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- What is the payment actually based on?
- How does a provider work out your disposable income?
- How is the payment divided between your creditors?
- Is there a minimum payment?
- What do fees and interest do to the figure?
- What does this mean if you live in Scotland?
- What if the payment does not work any more?
- Related guides
- Frequently asked questions
It is what is left each month once your household has paid its essential living costs and its priority bills. That surplus is what gets shared between the creditors in the plan.
It is not a percentage of what you owe. The size of the debt sets how long the plan runs rather than what you pay each month.
Part of your pay is protected by law
The deduction is set by statutory tables, not the creditor
An arrestment can be stopped or replaced
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Two people owing very different amounts can pay the same figure, and how long a plan lasts explains why one of them finishes years before the other.
Nothing in Scots law sets the sum, because the plan is not a statutory scheme. What is regulated is how the provider arrives at it.
What is the payment actually based on?
Surplus income. Everything coming in, less everything the household has to spend before any debt in the plan is paid.
What goes where
| The item | How the budget treats it |
|---|---|
| Wages, benefits, pensions and other household income | Counted as income |
| Rent or mortgage, council tax, energy and water | Paid in full as ongoing costs, before any surplus exists |
| Food, travel, insurance and childcare | Essential expenditure inside the budget |
| Credit cards, loans, overdrafts and catalogue accounts | Non-priority debts, paid out of the surplus through the plan |
| Council tax arrears, fines, tax arrears and child maintenance | Priority debts in Scotland, dealt with outside the plan |
| A commercial provider's fee | Taken out of the monthly payment before creditors are paid |
National Debtline’s Scottish guide puts it as a subtraction: household income, minus essential expenses, with the remainder available for debt repayment.
What counts as income
Wages, benefits, pensions, tax credits and any contribution from another adult in the household all go in. Take the figure that actually reaches your account rather than the one on the contract.
Where your pay varies, use a realistic average across several months. A plan built on your best month is a plan that breaks in your worst one.
Ongoing bills are never in a plan
This month’s rent, this year’s council tax and your energy bills carry on being paid as normal. Only arrears are ever in question.
Which debts can go into a plan sets out what belongs inside it and what does not.
Secured debt sits outside as well
A mortgage, a secured loan and hire purchase on goods you need are handled with the lender. The consequence of not paying them is something a plan cannot hold back.
How does a provider work out your disposable income?
From a budget it then checks. CONC 8.3.2 is a rule about the advice a firm gives and the action it takes for you.
The Scottish point nobody makes
For the statutory routes the tool is prescribed. Regulation 15(1) of the Bankruptcy (Scotland) Regulations 2016 names the Common Financial Statement as the common financial tool.
Most sources name the Standard Financial Statement, which is the tool used elsewhere in the United Kingdom. Regulations that would have moved Scotland to it were drafted in 2018 and never made.
Nothing prescribes the tool for a debt management plan. Ask your provider which one it uses and what spending guidelines sit behind the figures.
What you should be given before you commit
CONC 8.3.1 is a rule requiring pre-contract information in a durable medium, and it runs to fourteen numbered limbs.
Which budget information you need lists the paperwork to gather before that conversation.
The figures get checked
A provider will ask for evidence of what you have told it, and creditors are being asked to accept less than they contracted for. The statement that goes out has your name on it.
Read it before it is sent. An error in the expenditure column is the easiest way to end up with a payment you cannot keep.
Do not offer your best month
A budget built on an optimistic month breaks the first time the car needs tyres. A payment you can keep through a bad month is worth more than a larger one you cannot.
StepChange’s own client agreement is a reminder of what is at stake, because creditors may keep charging interest and taking action whatever you offer.
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How is the payment divided between your creditors?
No rule prescribes how the payment is split, and pro rata by balance is the usual method. Ask for your provider’s method in writing before you sign.
A worked example, on the usual method
| The creditor | Balance | Share of the debt | Monthly payment from £150 |
|---|---|---|---|
| Credit card | £4,000 | 50 per cent | £75 |
| Personal loan | £2,400 | 30 per cent | £45 |
| Catalogue account | £1,200 | 15 per cent | £22.50 |
| Overdraft | £400 | 5 per cent | £7.50 |
| Total | £8,000 | 100 per cent | £150 |
On the pro rata method you divide the money available by the total debt, then multiply by each balance. That is the whole of the calculation.
The rules govern disclosure of the method rather than the method itself, and how a plan works sets out what a provider has to tell you before you sign.
When the split changes
Balances move at different speeds, so the shares are recalculated as the plan runs. A debt that is cleared frees its share for everyone else.
Ask how often your provider redoes the calculation. On some plans it happens at the annual review rather than every month.
Why the split matters
A creditor still charging interest takes its share every month and stands still. Whether a plan freezes interest explains why no creditor has to stop.
A creditor that refuses the plan altogether keeps every right it started with, which whether creditors have to accept deals with.
Is there a minimum payment?
No statutory minimum. National Debtline’s Scottish guidance screens for whether you can pay at least £5 a month to each debt.
The two screening questions
The other is whether the debts can be repaid within ten years. Both are practical filters used before a free plan is set up rather than legal rules.
A budget that fails either question is not a failure on your part. It is a sign that a different route fits better.
