How does the Debt Arrangement Scheme work?

February 8, 2013

Are you struggling to repay your debts in the time allowed, despite having disposable income after paying living expenses? If so, you could qualify for the Debt Arrangement Scheme.

The Scottish Debt Arrangement Scheme (DAS) was introduced by the Scottish Government in 2004, in attempt to help people in Scotland who may be struggling to pay off affordable debts whilst also disabling creditors from attempting to recover them, keeping your assets safe. So if you’re able to pay off the money you owe, but simply need a longer time to do it, one of our experienced advisers could help get you on the right track.

Once you put in your application, you have protection from any legal action for six weeks whilst your application is processed. If you’re successful and accepted into the DAS, you will continue to be safe from legal action or bankruptcy until the entire debt is repaid, as long as you don’t default on your payments.

However, if you can’t keep up with the payments, your DAS will be cancelled and any interest that may have been frozen during your involvement with the scheme could be added onto your debt, so it’s important that you ensure all payments are made on time.

This may all seem daunting, especially at a time when you’re already stressed about payments. This is why the DAS requires you to discuss your situation with a qualified money adviser first, who can work with you to organise a Debt Payment Program (DPP).

This payment plan essentially works out how much you can afford to pay towards your monthly payments, and determines how long it will take. If you’ve been struggling to imagine a time when you’ll ever be debt free, a DPP which has been clearly discussed with an experienced adviser, could provide you with the hope you need to get you feeling positive about the future again.

There are a few standard conditions you must follow in order to comply with the DAS scheme.

  • All payment must be made on time
  • Any documentation requested by your money adviser must be supplied
  • You must not apply for more credit than allowed under your payment plan
  • Your designated money adviser must be made aware of any changes to your circumstances e.g. divorce or unemployment

Whilst the conditions above are all fairly realistic, dependant on your individual circumstances, the Debt Arrangement Scheme administrator can also implement discretionary conditions, which must also be followed. All of the terms and conditions of the DAS scheme can be easily discussed with a qualified expert.

So if you’re struggling with debt repayments and need honest, impartial advice on arranging a solution that’s practical for you, call us today and speak with one of our experienced team who can advise you on the next steps to making your financial situation more manageable.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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