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[HarryP]

What is a Debt Arrangement Scheme?

[Steve Jackson]

Hi Harry and welcome to the forum

A Debt Arrangement Scheme (or DAS) is part of Scottish insolvency law. It is a bit like a debt management plan but is regulated so that once in place, creditors are unable to take legal action against you or continue to add interest to your accounts.

In order to carry out a DSA, first a debt payment programme (basically a debt management plan) must be put together. An approved money advisor must then agree to send the programme to a DAS Administrator for approval. Once the administrator has approved the programme, as long as you stick to the agreed payments, all further interest, fees and charges on your debt are frozen and you are protected from any further creditor action. In fact, creditors are unable to take enforcement action against you from the moment that you indicate an intention to apply for a debt payment programme or have an application awaiting approval.

Unlike a protected Trust Deed, creditors do not have the opportunity to reject a DAS. However, there is no money written off your debt so you will still be expected to pay back 100% of what you owe.

[Hayden]

Hello Harry

I think a Debt Arrangement Scheme sounds like a good idea if you want to avoid some of the downsides of a Trust Deed. From what I have read these generally stem from having to release equity in a property. However, you do have to repay 100% of your debt if ou use a DAS. If you are a home owner and you decide on a Trust Deed, make sure you understand how any equity in your house will be dealt with by the Trustee and get it in writing before you sign up!!

[Amy Jellings]

I know this is a really old thread, but it's worth bringing to the fore again for a couple of reasons.

Unlike almost every other type of debt management solution, the number of debt arrangement schemes being set up is increasing at the moment.

There are more DAS approved money advisers available to the public than there were (typically at Citizens Advice or employed by Local Authorities) and the private sector has recently been allowed to join in and charge clients for setting up a debt arrangement scheme. Three trust deed providers now have DAS approved money advisers in their teams. As the scheme has "bedded in" this increased number of DAS advisers seem more confident about directing more people to this solution.

The debt arrangement scheme is esepcially suitable for persons that might have considered a trust deed but are worried about the risks of having to release equity from their home. It's also a valuable option for anyone who could afford to fully repay their debts in a reasonable period of time if only they could get a break from the high rates of interest they're being charged. Anyone resident in Scotland who is in a debt management plan, or who is considering one, should read more about the debt arrangement scheme and decide whether it might be a better option for them than their DMP.

A minor correction from a previous post on this topic. Creditors do have the ability to object to a debt arrangement scheme being established. There is a safeguard in place however as the DAS approved money adviser can reject creditor objections that they consider to be unreasonable.

[Steve Jackson]

Thanks for the update Kelly and quite rightly correcting my previous post. Creditors are indeed allowed to reject a DAS proposal but this could be overturned by the Accountant in Bankruptcy and the DAS implemented anyway. More information about DAS is given in the main Beat My Debt site: https://www.beatmydebt.com/debt-arrangement-scheme.htm

[Amy Jellings]

The DAS Approved Money Adviser has a role in dealing with creditor objections to a debt arrangement scheme as well Steve.