There is no maximum either
Nothing stops you paying more than the offer, and every extra pound comes off the balance once interest is frozen. Tell the provider so the shares are recalculated.
Token payments
Accepting no payment, reduced payments or token payments for a reasonable period appears in the Handbook’s list of forbearance examples at CONC 7.3.5, which is guidance rather than a rule.
So a token payment arrangement is something to ask for, not something to expect. A creditor that says no is not breaking a rule by saying it.
What do fees and interest do to the figure?
A commercial provider’s fee comes out of the payment before your creditors are paid. Interest that keeps running eats into what reaches the balances.
Fees
A commercial provider may charge, and there is no cap on what it may charge.
CONC 8.7.2 is a rule, and it says a firm’s fees must not undermine your ability to make significant repayments to lenders, starting with the first month of the plan.
Guidance adds that more than half of your payment going to the firm is likely to break that rule, which is not permission to take half. Whether plans are free or charge fees goes through it.
The free route
StepChange and Christians Against Poverty both run plans at no cost to you, and neither takes anything out of the monthly payment.
National Debtline and Citizens Advice Scotland give free advice on whether a plan is the right answer, without administering one for you.
Interest
No creditor has to freeze interest because you are on a debt management plan. No statute requires it and no Financial Conduct Authority rule requires it.
Where a creditor keeps charging, part of your payment goes on charges instead of the balance. That is a term problem rather than a payment problem, and it is worth chasing every year.
What does this mean if you live in Scotland?
That the same budget produces very different consequences depending on the route. A statutory deduction from your wages is not calculated from a budget at all.
Who sets the figure
| The route | What sets the payment | What it binds |
|---|---|---|
| Debt management plan | Your budget, using whatever tool the provider uses | Each creditor decides whether to accept it |
| Debt Arrangement Scheme programme | Your budget, assessed with the prescribed common financial tool | Approval binds the creditors |
| Earnings arrestment | Statutory tables, with no affordability test at all | Your employer applies them to your net pay |
The arrestment tables are in Schedule 2 to the Debtors (Scotland) Act 1987 as substituted by SSI 2024/293 with effect from 6 April 2025, and how much they can take from your wages works through the bands.
Why that contrast matters before you offer anything
An arrangement is worth having because the alternative is a figure nobody assessed. A statutory deduction takes what the table says whether or not the rest of the budget survives it.
That is the reason to deal with a creditor before it reaches a decree. The window for a budget to matter is the window before enforcement starts.
Priority debts change the arithmetic
Those rules bind only firms the Financial Conduct Authority regulates. They do not reach your council for council tax, HMRC, or the Child Maintenance Service.
Council tax arrears usually need their own arrangement with the council, which whether they can go in a plan covers, alongside our council tax debt advice page.
And the statutory route uses a different tool
A programme under the Debt Arrangement Scheme is assessed with the common financial tool and freezes interest, which the comparison between the two routes sets out in full.
What if the payment does not work any more?
Say so early. CONC 8.8.1 is a rule requiring a review at each anniversary or sooner on a material change.
Changing the figure
A payment can go up or down as your circumstances move. Changing your plan payment sets out how the revision is handled.
What a change of income means in practice
A fall in income means a smaller payment and a longer plan. A rise means the opposite, once the extra costs that came with it are allowed for.
Either way the creditors are told and the figures are redone. Nothing in a plan is fixed for its whole length.
And check the route is still right
Where the surplus has fallen far enough that the term stops making sense, that is a reason to compare the statutory options rather than to keep going. What a debt management plan is is the place to start again from.
Nobody in Scotland has to pay for debt advice, because Citizens Advice Scotland, StepChange, National Debtline and Advice Direct Scotland all give it free.
Take your last three payslips and a recent bank statement to that conversation. The figures decide the answer, and the sooner they are accurate the better.
Frequently asked questions
How much will I pay each month on a debt management plan?
Whatever your budget leaves after essential costs and priority bills. No published figure exists for a typical payment, because the sum comes from your own circumstances.
Is the payment a percentage of what I owe?
No. What you owe decides how long the plan runs, and what you can afford decides what you pay each month.
Is there a minimum monthly payment?
Nothing statutory sets one. National Debtline’s Scottish guidance screens for whether you can pay at least £5 a month to each debt and clear them within ten years.
How is my payment split between creditors?
No rule prescribes a split, and pro rata by balance is the usual method. On that method you divide the money available by the total debt and multiply by each creditor’s balance, but ask your own provider for its method in writing.
Which budget tool will my provider use?
Whichever one it uses, because nothing prescribes a tool for a debt management plan. The Scottish statutory routes are assessed with the Common Financial Statement under regulation 15(1).
Do fees come out of my payment?
With a commercial provider, yes, before creditors are paid. A charity provider takes nothing out of the monthly payment.
Does a wage arrestment work out the deduction the same way?
No. It uses statutory tables applied to your net pay with no affordability assessment, which is the sharpest difference between a deduction and an arrangement.
Can I change the payment later?
Yes, and you should tell your provider as soon as your circumstances change. A review is required at each anniversary and sooner where the firm learns of a material change.
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Written as general information about Scottish debt law rather than regulated financial or legal advice, and your own circumstances may change the answer. Free, impartial help is available from Citizens Advice Scotland, StepChange, National Debtline and Advice Direct Scotland.