Debt Arrangement Schemes

Debt Arrangement Schemes, or DAS, were introduced by the Scottish government in 2004 to help Scottish residents and businesses pay off their unsecured debts. Once under a DAS, your debt repayments are based on what you what you can afford.

With a DAS, you will be assisted in setting up a debt payment programme, or DPP. Under a DPP, all your debts will be consolidated, and each month you make one payment that is distributed evenly to your creditors. Unlike a Trust Deed or Sequestration, a DAS will last until all your debt is repaid.

A DPP can last for a reasonable length of time based on the level of debt and how much you will be able to pay, with a max of 5 years for businesses.

Debts that can be paid off using a DAS includes debts to banks or local councils, credit card debt, utility bills and unpaid taxes. Student loan debt cannot be paid off using a DAS.

DAS can take 1-2 months to set up and come into effect, however, this can vary according to your personal circumstances.

How would this affect me?

Debt repayments under a DAS are calculated based on your disposable income. This means that all your living costs, rent, council tax and utility bills will not be included when working out how much you can afford to pay. This means you should always be able to cover your basic cost of living.

Unlike with bankruptcy, your creditors will not be able to repossess your home or car in order to cover your debts.

Once your DAS has been set up and agreed upon, it becomes ‘protected’. Once this happens, all charges and interest on your debt is frozen. This means your debt will not increase for the duration of the DAS.

Also, your creditors can no longer contact you in any way to collect your debt, or start any legal proceedings against you.

However, you will be put on a public register that records the details of those people participating in a Debt Arrangement Scheme.

What are the advantages of DAS?

  • Your monthly payments are calculated based only on your disposable income.
  • All interest and charges are frozen once the DAS becomes ‘protected’, so your debt will not increase.
  • Your money advisor acts as your representative and deals with your creditors for you.
  • If for any reason you have difficulty keeping up with your payment plan, you can apply for a “six-month payment holiday”.
  • There is a separate business DAS for private companies.
  • As long as you keep up your mortgage repayments your house will not be at risk.
  • Couples who a both liable for a debt can create a joint DPP - this includes civil partners and same sex couples.

What are the disadvantages of DAS?

  • Up to 10% of your monthly payment could be taken to cover the running costs.
  • Once in a DPP your details will be put into a publically accessible DAS register.
  • A DPP will have an impact on your credit rating.

Who is eligible for DAS?

To be eligible for DAS, you must:

  • Live in Scotland
  • Have contacted a DAS approved money advisor
  • Have a reasonable level of disposable income after covering living expense