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 individuals repay their debts over a period of time and at a rate that they can afford.

Any individual 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. Individuals cannot apply if they are currently bankrupt or have signed a Trust Deed. Individuals who are subject to a bankruptcy restriction order or paying debts under a conjoined arrestment order are also restricted from applying.

What is a debt repayment programme?

If an individual is on a debt payment programme, instead of making lots of smaller payments to different lenders, they 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 an application for the debt payment programme is successful and the individual keeps up with their 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 individual 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

1. Once your repayment programme has been approved you will be protected from any legal action imposed by your Creditors.
2. 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.
3. Your home will not be affected by the DAS as long as you keep up with your mortgage repayments.
4. Monthly payments are based on what you can reasonably afford to pay.
5. If you are a sole trader and you have business debts these can also be included in the debt repayment programme.
6. Your Money Advisor will deal with all Creditors on your behalf.

Disadvantages

1. You may only make one application to the Debt Arrangement Scheme within any twelve month period.
2. The scheme will last until your debts are cleared – there is no fixed time period.
3. 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.
4. The scheme is currently only available in Scotland.
5. Your credit rating will be affected.