What is a Debt Arrangement Scheme?
A Debt Arrangement Scheme (DAS) is only available to people who live in Scotland, it is a statutory debt management scheme and currently there isn’t a similar procedure for those who live in England, Wales and Northern Ireland.
Under the DAS you set up what is called a Debt Payment Programme (DPP), where essentially you reach an agreement with your creditors that you will pay an affordable amount into your DAS each month to what is called an approved payments distributor. The payments distributor will then deduct their agreed fees and the remaining balance is then paid on to your creditors each month. Basically it is a way of paying off your debts in full through affordable monthly payments and benefitting from the statutory protection which is not offered through simple debt management plans.
Under the DAS all charges and interest are frozen whilst you are making your agreed payments which are then waived once you have completed your DPP.
Please note that under DAS you will only be able to set up a DPP if you can repay all of your debts in what is deemed to be a reasonable amount of time. If it is going to take too long to repay your debts in full when considering the amount which you owe and what you can reasonably afford to pay each month then another solution such as a Trust Deed or Sequestration may be better suited to you (see our pages on PTDs and Sequestration for further info).
Who can benefit from a Debt Arrangement Scheme?
A DAS is available to all individuals, sole traders and people in partnerships, living in Scotland only, who are experiencing creditor pressure such as demands and threats of legal action.
You must have surplus income available each month after deducting your sensible living expenditure and you must be able to repay all of your debts in full from your DPP contributions within a reasonable amount of time.
If you are struggling to pay your debts and don’t have enough surplus money to keep all of your creditors happy, if your debts are causing you stress and you live in Scotland then a DAS could be for you.
How does a Debt Arrangement Scheme work?
An approved money adviser will review your personal financial position and what you can afford to pay into your DAS each month. Please note that you are unable to setup a DAS yourself, this must be handled through an approved money adviser. Once you have decided that a DAS is the right option for you, your approved money adviser will put together your individual DPP and contact all of your creditors on your behalf to seek their agreement to your DAS.
Your creditors then have twenty-one days to consider your DAS and, if they don’t respond within the time frame then they are deemed to have given their consent. If one or more of your creditors object then the Accountant in Bankruptcy will review your proposed DAS and, if it is fair and reasonable, the AIB can force your creditors to comply.
Once up and running you will pay the agreed monthly amount into your DAS through an approved payments distributer, they will then take their agreed fee and then pass on the remaining balance to your creditors each month.
You will have to pay money into your DAS until you have paid all of your creditors in full, there is no prospect of writing off any element of your debts through a DAS – unlike in PTDs or Sequestration.
Whilst you are in a DAS, your details will be held on the DAS register which can be accessed by anyone online. Also your DAS/DPP will remain on your credit rating for six years.
Interested? Get in touch today!
So, you are interested in a DAS and you think that it might be the right option for you.
Please note that we do not provide DAS as part of our service offering at DebtChampion. You can find further information on DAS by clicking on the link https://www.aib.gov.uk/debt-arrangement-scheme/.
At DebtChampion we are committed to ensuring that the right advice is always provided. If you are unsure whether a DAS is right for you or whether you may be better suited to another solution for dealing with your debts, if you use our Save Me request form, this will allow us to give you best advice, by phone at a convenient time for you.
Alternatively, you can give us a call on 0808 164 3750 (Freephone) and we will be happy to have a chat with you.