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?
A number of different criteria are applied, including:
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.
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.
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Debts that will not form part of your Debt Payment Programme include: Some secured loans Student loans Court fines
Yes, this is one of the reasons why the Scottish government introduced the scheme. As long as payments set out in the Debt Payment Programme are met, creditors will not be able to make contact or take legal action against you. All correspondence is dealt with by your DAS Approved Advisor.
A DAS Approved Advisor reviews your income, assets and liabilities to make sure it is the right product for you. A Debt Payment Programme is then drawn up which takes into account your household expenses such as rent, food and utilities, and sets out how much you need to pay against your debts each month, and for how long. This ensures that your living expenses are covered, and that debts are consolidated into a single affordable payment.
There is no specified timescale for completion of a Debt Payment Programme, as each case is unique and depends on your financial situation. There is flexibility built into the scheme if your circumstances alter, however.
You have more time to pay off your debts Interest and fees are frozen once a Debt Payment Programme has been agreed Your creditors are not able to take any further legal action Debts are consolidated into a single payment that you know is affordable because your financial situation has already been reviewed by a professional money advisor Escalating debts are halted, providing some relief from stress You can avoid full insolvency as you will still be paying your debts in full
The Debt Arrangement Scheme, like any debt management product, may affect your credit rating. If you enter into a DAS then your details will be recorded on the DAS register. This is a register which can be accessed free of charge. Creditors and credit reference agencies check this register on a regular basis and may update your credit file to reflect this information. While you have a Debt Payment Programme under DAS, you will not normally be able to access additional credit. There are exemptions to this which your money adviser can further explain.
Our Scottish based team can help advise you on your debt problems.
If you’re a Scottish resident struggling with personal debts, there are a number of solutions available to you that can appease your creditors and put you on the path to financial recovery.