What does the DAS Fair and Reasonable Test entail?
February 28, 2018
Debt payment programmes (DPPs) are an intrinsic part of the Debt Arrangement Scheme, which allows you to pay off unsecured debt at an affordable rate. If a debt payment programme is rejected by one or more creditors, the DAS Administrator can apply their discretion on whether to approve the plan, after using a test to decide whether it’s ‘fair and reasonable.’
Being able to apply the Fair and Reasonable Test helps you gain control over your finances, and avoid incurring further charges and interest that would worsen your situation. The Debt Arrangement Scheme is government backed, and is essentially intended to ease the financial burden when people fall into serious debt.
So what does the DAS Administrator consider when applying the test?
What is included in the Fair and Reasonable Test?
A number of different criteria are applied, including:
- The level of debt
- Proposed duration of the debt payment plan
- Amount of monthly repayment in comparison with the surplus income available
- Opinions of creditors, and the reasons why they’re objecting
- Views of the DAS approved money adviser
- Ratio of creditors consenting to those rejecting
- If any debt payment programme applications have been made in the past
If after applying the Fair and Reasonable Test the DAS Administrator supports the proposal, the DPP will be put through and you’re protected from legal action as long as you adhere to the conditions.
Should the plan be rejected after having used the test, however, you may need to review your options with the help of your money adviser. It might be possible to put forward a new DPP proposal, or to consider whether other debt solutions could help.
Protection from creditors prior to the Fair and Reasonable Test
Even before the Fair and Reasonable Test is applied, you may be protected from creditor legal action simply by informing the DAS Administrator that you’ve applied for a DPP. This is called ‘intimation,’ and it can offer protection from creditors for up to six weeks prior to the application being made.
It’s crucial to meet all the conditions of your DPP for its full term, however, as if the programme is revoked, creditors can backdate the additional interest and fees they would have charged.
There is some flexibility built in to a DPP should your circumstances change, and if this happens you should let your money adviser know. They can apply for a ‘variation’ to your debt management programme under some circumstances, but this must be approved by the DAS Administrator.
If you’re experiencing unmanageable debt, and would like to know more information on how a debt payment programme could help, call one of the expert team at Scotland Debt Solutions.
We’ll be able to advise you on all your options, and ensure you take the most suitable action. We offer same day meetings free-of-charge, and work from four offices around Scotland.
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