DAS – FeedomDebtAdvice

What is a Debt Arrangement Scheme?

The Debt Arrangement Scheme (DAS) is a debt management program available in Scotland that provides an alternative to formal insolvency options, such as bankruptcy or sequestration. It is a government-backed scheme that is designed to help individuals who are struggling with unmanageable debt.

Under the DAS, individuals can apply for a debt payment programme (DPP) that allows them to repay their debts over a longer period of time, usually up to 10 years. The DPP is based on the person’s income and expenses and is designed to be affordable, which means that individuals can repay their debts at a pace that is sustainable for them.

When a DPP is established, all interest, fees, and charges on the person’s debts are frozen, and creditors cannot take any legal action against them. This provides a level of protection and stability for the individual while also allowing them to repay their debts in a way that is manageable for them.

To qualify for the DAS, an individual must meet certain criteria, such as being a Scottish resident, having more than one debt, and having enough income to make regular payments towards their debts. They must also have sought advice from a DAS-approved money advisor, who will assess their financial situation and determine if the DAS is the best option for them.

Overall, the DAS can be a useful tool for individuals struggling with debt in Scotland. It provides a structured and affordable way to repay debts over time, while also providing legal protections and peace of mind. However, it is important to note that entering into a DPP will have an impact on an individual’s credit rating, and it may not be the best solution for everyone.

Debt Arrangement Scheme (DAS) :

The Debt Arrangement Scheme (DAS) is a government-backed debt management program available in Scotland. It was introduced in 2004 to provide an alternative to bankruptcy and other formal debt solutions for Scottish residents struggling with unmanageable debt.

Under the DAS, individuals can apply for a debt payment programme (DPP) that allows them to repay their debts over an extended period of time, usually up to 10 years. The DPP is designed to be affordable, based on the person’s income and expenses, and is administered by a DAS-approved money advisor.

Once a DPP is established, all interest, fees, and charges on the person’s debts are frozen, and creditors cannot take legal action against them. This provides a level of protection and stability for the individual, while also allowing them to repay their debts at a pace that is sustainable for them.

What is a Debt Arrangement Scheme?

Who is a Debt Arrangement Scheme designed to help?

The Debt Arrangement Scheme (DAS) is designed to help Scottish residents who are struggling with unmanageable debt. Specifically, it is intended for individuals who have multiple debts and are finding it difficult to make repayments, but who have a regular income and want to avoid formal insolvency options such as bankruptcy.

The DAS can be a useful tool for individuals who are experiencing financial difficulties due to a variety of reasons, such as a decrease in income, a change in personal circumstances, or unexpected expenses. It is designed to provide a structured and affordable way for these individuals to repay their debts over a longer period of time, usually up to 10 years.

To qualify for the DAS, an individual must meet certain eligibility criteria, such as being a Scottish resident, having more than one debt, and having enough income to make regular payments towards their debts. They must also have sought advice from a DAS-approved money advisor, who will assess their financial situation and determine if the DAS is the best option for them.

Overall, the DAS is designed to provide individuals with a viable alternative to formal insolvency options, allowing them to repay their debts over a longer period of time and avoid the negative consequences of bankruptcy or sequestration.

What are the advantages of the Debt Arrangement Scheme?

The Debt Arrangement Scheme (DAS) has several advantages for Scottish residents struggling with unmanageable debt. Here are some of the key benefits of the DAS:

Affordable repayments: The DAS allows individuals to make affordable repayments based on their income and expenses. This means that the repayments are designed to be manageable, and individuals can pay back their debts over a longer period of time, usually up to 10 years.
Protection from legal action: When a DPP is established, all interest, fees, and charges on the person’s debts are frozen, and creditors cannot take any legal action against them. This provides a level of protection and stability for the individual while they work to repay their debts.
One payment per month: With the DAS, individuals make a single payment per month to the payment distributor, who then distributes the funds to their creditors. This simplifies the debt repayment process and makes it easier to manage.
No asset sale: Unlike with formal insolvency options like sequestration, individuals do not need to sell any assets to repay their debts under the DAS.
Flexibility: The DAS is flexible and can be adapted to suit the individual’s changing financial circumstances. If their income or expenses change, for example, the payment plan can be adjusted to reflect these changes.

What are the disadvantages of a Debt Arrangement Scheme?

