Remortgaging in Scotland with bad credit can be possible, and lenders weigh many of the same things as elsewhere in the UK: how recent the problems are, your equity, your income and how you have managed your mortgage. What differs is the system behind the credit issues. Scotland has court decrees rather than CCJs, sequestration rather than bankruptcy, protected trust deeds rather than IVAs, and its own statutory Debt Arrangement Scheme. The legal work is different too. None of this guarantees an outcome either way.
This page explains how each Scottish arrangement may show on your credit file and what it can mean for a remortgage, including debt consolidation. If you are struggling with payments now, free help is available from Money Advice Scotland, Citizens Advice Scotland, StepChange and MoneyHelper.
On this page
In short
- Court decrees, sequestration and protected trust deeds generally stay on your credit file for 6 years.
- A protected trust deed may require you to try to release equity from your home, so check with your trustee.
- The Debt Arrangement Scheme is statutory, and a debt payment programme may restrict new borrowing.
- Your mortgage is secured by a standard security, and the legal work is usually done by a Scottish solicitor.
Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. Borrowing over a longer term can mean paying back more in total.
How is a bad credit remortgage different in Scotland?
Lenders across the UK use the same three credit reference agencies, so a Scottish credit file looks much like any other. The entries on it can have different names and rules, though, and the table matches the Scottish terms to the ones used elsewhere on this site.
| In Scotland | Nearest equivalent in England and Wales | Generally on your credit file for |
|---|---|---|
| Court decree for debt | County court judgment (CCJ) | 6 years from the date of the decree |
| Sequestration | Bankruptcy | 6 years from the date of sequestration |
| Protected trust deed | Individual voluntary arrangement (IVA) | 6 years from the start date |
| Debt payment programme under DAS | No direct equivalent. Closest to a debt management plan, but statutory | Depends on how the programme and each account are reported |
| Standard security | A mortgage charge | Not a credit issue: it is the security over your home |
A general guide. Check your own reports, and check any arrangement with your trustee, money adviser or solicitor.
Court decrees and inhibitions: the Scottish version of a CCJ
In Scotland, a creditor who takes you to court over a debt obtains a decree, usually from the sheriff court. A decree for debt generally stays on your credit file for 6 years. The one-month removal rule for county court judgments does not apply in the same way, so paying a decree quickly may not stop it showing, although paying it can mean it is recorded as satisfied.
Lenders tend to look at a decree much as they would a CCJ: the date, the amount and whether it is paid. Our pages on remortgaging with a CCJ and satisfied CCJs explain how judgments are generally weighed.
Why an inhibition matters for a remortgage
After a decree, a creditor can apply for an inhibition. It generally stops you selling your home or granting a new security over it, which includes remortgaging, until it is dealt with. A solicitor will usually find it during the legal checks, so raise it with your adviser at the start. A creditor can also use an earnings arrestment, which takes money from your wages and may show on the payslips a lender checks.
Sequestration, protected trust deeds and the Debt Arrangement Scheme
Sequestration
Sequestration is the Scottish form of bankruptcy. For most people, discharge usually comes after 12 months, although you may still have to pay contributions from your income after that. Your trustee may have an interest in your home, so check your position with your trustee or a Scottish solicitor. Our page on remortgaging after bankruptcy covers how lenders tend to view time since discharge.
Protected trust deeds
A protected trust deed is the nearest equivalent to an IVA and commonly lasts around 4 years. If you own your home, your trustee may require you to try to release equity, often through a remortgage, and remortgaging during a trust deed generally needs the trustee’s agreement. Terms vary, so check with your trustee. Our page on remortgaging to pay off an IVA is useful background, but do not rely on IVA rules for a trust deed.
The Debt Arrangement Scheme (DAS)
DAS is a statutory Scottish scheme that lets you repay your debts in full through a debt payment programme, usually with interest and charges frozen. You apply through an approved money adviser. The programme is recorded on a public register while it runs, and creditors may still report accounts as in an arrangement or defaulted.
A programme may restrict new borrowing without agreement, so speak to your money adviser before applying to remortgage. The Accountant in Bankruptcy, which oversees DAS, sequestration and protected trust deeds, publishes official information on each.
Debt consolidation remortgages in Scotland
A debt consolidation remortgage works the same way in Scotland: you borrow more against your home and use the extra to repay other debts. The risks are the same too. Unsecured debts become secured on your home, and spreading them over a mortgage term can mean paying more in total. Our main page on debt consolidation remortgages explains the costs, and consolidating debt with bad credit covers conditions lenders may set.
- Decrees. Some lenders may require an unpaid decree to be cleared on completion, as with a CCJ.
- Inhibitions. These usually need to be discharged before the new standard security can be granted.
- A DAS programme or trust deed. Your money adviser or trustee is usually involved in any remortgage while it runs.
