May not be suitable in all circumstances. Fees apply. Your credit rating may be affected.
Free debt counselling, debt adjusting and providing of credit information services is available to customers by contacting MoneyHelper.
DAS (Debt Arrangement Scheme)
Alongside Trust Deeds and Sequestration, the Debt Arrangement Scheme (DAS Scotland) is one of 3 Scottish statutory debt solutions. Here’s all you need to know about DAS.
What is the Debt Arrangement Scheme?
The Debt Arrangement Scheme (DAS in Scotland) is a statutory debt management plan, introduced by the Scottish Government in 2004 to help individuals repay their debts in full.
If you need a helping hand to get out of debt, DAS could be a suitable option for you. Under DAS, you apply for a debt payment programme (DPP) that allows you to pay off your debts free from interest, fees and charges over an extended period of time, ensuring payments are affordable whilst giving you protection against legal action from your creditors and safeguarding your assets, like the family home.
The debt arrangement scheme in Scotland is a viable alternative to other forms of debt relief such as protected trust deeds or, minimal asset process or sequestration.
How does DAS work?
If you choose to enter into a DPP under DAS, the first steps involve your money adviser proposing the DPP to your creditors. A DPP under DAS is proposed to creditors in the following way:
- Proposals are sent to all known creditors giving them 21 days to accept or reject the proposal.
- If no creditors reject the proposal, then the DPP is approved automatically.
- If creditors reject the proposal and they are owed up to 10% of the total debt, then the DPP application will be automatically approved.
- If one or more creditors reject the proposal and they are owed more than 10% of the total debt, then the DPP can still be approved if the proposal is judged to be ‘fair and reasonable’ by the DAS Administrator (the Government agency responsible for DAS).
- If the DPP proposal is not approved, then you have a right of appeal, however, you may need to consider other solutions such as a protected trust deed or bankruptcy.
Following approval, it is possible that your circumstances may change whilst you are in your DPP, in which case the DPP may be varied to accommodate these changes. The steps involved include:
- Your Money Adviser will prepare an updated DPP proposal and present this to your creditors – the same 10% rule described above applies to a variation of a proposal and the DAS Administrator will apply a ‘fair and reasonable’ test, if required.
- If your proposed variation is not approved, then you have a right of appeal, however, you may need to look at other solutions such as a protected trust deed or bankruptcy.
If you experience financial difficulties during the period of your DPP, the following help is available to you:
- You could be granted a one-month payment break, to allow you to pay for an emergency expense – you can have 2 payment breaks in any 12-month rolling period.
- If you need a longer payment break as a result of, for example, illness or unemployment, or an unplanned increase in expenditure then this could be provided for a period of up to 6 months, this type of payment break can be applied for as many times as is required during your DPP provided you meet the necessary criteria.
How long will my DPP last?
- A DPP can last for any reasonable length of time (normally up to 10 years) under the terms of the debt arrangement scheme, depending on the level of debt and how much you can afford to pay.
Who can act as my Money Adviser for DAS?
- Only qualified Money Advisers can advise on and manage a DPP under DAS – a Money Adviser may be employed by a Citizens Advice Bureau, local authority or the Money Adviser can be an Insolvency Practitioner (or suitably qualified member of their staff)
- The Money Adviser at Harper McDermott is Thomas Fox and we have an experienced team working with him to ensure our clients receive the best possible level of customer service.
Is the Debt Arrangement Scheme suitable for me?
- The Debt Arrangement Scheme (DAS) may typically be suitable for you if you have money left over at the end of each month (after you’ve paid your normal outgoings such as food shopping, rent/mortgage and utility bills) and you can clear your debts in a reasonable amount of time.
- The easiest way to find out whether the debt arrangement scheme may be a suitable option for you is to get in touch with our DAS Scotland advice team.
- You can only apply for DAS if you live in Scotland.
DAS Scotland Qualification Criteria
To qualify for the Debt Arrangement Scheme you would typically:
- Have at least one debt.
- You have taken advice from a DAS approved Money Adviser, such as Harper McDermott
- You live in Scotland.
- You have surplus income to repay your debt(s) after paying for your general living expenses and household bills
- You are not in a trust deed or currently bankrupt
Couples who live together as spouses, civil partners of each other or are living together as if spouses of each other can apply for a joint DPP, even where they are not jointly liable for any debt(s).
Advantages & Disadvantages of the Debt Arrangement Scheme
DAS Advantages
- You make one, affordable payment to repay your debt(s)
- Your creditors cannot take legal action against you to recover the debts owed to them
- Any assets you own, including your home, are unaffected by DAS
- Interest, fees and charges are frozen from the date your application is made and are written off when your DPP is completed
- There are no fees to pay to apply for or have your DPP administered – see section on Fees for further info
- An earnings arrestment will be stopped on the approval of your DPP under DAS
- If your creditors reject your application, they can be forced to comply if the proposal is deemed to be ‘fair and reasonable’ by the DAS Administrator
- Mortgage, secured loan and rent arrears can be excluded from your DPP
- You do not have to pay your full disposable income into your DPP, a reduced amount can be offered to allow you more flexibility, subject to creditors approval
- Payment breaks are available if you experience a reduction in income, for example, due to illness or unemployment or an unplanned increase inexpenditure.
- If your circumstances change permanently, then your DPP can be varied to reflect these changes, without putting your DPP at risk
DAS Disadvantages
- In DAS there is no debt written off, only relief from further interest, fees and charges. Therefore, in DAS you are deemed to be repaying your debts in full and the repayment period is likely to be longer than the alternatives of a Protected Trust Deed or Sequestration
- Your credit rating may be adversely affected, in a similar way to Trust Deeds and Sequestration
- Your DPP may be rejected by creditors and deemed to be not ‘fair and reasonable’, meaning you may need to consider other options such as a Protected Trust Deed
- Your DPP will be registered on the DAS Register, a publicly available online register of all DPPs in Scotland
- If you do not comply with the conditions of your DPP then it may be revoked. Creditors are then free to pursue legal action against you and to add back their interest, fees and charges
Find out more
Contact our team at Harper McDermott to find out more about the Debt Arrangement Scheme and any of the other debt solutions available to you in Scotland.
Harper McDermott are here to help you decide the best course of action to suit your individual needs and support you every step of the way. If you would like a fresh start, get in touch today!
