration involves the transfer of your assets and property into the hands of a Trustee for the benefit of your creditors.

The Trustee in Sequestration has a duty to sell the assets/ property for the benefit of your creditors. The Trustee may seek a voluntary contribution if you are in regular employment.

Bankruptcy is often considered the last resort for people with serious debt problems especially if you have a property to protect. There are other solutions which can protect your property and allow you to repay your debt in affordable monthly instalments.

Advantages of Sequestration:

    • Your creditors will no longer be able to pursue you to recover outstanding debts.
    • Although you can expect to be discharged from the bankruptcy within a relatively short period of time but there can be long term implications.
    • You will not have to make any further payments to your Creditors.
    • All income derived from benefits will not be affected.

Disadvantages of Sequestration:

    • Any assets you have may have to be sold for the benefit of your creditors.
    • If you receive any money or property after the date of your sequestration but before the date of being discharged, you will be required to surrender it to the Trustee.
    • Your Sequestration will be noted by the Credit Referencing Agencies and you may have problems in obtaining credit even after you are discharged.
    • Many cases of bankruptcy can be avoided provided advice is sought and taken early.
    • Information about your bankruptcy will appear in the Edinburgh Gazette.
    • You may be required to make a contribution from your income.
Minimal Asset Process

The Minimal Asset Process is a route into bankruptcy for people with few assets. To be eligible to apply for your own bankruptcy through this process, you need to meet the certain conditions which include:

  • You must owe at least £1,500
  • You must not owe any more than £17,000
  • You do not own a single asset worth over £1,000(this excludes a vehicle which does not exceed £3,000 and is reasonably required by you)
  • The total value of your assets do not exceed £2,000
  • You must have taken money advice from a qualified money adviser or Insolvency Practitioner
  • You must be living in Scotland or have lived in Scotland sometime during the last year
  • You must not have been made bankrupt in the last five years
  • You must not have been made bankruptcy through the Minimal Asset Process within the last 10 years
  • You must pay the application fee of £90
  • You must have a Certificate for Sequestration signed by an authorised person
  • You must have been in receipt of benefits only for the last six months; or
  • A money adviser has assessed your income and expenditure using the common financial tool and you have no surplus to pay a debtor’s contribution.
  • You do not own any land or property

For more information please refer to the AiB Debtors Guide which can be found atwww.aib.gov.uk

A Personal Debt Repayment Plan

A Personal Debt Repayment Plan

A personal debt repayment plan, arranged by you with your creditors is usually used when you are unable to make repayments in full each month to your creditors and when you have debt problems but only require to reduce your payments for a few months.

Equity Release

Equity release is a means of releasing equity from your home which can be taken as a lump sum or as an income. The proceeds could be used to either repay your debts in full or to offer your creditors a full and final (discounted) settlement.

Full and Final Settlements

A ‘full and final settlement’ offer is when you ask your creditors to accept a reduced lump sum payment from you as a settlement of your debts in full. In return for having a lump sum payment, the creditor agrees to write off the rest of your debt.

Your Next Step To Becoming Debt Free:

Try Our Debt Solution Finder

Careful consideration should be taken before choosing any debt solution.

Debt Advisory Services (Scotland) Limited only recommends appropriate debt solutions after we have conducted a full review of your personal financial circumstances.

Our Financial Review Service is completely free and there is no commitment for you to action any of the solutions that we recommend to help you deal with your financial problems.

To find out more about becoming debt free you can:

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    Download our free debt help guide by completing the short form above.

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    Forward your details to us by completing our contact form and we will call you back.

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    Ring us on 0800 011 2322 (free from landlines) or on 0141 956 4088 to discuss your situation with one of our fully trained advisors.


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If you need confidential advice or help to quickly find the best solution tailored to your personal circumstances call us now on

0800 011 2322 or
0141 956 4088


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