Your home may be repossessed if you do not keep up repayments on your mortgage. Free advice can help you compare consolidation with DAS, a debt management plan or options that leave your home out of it.
Standard securities, solicitors and the remortgage process
In Scotland, the security a lender takes over your home is called a standard security. When you remortgage, a solicitor qualified in Scots law usually discharges the old security and registers the new one with Registers of Scotland. Some lenders may offer a free legal package for straightforward remortgages, but check what is included.
A home report is needed to sell a home in Scotland, but a remortgage usually relies on the lender’s own valuation. That valuation sets your loan to value, which matters a great deal with adverse credit. Our bad credit remortgage calculator can help you estimate yours.
- Paperwork for any decree, inhibition or arrestment, with proof of payment
- Your trust deed terms, DAS programme details or sequestration discharge paperwork
Behind on your mortgage in Scotland: protections and free help
If you are behind on your mortgage, speak to your lender early. In Scotland, lenders must follow pre-action requirements before going to court to repossess a home, under the Home Owner and Debtor Protection (Scotland) Act 2010. Broadly, these include giving you information about the arrears, trying to agree a way forward and encouraging you to get advice. They do not stop arrears showing on your credit file, and our page on remortgaging with mortgage arrears explains how lenders view them.
- Money Advice Scotland can point you to free money advice near you.
- Citizens Advice Scotland gives help through local citizens advice bureaux.
- StepChange gives free debt advice across the UK, including Scotland.
- MoneyHelper is the free, government-backed guidance service.
What may affect a bad credit remortgage in Scotland
| Factor | Why it matters |
|---|---|
| Type of credit issue | A decree, sequestration, trust deed, DAS programme or informal plan may each be viewed differently. |
| Age of the issue | Options tend to widen as time passes since the decree, sequestration or trust deed. |
| Active or completed | An active trust deed or DAS programme usually means someone else needs to agree. |
| Paid or unpaid decrees | A paid decree is often viewed more favourably than one still outstanding. |
| Inhibitions and arrestments | An inhibition generally blocks a new security until discharged. Arrestments may show on payslips. |
| Mortgage payment history | Arrears on your mortgage usually weigh more than other credit problems. |
| Equity and loan to value | A lower LTV generally widens options. |
| Purpose of the borrowing | A like-for-like remortgage is often simpler than raising money to consolidate debts. |
| Income and affordability | Contributions to a trust deed, sequestration or DAS programme count as outgoings. |
| Lending on Scottish property | Check that any lender considered lends in Scotland, as some may not. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- Details of any decree, including the court, date, amount and whether it is paid
- Any inhibition or earnings arrestment, with proof of discharge or payment
- Your sequestration or trust deed dates, discharge paperwork and trustee’s details
- Your DAS programme details and money adviser’s contact details
- Your credit reports from Experian, Equifax and TransUnion
- Your mortgage balance, deal end date, any early repayment charges and an estimate of your home’s value
- Proof of income, your regular outgoings and any debts you want to consolidate
Specific situations
More detail for particular circumstances.
Remortgaging on the Debt Arrangement Scheme
How a live Debt Arrangement Scheme programme, its interest freeze and protection from diligence affect a remortgage, and what it takes to end one early.
Remortgaging with a court decree in Scotland
How diligence, particularly an inhibition, can affect a remortgage after a Scottish court decree, and what it usually takes to get one discharged.
Remortgaging after sequestration in Scotland
How discharge timing, the Minimal Asset Process, ongoing contributions and your trustee’s interest in your home tend to affect a remortgage after sequestration.
Remortgaging with a protected trust deed
How the equity clause in a protected trust deed works, getting your trustee’s agreement to remortgage, and what changes once you are discharged.
Frequently asked questions
Is a decree treated the same as a CCJ on a mortgage application?
Lenders generally treat a decree for debt in a similar way to a CCJ, looking at its date, amount and whether it is paid. If an application asks about CCJs, mention a Scottish decree too and let your adviser explain it. Being open at the start avoids problems later.
Can I remortgage during a protected trust deed?
It may be possible, but it generally needs your trustee’s agreement, and the money raised may be paid into the trust deed for your creditors. Fewer lenders consider an active trust deed. Check your terms with your trustee first.
Does a DAS debt payment programme show on my credit file?
It can. The programme is on the public DAS register while it runs, and creditors may report the accounts as in an arrangement, in arrears or defaulted. Check your free statutory reports from Experian, Equifax and TransUnion.
Can I clear a DAS programme with a remortgage?
It may be possible to repay the remaining debts early using equity. That turns debts with frozen interest into borrowing secured on your home, so talk to your money adviser before applying and compare the total cost carefully.
Do I need a Scottish solicitor to remortgage?
Generally, yes. Property in Scotland is conveyed under Scots law, so the legal work is usually done by a solicitor qualified in Scotland. If a lender offers a free legal package, it will usually appoint a firm that handles Scottish property.