While the Debt Arrangement Scheme (DAS) can be a useful tool for individuals struggling with unmanageable debt, there are also some potential disadvantages to consider. Here are some of the key drawbacks of the DAS:

Impact on credit rating: Entering into a DPP will have an impact on an individual’s credit rating. This can make it more difficult to obtain credit in the future, and may also affect their ability to rent a property or secure a mortgage.
Longer repayment period: While the DAS allows individuals to repay their debts over a longer period of time, usually up to 10 years, this also means that the total amount repaid will be higher due to the additional interest and charges.
Limited debt types: The DAS is only available for unsecured debts, such as credit card debt, personal loans, and overdrafts. It cannot be used to repay secured debts, such as a mortgage or car loan.
No guarantee of acceptance: While the DAS is a government-backed scheme, there is no guarantee that an individual’s application for a DPP will be accepted. They must meet certain eligibility criteria, and the decision to approve a DPP is ultimately up to the creditors.
Potentially high fees: The payment distributor that administers the DPP may charge fees for their services, which can be added to the overall amount repaid by the individual.

Overall, the DAS can be a useful option for individuals struggling with unmanageable debt, but it is important to carefully consider the potential drawbacks and seek professional advice before making a decision.

Who is eligible for a Debt Arrangement Scheme (DAS)?

To be eligible for a Debt Arrangement Scheme (DAS) in Scotland, an individual must meet certain criteria. Here are the key eligibility requirements for the DAS:

Scottish resident: The individual must be resident in Scotland to apply for the DAS.
Multiple debts: The individual must have two or more debts to different creditors.
Affordability: The individual must be able to make regular payments towards their debts, based on their income and expenses.
DAS-approved money advisor: The individual must have sought advice from a DAS-approved money advisor, who will assess their financial situation and determine if the DAS is the best option for them.
Not bankrupt: The individual must not have been made bankrupt or have entered into a protected trust deed in the past 12 months.
Not subject to a debt arrangement scheme: The individual must not be currently subject to a debt arrangement scheme or a debt management plan.
Not subject to sequestration proceedings: The individual must not be subject to sequestration (bankruptcy) proceedings.

Overall, the DAS is designed for individuals who are struggling with unmanageable debt, but who have a regular income and want to avoid formal insolvency options such as bankruptcy. If an individual meets the eligibility criteria and the DAS is deemed suitable for their circumstances, they can apply for a Debt Payment Programme (DPP) under the DAS.

Who is not eligible to join DAS?

While the Debt Arrangement Scheme (DAS) in Scotland is designed to help individuals struggling with unmanageable debt, there are some circumstances where an individual may not be eligible to join the scheme. Here are some examples of situations where an individual may not be able to join the DAS:

Not a Scottish resident: To apply for the DAS, an individual must be resident in Scotland. If they are not a Scottish resident, they will not be eligible to join the scheme.
Not able to afford repayments: While the DAS is designed to provide affordable repayments, if an individual is not able to make any repayments towards their debts, they may not be eligible to join the DAS.
Already subject to formal insolvency proceedings: If an individual has already entered into formal insolvency proceedings, such as sequestration (bankruptcy) or a protected trust deed, they will not be eligible to join the DAS.
Already subject to a debt payment programme: If an individual is already subject to a debt payment programme or a debt management plan, they may not be eligible to join the DAS.
Already subject to a debt arrangement scheme: If an individual is already subject to a debt arrangement scheme, they will not be eligible to join the DAS.
Intentionally incurred debts: If an individual has intentionally incurred debts that they knew they would not be able to repay, they may not be eligible to join the DAS.

Overall, the eligibility criteria for the DAS are designed to ensure that the scheme is used appropriately and that individuals who can benefit from it are able to do so. If an individual is unsure about their eligibility for the DAS, they should seek advice from a DAS-approved money advisor.

What types of debts can be included in a DAS?

The Debt Arrangement Scheme (DAS) in Scotland is designed to help individuals struggling with unmanageable debt. Here are the types of debts that can be included in a DAS:

Unsecured debts: The DAS can be used to repay unsecured debts, such as credit card debt, personal loans, store cards, and payday loans. Unsecured debts are debts that are not secured against an asset, such as a home or car.
Arrears: The DAS can also be used to repay arrears on unsecured debts, such as missed payments on credit card debt or personal loans.
Council tax arrears: The DAS can be used to repay council tax arrears.
Overdrafts: The DAS can be used to repay overdrafts, as long as the overdraft is not secured against an asset.
Charge cards: The DAS can be used to repay charge cards, such as American Express.

It is important to note that secured debts, such as a mortgage or car loan, cannot be included in a DAS. Additionally, certain types of debts, such as fines or student loans, are not eligible for inclusion in a DAS. It is important to seek advice from a DAS-approved money advisor to determine which debts can be included in a DAS.

Which debts can't be included in a Debt Arrangement Scheme (DAS)?

