The Debt Arrangement Scheme (DAS)
What is the Debt Arrangement Scheme?
The Debt Arrangement Scheme is a debt solution introduced by the Scottish government in November 2004. The debt arrangement scheme (DAS) helps you repay your debts over a period of time and at a rate that you can afford. Anyone who lives in Scotland can apply for a debt payment programme under the DAS if they have two or more debts and are having difficulty keeping up with their payments. You cannot apply if you are currently bankrupt or have signed a Trust Deed. If you are subject to a bankruptcy restriction order or paying debts under a conjoined arrestment order you are also restricted from applying.
What is a debt repayment programme?
If you are on a debt payment programme, instead of making lots of smaller payments to different lenders, you will make one single payment to a payment distributor instead. The payment distributor will forward payments on to each of the lenders. The payment will be split in relation to the size of the debts.
If your application for the debt payment programme is successful and you keep up with your payments, Creditors will not be allowed to take further action (such as wage arrestment) to enforce the debt.
Interest, charges and fees on existing debts will be frozen from the date the programme is approved.
Who can apply for a debt payment programme?
Individual can't apply directly to the scheme. Instead, they need to ask a qualified Money Adviser to make an application on their behalf. The money adviser will check how much money the indiviudal can spare after living expenses. They will then contact all Creditors with the proposals and apply to have the individual placed on the scheme.
Once the application for a debt payment programme has been made, it will then be considered by a DAS administrator.
Advantages
- Once your repayment programme has been approved you will be protected from any legal action imposed by your Creditors.
- Similarly, once the programme is approved Creditors are unable to add any interest and charges to your existing debt ensuring your debt does not continue to increase.
- Your home will not be affected as long as you keep up any mortgage payments.
- Monthly payments are based on what you can reasonably afford to pay.
- If you are a sole trader and you have business debtss, these can be included within the debt repayment programme.
- Your Money Advisor will deal with all Creditors on your behalf.
Disadvantages
- You may only make one application to the Debt Arrangement Scheme within any twelve month period.
- The scheme will last until your debts are cleared – there is no fixed time period.
- You cannot apply directly to be protected by the Debt Arrangement Scheme. An application must be made on your behalf by an Approved Money Advisor increasing the time it takes for the protection to come into force.
- The scheme is currently only available in Scotland.
- Your credit rating will be affected.
