The Debt Arrangement Scheme (DAS) is a debt payment plan introduced by the Scottish Government (then the Scottish Executive). A similar solution for people living in England, Wales and Northern Ireland is a debt management plan. This service is often free, however there are some money advisors who will charge for this.
A Debt Arrangement Scheme will allow you to pay your debts in a managed way, without the worry of your creditors pressurising you. A Debt Arrangement Scheme is available across Scotland.
A Debt Arrangement Scheme (DAS) offers you:
- Help and advice on managing debts
- To freeze interest, fees and charges on your debt, this will come into force from the date your DAS debt payment plan is accepted, as long as the DPP is adhered to.
- Protection from enforcement, bankruptcy and loss of your home (providing you pay your mortgage/rent)
- Should your circumstances change an aftercare service is provided
- Breathing space and have more time to pay back your debt
The debt solution is often free for people paying debts under an approved debt payment programme. However, you really need to check this with your chosen money adviser as they may charge you for their service, prior to entering into any agreement.
Under DAS, a single regular payment is made to an approved payment distributor. If you keep to the agreed payments, legally your creditors cannot carry out enforcement action against you.
Likewise, creditors are unable to take enforcement action against somebody who has noted their intention to apply for a debt payment programme or has an application awaiting approval for more information.
One of the benefits of the Debt Arrangement Scheme is it freezes interest, fees and charges on your debt from the date your DAS debt payment plan is accepted.
You would not be able to enter a DAS if you are any of the following:
- Entered into a Protected Trust Deed
- If you are subject to a bankruptcy restrictions order or undertaking
- You have incurred the debt by illegal or fraudulent means.
Five parties involved in DAS
Once you enter into the debt solution, there are five parties involved:
- The debtor: Person or persons with personal debts and has agreed to a debt payment programme (DPP) with a DAS approved money adviser.
- The DAS approved money adviser: Person who provides debt management advice to the debtor.
- The creditor: Companies who is owed money and has agreed to or is obliged to accept payments under a debt payment programme (DPP).
- The DAS administrator: Person who is responsible for maintaining the DAS register which contains details of debt payment programmes, the approval of money advisers and payments distributors, and the approval of a debt payment programme.
The Accountant In Bankruptcy is the DAS administrator. DAS is NOT a form of Bankruptcy.
- The payments distributor: Person who will distribute the sums of money received to creditors in accordance with the debt payment programme.
What is a debt payment programme (DPP)?
If you agree that a debt payment programme under DAS is the solution for you, your approved money advisor will ask for the creditors to agree to a DPP.
This agreement allows you to pay your debts over a longer period of time. The programme will be for any amount of money or for a reasonable length of time.
If all creditors agree or deemed to have agreed (as they have not responded) then the DPP under DAS is automatically accepted.
If the creditors object then the administrator can still approve the DPP if it is fair and reasonable to do so.
If there is any change in circumstances the programme can be altered to take account of this.
Advantages of DAS
- It is often free for people paying debts under an approved debt payment programme (DPP). However, not all are free and some money advisers will charge for this.
- It also protects you from execution of action that can be taken by your creditors and it will freeze interest, fees and charges on your debt, from the date of acceptance of a debt payment programme.
- Completing this debt solution successfully will show that you’ve learned valuable money management skills. You will be able to start afresh and make your financial future easier for you to manage.
DAS prevents court enforcement
Sometimes, due to unforeseen changes in people’s circumstances they are unable to meet their contractual obligations. If that happens, the courts may step in and, for example, order someone to pay for the goods they bought on credit.
However, inclusion in a DAS can prevent enforcement of debt by the courts. So if you keep to the agreed costs under the debt solution, your creditors cannot carry out enforcement action against you or make you bankrupt.
Likewise, creditors are not allowed to take enforcement action against you if you have noted an intention to apply for a debt payment programme or have an application awaiting for approval.
In Scotland, there are a number of ways that people can be made to pay by the courts. The most common forms of enforcement (known as diligence) are: arrestment, earnings arrestment and attachment.
Disadvantages Of DAS
- Your credit rating will be affected when entering a DAS and usually this will last for 6 years from the last default
- You may take longer to repay the full amount of debt owed
- You are only able to apply for limited credit while in a debt arrangement scheme
What is the criteria for DAS?
A DAS is only available for people living in Scotland. A debt advisor will be able to tell you if it is suitable for your specific situation. You can call one of these charities to find out more:
StepChange: 0800 138 1111
Debt Advice Foundation: 0800 043 40 50
Citizens Advice Bureau: 0808 223 1133
National Debtline: 0808 808 4000