What is a Debt Arrangement Scheme?
A Debt Arrangement Scheme (DAS) is an initiative established by the Scottish government in 2004 to help the thousands of people across the country struggling to repay their debts (a Debt Management Plan (DMP) is similar and available in the rest of the UK). It is not the same as becoming insolvent through entering a Trust Deed or declaring bankruptcy.
It involves agreeing to a Debt Payment Programme (DPP), a series of payments to your creditors based on what you can afford according to your disposable income. This programme goes on until you repay your debts in full. All interest and additional fees are frozen for the duration, offering significant relief by stopping your unmanageable debt from continuing to rise. Creditors are also not allowed to get in contact with you for the duration or take any form of legal action against you.
A DAS is a fantastic method of getting out of debt if you have a regular income and can realistically pay your debts. They can put a stop to the pressure of increasing debts and allow you to take back control.
Are You Eligible for a Debt Arrangement Scheme?
To qualify for a DAS, you must live in Scotland. You must have a debt, or debts, that you can realistically pay off with the income that remains after accounting for your normal living costs. The amount of money you owe doesn’t matter as long as you can pay it back in a reasonable amount of time. Also, most types of unsecured debts will be included apart from court fines and child support. Mortgage and secured loan arrears can be included, but ongoing mortgage and secured loan payments cannot.
It is worth noting that you cannot be bankrupt or be in the process of fulfilling a Trust Deed.
How Do I Set up a DAS?
If you do end up organising a Debt Payment Programme (DPP), you must have first had counsel from an approved money advisor. Only a money advisor can make the application for you. It may be the case that a DAS is not the best option for you and something like a Trust Deed may be better suited. If you do end up in a DPP, the steps are as follows: