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Disdvantages of a Scottish Debt Arrangement Scheme (DAS)

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A debt arrangement scheme is a common agreement whereby Scottish residents in serious levels of debt can repay their creditors through consolidated monthly or weekly payments. The process duration depends on the amount of debt involved; it could take several years to repay.

It is a viable alternative to sequestration (bankruptcy) and has a number of benefits which we have touched upon in our specific DAS advantages guide.

However, it goes without saying that all debt management processes have their drawbacks; it’s often a case of having to one step backwards to ultimately move two steps forward. The debt arrangement scheme is no different and here we analyse the key disadvantages of a DAS which you should be aware of:

• Debts Not Written Off
In contrast to the other common formal insolvency procedures in Scotland such as trust deeds and sequestration, a debt arrangement scheme exists until your debts are fully repaid – meaning your debts will not be written off. It could take you months or years to be debt free, depending on the amount of debt you have.

• Credit Rating
It won’t come as any surprise but your credit rating may be affected – usually for six years. Public Notice
Your name will be published in the Debt Arrangement Scheme Register which is a public register. The reality is that few people will see it but if anyone does search for your name, they’ll be able to see you subject to a debt arrangement scheme.

• Longer Repayment Period
A debt arrangement scheme can last for several years if you have large debts and this period can be extended if you have to reduce the amount you pay to creditors each month.

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