While the Debt Arrangement Scheme (DAS) in Scotland is designed to help individuals struggling with unmanageable debt, not all types of debt can be included in a DAS. Here are some examples of debts that cannot be included in a DAS:

Secured debts: Secured debts are debts that are secured against an asset, such as a mortgage or car loan. These types of debts cannot be included in a DAS.
Court fines: Debts that are owed to the court, such as fines, cannot be included in a DAS.
Child maintenance payments: Child maintenance payments cannot be included in a DAS.
Hire purchase agreements: Hire purchase agreements, which allow an individual to pay for goods over time, cannot be included in a DAS.
Student loans: Student loans are not eligible for inclusion in a DAS.
Debts incurred after the DPP is approved: Any debts incurred after the Debt Payment Programme (DPP) is approved cannot be included in a DAS.

Overall, it is important to seek advice from a DAS-approved money advisor to determine which debts can and cannot be included in a DAS. While the DAS can provide a helpful way to manage unmanageable debt, it may not be the best option for everyone, depending on their specific financial circumstances.

What happens after my Debt Payment Programme application is submitted?

After you submit your Debt Payment Programme (DPP) application under the Debt Arrangement Scheme (DAS) in Scotland, the DAS Administrator will review your application and determine whether your proposed DPP is reasonable and affordable. Here’s what happens after your DPP application is submitted:

Review by the DAS Administrator: The DAS Administrator will review your DPP application and supporting documents to determine if it meets the requirements of the DAS regulations.
Notification to creditors: If the DAS Administrator accepts your DPP application, they will notify your creditors of the proposed DPP, and provide them with a copy of your application and a statement of your debts.
Objection period: Your creditors have 21 days to object to your proposed DPP. If your creditors do not object within this timeframe, your DPP will be considered approved.
Objection by creditors: If your creditors object to your DPP, the DAS Administrator will consider their objections and decide whether to approve or reject the DPP.
Approval or rejection of DPP: If your DPP is approved, you will need to make regular payments as outlined in your proposal. If your DPP is rejected, you will need to work with your money advisor to revise your proposal and resubmit it to the DAS Administrator.
Distribution of payments: If your DPP is approved, the DAS Administrator will distribute the payments you make according to the terms of your DPP. They will deduct an administration fee from your payments before distributing them to your creditors.
Completion of DPP: Once you have made all the payments required by your DPP, your debts will be considered fully repaid, and your DPP will be completed.

Throughout the DPP process, it is important to continue making payments as required and to communicate with your DAS-approved money advisor if you experience any changes in your financial situation.

Can I appeal a rejected Debt Arrangement Scheme Application?

Yes, if your Debt Payment Programme (DPP) application under the Debt Arrangement Scheme (DAS) in Scotland is rejected by the DAS Administrator, you have the right to appeal the decision. Here’s how you can appeal a rejected DPP application:

Review the reasons for the rejection: The first step is to carefully review the reasons why your DPP application was rejected. This will help you understand the areas where your application fell short and what you need to address in your appeal.
Contact your DAS-approved money advisor: Your DAS-approved money advisor can help you understand the reasons for the rejection and assist you in preparing your appeal.
Submit an appeal: To appeal a rejected DPP application, you will need to complete an appeal form and submit it to the DAS Administrator within 21 days of receiving the rejection notice.
Provide additional information: In your appeal, you should provide additional information or evidence to address the reasons for the rejection. This could include updated financial information, changes in your circumstances, or other documentation to support your application.
Review by the DAS Administrator: The DAS Administrator will review your appeal and any additional information provided. They may request further information or clarification if needed.
Appeal decision: The DAS Administrator will issue a decision on your appeal within 21 days of receiving it. If your appeal is successful, your DPP application will be reconsidered. If your appeal is unsuccessful, you may be able to appeal the decision further to the sheriff court.

It is important to note that while you have the right to appeal a rejected DPP application, it is generally best to work closely with your DAS-approved money advisor to ensure that your initial DPP application is as complete and accurate as possible to minimize the likelihood of rejection.

When do I make my first payment after my Debt Payment Programme is Approved?

After your Debt Payment Programme (DPP) is approved under the Debt Arrangement Scheme (DAS) in Scotland, your first payment is due one calendar month from the date of approval. For example, if your DPP is approved on May 15, your first payment will be due on June 15.

It is important to make your first payment on time to avoid any potential issues with your DPP. If you are unable to make your first payment on time, you should contact your DAS-approved money advisor as soon as possible to discuss your options.

After your first payment, you will be required to make regular payments according to the schedule outlined in your DPP proposal. These payments will be distributed by the DAS Administrator to your creditors according to the terms of your DPP.

Throughout the DPP process, it is important to communicate with your DAS-approved money advisor if you experience any changes in your financial situation or if you have difficulty making your payments. Your money advisor can work with you to revise your DPP if necessary or provide support and advice to help you manage your debts.

Will I be charged a fee to join a Debt Arrangement Scheme (DAS)?

Yes, there are fees associated with joining the Debt Arrangement Scheme (DAS) in Scotland. However, these fees are relatively small and are designed to be affordable for individuals who are struggling with debt.

