Log and Transfer - Hard drive low disk space even though clips are saved to external drive

When trying to capture it says " Low Disk space." The log and transfer seems to be Capture Scratch files on my Hard drive. I am trying to log and tranfer files to external drive. After saving on external drive. I still do not have enough disk space. If I delete the files in capture scratch on Hard drive, I cannot retrieve the files any longer. How do get the capture scratch AND the transfer clips on external drive?

Help!

Amy