Summary
Debt level: c£40k | Employment: State pension and part-time retail work | Approval Date: March 2020 | Status: Completed April 2026
Our client approached us at the outset of the COVID-19 pandemic. Having recently retired, her income had fallen considerably, and she was no longer able to maintain her existing debt repayments. At the same time, she was managing difficult personal circumstances, with a close relative receiving palliative care. A review of her income and expenditure confirmed that her home had become unaffordable long-term, and that downsizing would eventually be necessary. The practical realities of the lockdowns, however, made a sale and rehousing impossible within any reasonable timescale. What the client required was protection from her creditors and sufficient time for her circumstances to settle, without the pressure of a forced sale, at an already distressing time.
Challenges
- Timing: An eventual property sale was the obvious route to repayment, yet the lockdowns rendered a sale and rehousing impractical for an indefinite period. The client required a solution that afforded her breathing space, rather than one that assumed immediate action.
- Vulnerability: Newly retired and on a reduced income, the client was also supporting a family member in palliative care. Any arrangement needed to ensure her stability, to better help her cope throughout a period of considerable personal difficulty.
- Flexibility required: With her future circumstances uncertain, a rigid arrangement would not suffice. It had to allow for adaptation should her position change.
Outcomes
- Debts repaid in full, delivering a complete return to creditors.
- The client retained her home, avoiding a rushed sale during lockdown.
Success Story
WB Debtcare proposed a Debt Arrangement Scheme (DAS), which was approved. In recognition of the exceptional circumstances, the arrangement incorporated a discretionary condition. The DAS afforded the client protection from creditor action and a reasonable period in which to sell her property and repay her debts from the available equity. It was intended as a temporary holding measure rather than a fixed, long-term repayment plan.
During the course of the arrangement, the client’s circumstances improved. She began cohabiting with her partner, which improved household affordability and provided an alternative to a sale. Instead of downsizing, she was able to release equity from her home and repay her creditors in full. The arrangement concluded thereafter, with all debts settled.
This case demonstrates how a DAS can provide valuable breathing space where the immediate realisation of an asset is not practical, and how carefully applied discretionary conditions can address exceptional situations effectively. It also illustrates the importance of flexibility. A client’s circumstances may shift over the lifetime of an arrangement, and a solution designed to accommodate that change can still deliver a full return to creditors while protecting an individual at a vulnerable point in their life.
Benefits of a Debt Arrangement Scheme
- The sum being paid each month is calculated based on what is genuinely affordable, rather than the individual having to meet multiple contractual requirements across several unsecured debts.
- Once approved, the agreement is legally binding on all creditors, and as long as the payment plan is maintained, those creditors cannot take any further action to recover the debt.
- Any existing wage arrestments (when money is deduced from your salary by payroll to pay to a creditor) are removed once the DAS is approved.
- The plan doesn’t take into account your assets (unlike insolvency when those may need to be sold), so it’s a great way to protect your assets, so long as a structured repayment plan is put in place.
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