Debt Arrangement Scheme

The Debt Arrangement Scheme (DAS) is a debt management solution backed by the Scottish government. It helps Scottish residents set up Debt Payment Programmes (DPP) that allow for manageable repayments and legal protection from creditors, enabling people to regain control of their finances.

Debt Arrangement Scheme Explained

The Debt Arrangement Scheme is a debt management tool only available in Scotland. It lets you apply for a debt payment programme (DPP) which helps you repay your debts by making affordable monthly payments. 

A DAS allows individuals to consolidate their debts into a single monthly payment that is distributed to creditors. Managed by an approved DAS money adviser, this scheme freezes all interest, fees, and charges on debts which can reduce financial stress. The payments are based on what the individual can reasonably afford, while still leaving you enough money for household bills and living costs.

What is the DAS Register in Scotland?

The DAS Register is a publicly accessible database maintained by the Accountant in Bankruptcy (AiB). It lists all active DAS applications, ongoing DAS Debt Payment Programmes (DPPs), and individuals who have completed or revoked a DAS. Creditors and other interested parties can use the register to verify the status of a DAS.

What Kinds of Debt Can Be Included in a DAS?

Most types of unsecured debt can be included in a DAS, such as:

  • Credit card debt
  • Personal loans
  • Overdrafts
  • Store cards
  • Payday loans
  • Catalogue debts

However, some debts cannot be included, such as:

  • Secured debts
  • Court fines
  • Child maintenance arrears

Advantages & Disadvantages of a Debt Arrangement Scheme

Advantages:

  • Legal Protection: Creditors cannot take legal action against you once the DAS is approved.
  • Assets protected: Your home or your car will not be affected if you keep up with payments.
  • Interest and Charges Frozen: All interest, fees, and charges on included debts are frozen when the DAS is approved.
  • Single Monthly Payment: Simplifies debt management by consolidating multiple payments into one.
  • Affordable Payments: Payments are based on what you can afford, ensuring essential living costs are covered.

Disadvantages:

  • Impact on Credit Rating: A DAS will affect your credit rating and remain on your credit report for six years from the date of completion.
  • Public Record: Your participation in a DAS is recorded on a public register, which can be accessed by creditors and other parties.
  • Commitment Required: You must commit to making regular payments throughout the duration of the DAS.
  • Limited Debt Types: Not all types of debt can be included, such as secured loans and certain fines.

A DAS can be a valuable solution for individuals struggling with multiple debts, offering a structured and legally protected way to repay what they owe. 

How Does a Debt Arrangement Scheme (DAS) Work?

Step 1: Consult an Approved Money Adviser

The first step is to contact a DAS-approved money adviser. They will conduct a confidential review of your financial situation, including your income and expenses, to determine your disposable income and the monthly payment you can afford to make to your creditors.

Step 2: Setting Up a Debt Payment Programme (DPP)

If a DAS is the right solution for your situation, your money adviser will submit an application for a Debt Payment Programme (DPP) on your behalf, as individuals cannot apply directly. This process usually takes about six weeks. Your creditors will receive a proposal and have three weeks to respond. If they do not respond, their consent is assumed. If any creditors object, the DAS Administrator (the Accountant in Bankruptcy) will evaluate the application. If the AIB deems the application fair and reasonable, they can approve the DPP despite objections.

Step 3: Maintaining Monthly Payments

Once your DPP is approved, it will be listed on the DAS register. You will then make a single, affordable monthly payment to an approved Payments Distributor. During this time, all interest, fees, and charges on your debts will be frozen. Creditors will be prohibited from taking any recovery or legal action against you. According to regulations introduced in November 2019, there are no fees for setting up or maintaining your DAS.

How Long Does a DAS Stay on Your Credit File?

Using a DAS can affect your credit rating. Although the DAS itself is not recorded on your credit file, creditors can issue a default notice at any time during the arrangement. Your credit rating will be impacted for six years from the date of the default notice. This may make it difficult to obtain credit until the debt is cleared from your credit history.

 

This section on the Debt Arrangement Scheme (DAS) provides a comprehensive guide on how the scheme works, from initial contact with a money adviser to the completion of your Debt Payment Programme. For more personalised guidance please feel free to call us on .

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