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 five offices around Scotland.
Your personal credit score plays an important part in securing new loans and credit, and can affect your financial life for better or worse. Lenders use the information in your credit file to determine whether you present a high risk of default, and if your credit score is low, you may find it difficult to […]
Credit unions offer a range of financial products including current accounts, savings accounts, and loans, and can be a good alternative to banks and building societies whilst also helping your cash flow. There are credit unions all around the UK, almost 100 of them operating in Scotland. They’re not always widely advertised, however, and although […]
It’s a worrying situation when you realise your outgoings exceed your income, and it can be difficult to prevent debt in this situation, but there are solid steps you can take to get back on track – you just need to act quickly. Increasing your income or reducing the money going out are essentially what […]
If you’ve lost your job, state benefits and tax credits can provide vital financial support to see you through this tough time and help you avoid taking on too much debt while you look for more work. As far as your old employment is concerned, it’s important that you check your final wage slip to […]
If you are a Scottish resident in financial difficulty, you may have entered into a Trust Deed in order to restructure debt repayments to creditors. A Trust Deed is a fixed voluntary agreement made between the debtor and creditor, with the help of a trustee. Debt is broken down into smaller, affordable instalments, typically lasting […]
A Debt Arrangement Scheme (DAS) is a government backed scheme which allows you to repay debt through contractual, monthly instalments without the threat of legal action and incurring penalties or interest. The scheme was established in 2004 for Scottish residents in debt, providing an alternative solution to sequestration, the Scottish equivalent of bankruptcy. A Debt […]