Rules relating to Debt Arrangement Schemes (DAS) have been relaxed in ways that should provide extra breathing space for Scots whose finances have been adversely affected by the Covid pandemic.
DAS are designed to give people struggling to pay their debts on time a framework through which they can make repayments to their creditors over a pre-agreed period.
However, the pandemic has blown many Scots off course as far as their finances are concerned and for some it has become impossible to keep up with repayments they’d planned to make through their DAS.
As a result, and to give support to people in that position through no fault of their own, the Accountant in Bankruptcy (AiB) in Scotland has introduced policies that mean added flexibility can be accessed by debtors in the context of their repayment arrangements.
The new terms associated with DAS are being referred to by the AiB ‘low and grow’ payment plans, with the key feature being that debtors can, for a temporary period, make only very small or even token repayments to their creditors without jeopardising their agreements.
Expectations are that people who benefit from this extra flexibility while the Covid-19 pandemic goes on will be able to increase the scale of their repayments once their circumstances have improved.
The pandemic is known to have had a hugely damaging impact on the finances of millions of households across Scotland and the UK, with many thousands of people having lost their jobs in recent months.
Debt advisors have been among those calling for action to be taken by the Scottish and UK governments to support people whose incomes have been a reduced or lost and whose debts have been worsening since the pandemic began.
Many of the same organisations have welcomed the decision taken by the AiB and the Scottish government to introduce more flexibility into the structure of DAS.
“We’re delighted to see the government acting on the input sought from the debt advice sector,” said Emma Jackson, national director of Christians Against Poverty.
“We know people may be feeling overwhelmed by the challenges of lockdown, juggling childcare, homeschooling, caring for elderly relatives, reduced income and many are dealing with debts. We want to urge people to seek debt help now.”
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