Here are the fees associated with DAS:

Application fee: To apply for a Debt Payment Programme (DPP) under DAS, you will be required to pay an application fee of £90. This fee is payable to the DAS Administrator and covers the cost of administering your application.
Payment distribution fee: The DAS Administrator charges a payment distribution fee of 2.5% on each payment made through your DPP. For example, if you make a payment of £100 to your DPP, the payment distribution fee will be £2.50. This fee covers the cost of distributing your payments to your creditors.
Money advisor fee: If you work with a DAS-approved money advisor to prepare your DPP application and manage your DPP, you may be charged a fee for their services. However, these fees are typically modest and will vary depending on the advisor.

It is important to note that the fees associated with DAS are designed to be affordable and are often much lower than the fees associated with other debt solutions, such as insolvency. Additionally, the fees can be incorporated into your DPP, so you don’t need to pay them upfront. If you have questions about the fees associated with DAS, you should contact your DAS-approved money advisor or the DAS Administrator for more information.

Can I pay off my debt payment programme (DPP) early?

Yes, you can pay off your Debt Payment Programme (DPP) early if you are able to do so. There are no penalties for paying off your DPP early under the Debt Arrangement Scheme (DAS) in Scotland.

If you are able to pay off your DPP early, you should contact your DAS-approved money advisor to discuss the process. Your money advisor will be able to provide guidance on how to make a final payment and ensure that the funds are distributed to your creditors appropriately.

It is important to note that paying off your DPP early may not always be the best option, depending on your financial situation. For example, if paying off your DPP early would leave you without sufficient funds to cover your living expenses or other essential payments, it may not be the best course of action. It is always a good idea to discuss your options with your DAS-approved money advisor before making any significant financial decisions.

What if I fail to pay my Debt Arrangement Scheme monthly payments?

If you fail to make your monthly payments under the Debt Arrangement Scheme (DAS) in Scotland, there may be consequences. Here’s what you need to know:

Arrears: If you miss a payment, you will be considered in arrears. Your DAS-approved money advisor will contact you to discuss the missed payment and explore options for bringing your account up to date.
Breach: If you fail to make payments for two or more consecutive months, your DPP may be considered in breach. Your DAS-approved money advisor will notify you in writing if this is the case. You will have 14 days from the date of the breach notice to rectify the situation by making all outstanding payments.
Termination: If you fail to rectify a breach, your DPP may be terminated. This means that your creditors will be able to pursue legal action against you for the outstanding debt.

It is important to note that your DAS-approved money advisor will work with you to avoid breaches and terminations whenever possible. If you are having difficulty making your monthly payments, you should contact your advisor as soon as possible to discuss your options. Your advisor may be able to revise your DPP to make it more manageable or provide other support and advice to help you stay on track with your payments.

Ultimately, it is important to make every effort to keep up with your monthly payments under DAS to avoid any potential consequences.

How long does a Debt Arrangement Scheme last?

The length of a Debt Arrangement Scheme (DAS) in Scotland can vary depending on the amount of debt you owe and the amount you can realistically pay each month. However, a DAS typically lasts between 3 and 10 years.

During the application process, your DAS-approved money advisor will work with you to create a Debt Payment Programme (DPP) that is tailored to your financial circumstances. This will include determining how much you can realistically afford to pay each month toward your debts.

Once your DPP is approved, you will make monthly payments to the DAS Administrator, who will distribute the funds to your creditors. As long as you continue to make your monthly payments on time, your DAS will remain in effect until all debts covered by the DPP are paid in full.

If your financial situation changes, you can apply to revise your DPP to make it more manageable. However, any changes to the DPP must be approved by the DAS Administrator and your creditors.

It is important to note that a DAS will remain on your credit file for six years from the date it is approved. This means that it may affect your ability to obtain credit during that time.

Will the Debt Arrangement Scheme Affect my Credit Score?

Yes, participating in the Debt Arrangement Scheme (DAS) in Scotland will likely have an impact on your credit score. When you enter into a DAS, your details will be added to the DAS Register, which is a public register of individuals who have entered into a DAS.

The fact that you are on the DAS Register may make it more difficult for you to obtain credit in the future, as potential lenders may view you as a higher risk borrower. In addition, missed or late payments under the DAS may also negatively affect your credit score.

However, it is important to note that participating in a DAS can also have some positive effects on your credit score. By entering into a DAS, you are taking steps to address your debt and become more financially stable, which may be viewed positively by potential lenders in the future.

Overall, while entering into a DAS may have some short-term negative effects on your credit score, it is important to focus on the long-term benefits of becoming debt-free and financially stable. If you are considering a DAS, it is important to speak with a DAS-approved money advisor to fully understand the potential impact on your credit score and other aspects of your financial situation.