Debt Arrangement Scheme

Overview

The Debt Arrangement Scheme (DAS) is a debt solution available to people living in Scotland.

Devised by the Scottish Government, the Debt Arrangement Scheme offers a day of repaying unaffordable debt through a Debt Payment Programme (DPP) with a single monthly payment.

A Debt Arrangement Scheme is only available to residents in Scotland

 

What is the Debt Arrangement Scheme (DAS)?

The Debt Arrangement Scheme, also known as DAS, is a debt solution open to people living in Scotland.

It was created by the Scottish Government to support people struggling with unaffordable debt.

The concept of the Debt Arrangement Scheme is simple. It allows you to repay debts owed with affordable monthly payments. This payment is part of a Debt Payment Programme (DPP).

Monthly repayments are divided between the people and companies you owe money to until your debts are paid in full.

There’s no debt limit to consider when you apply for a Debt Payment Programme through the Debt Arrangement Scheme. You can also apply a Debt Payment Programme with another person such as your spouse, civil partner or a cohabiting partner, if you’re both liable for at least one debt.

 

How long does the Debt Arrangement Scheme (DAS) last?

The aim of the Debt Arrangement Scheme is to help you stick yo a debt payment plan that will allow you to pay off the debt you owe in a reasonable amount of time.

The Accountant in Bankruptcy (AiB) will decide whether the proposed length of time is reasonable when you make your Debt Payment Programme application.

While there is no definitive answer to what a reasonable amount of time is considered to be, the Debt Arrangement Scheme typically last 10 years for most people.

A decade can seem like a long time to stick to a repayment plan with no changes so it’s important to be aware there’s help available should your circumstances change during this time.

You can apply to change your contribution to the Debt Payment Programme if your circumstances change.

You can also apply for payment holiday of up to six months if your income drops because of redundancy. This time will be added to the remainder of your DPP.

There is also the opportunity to apply for a one month crisis payment break if you have an emergency that means you can’t pay. You’re entitled to two crisis payment breaks in a year.

Am I eligible for the Debt Arrangement Scheme (DAS)?

You must meet certain criteria to be eligible for the Debt Arrangement Scheme. To apply tou must:

  • Live in Scotland
  • Owe money to one or more creditors
  • Have a reasonable disposable income left after outgoings that could go towards debt payments
  • Aren’t bankrupt, subject to bankruptcy restriction order or are in a Protected Trust Deed.

There’s no minimum or maximum debt level required to enter the Debt Arrangement Scheme so permitting you meet the criteria above, an approved money adviser could set up the Debt Payment Programme on your behalf.

What debts can be included in the Debt Arrangement Scheme (DAS)?

The Debt Arrangement Scheme (DAS) might be the right debt solution for you depending on your financial circumstances.

The DAS typically involves unsecured debts. Examples of these include:

  • Credit card debt
  • Personal loans
  • Council tax arrears
  • Overdrafts
  • Payday loans
  • Utility bills

If you’re worried about mortgage arrears there is a chance these could be included in the Debt Payment Programme in the DAS. You should speak with your money adviser about this when making your application.

However, while there is potential for mortgage arrears to be included in the DPP other secured debts such as hire purchase agreements, legal debts and student loans can’t be included.

Evidence of your Debt Payment Programme will show on your credit file for a minimum of six years

Will the Debt Arrangement Scheme (DAS) affect my credit rating?

As with most debt solutions, the Debt Arrangement Scheme will affect your credit rating.

This is because when you enter the scheme your details will be added a public register known as the DAS Register.

While it’s unlikely the general public will ever view the DAS Register, the information will be shared with credit reference agencies such as Equifax and Experian.

Evidence of your Debt Payment Programme will show on your credit file for a minimum of six years, or the length of time it takes you to repay what you owe.

The file will also show that you made reduced payments towards debt owed through the DPP which could highlight to future lenders that you’re experiencing financial difficulties and make accessing further credit more difficult.

How do you apply for the Debt Arrangement Scheme (DAS)?

Applying for the Debt Arrangement Scheme is straightforward. You’ll work with an approved money adviser who will make the application for the Debt Payment Programme on your behalf.

Here we outline the process that will follow after your application has been submitted.

  • The proposal is sent to all the creditors you owe money to and they’re given 21 days to respond with their objection.
  • If there are no objections, the Debt Payment Programme is automatically approved.
  • If one or more creditors object, the debt payment plan can still be approved if it’s deemed to be fair by the Accountant in Bankruptcy.
  • You may be required to submit a new Debt Payment Programme for approval based on your current financial circumstances. If this happens you’ll be given support from your money adviser who will resend this to your creditors.
  • Permitting the revised proposal is fair, creditors won’t be able to stop the debt payment plan being approved.

If your alternative Debt Payment Programme is rejected again please be aware that you have the right to appeal the decision. However, if this is unsuccessful the Debt Arrangement Scheme might not be the best solution for you and you’ll be asked to consider other options such as a Trust Deed or bankruptcy.

How we helped Paige

It was literally the best decision of my life, and it has actually changed my life, cheesy as that sounds, it has changed my life.

Paige , IVA Customer

Is the Debt Arrangement Scheme (DAS) free?

There is no cost attached to setting up a Debt Payment Programme as part of the Debt Arrangement Scheme.

Debt advice experts and money advisers are no longer permitted to charge a fee to apply for a Debt Payment Programme.

There is an administration fee required to cover the cost of running the Debt Payment Programme but this will be paid by your creditors.

Advantages & Disadvantages of bankruptcy

Advantages

It doesn't matter how much debt you have when entering the Debt Arrangement Scheme

You'll make a single monthly payment based on what you can afford

Your DAS approved money adviser will arrangement and manage your payment plan on your behalf.

It will prevent creditors from taking legal action to recover money owed to them such as debt collection or threatening court action.

You can apply for a six month payment holiday if you find that you're unable to stay on top of your debt repayment.

The DAS is flexible to allows you to increase or decrease your payments based on your circumstances.

Your possessions, also known as assets, won't be put at risk. That means you won't be forced to sell things like your home to repay all your creditors.

If you have a wage arrestment in place, that is money taken from wages in your bank account to cover debt payments, will stop.

Disadvantages

The Debt Payment Programme will last until all of the debts owed are paid in full

You must apply for a Debt Payment Programme through a DAS approved money adviser and can't do this on your own

The DAS will appear in your credit history and can be it harder to obtain credit in the future

The DAS doesn't allow you to write off a percentage of debt unlike other debt solutions like a Trust Deed

If you don't make all the payments owed in the Debt Payment Programme the DAS could be revoked. This means creditors could start taking legal action against you again

Where can I find advice about the Debt Arrangement Scheme (DAS)?

The Debt Arrangement Scheme may be the best debt solution for you if you’re keen to pay all the money you owe to your creditors but are struggling with unaffordable monthly payments.

The Your Debt Expert team can offer debt advice tailored to your circumstances and help you find a solution that can help your financial difficulties.

Call us on 0800 082 8086 to find out more.

Where can I get more advice on Debt Arrangement Scheme and other debt solutions?

To discuss your options and get the support you need to deal with your debt today, contact us now on 0800 082 8086 or click the button below to get started