What Is a Debt Arrangement Scheme?
If you are struggling with debt and you happen to live in Scotland, one option which may be open to you is a Debt Arrangement Scheme, or DAS.
You will often hear debt advisers refer to a “debt payment programme” (DPP) in association with a DAS. The two terms are not interchangeable; a DPP is a tool which is included as part of your DAS. With a DPP, you can combine all of your ongoing debts into a single monthly payment.
DAS is a Chance for a Fresh Beginning
A Debt Arrangement Scheme is a formal debt restructuring plan, which means that it is a binding legal agreement between you and your creditors. There is no set timeframe for a DAS; the arrangement will last for as long as needed for you to repay your debts up to a limit of 10 years.
While a Debt Arrangement Scheme is in effect, you can expect the following changes in your life:
- You will pay only what you can afford toward your debts each month.
- You will be protected against action from your creditors.
- Any interest or penalties being applied to your account will freeze.
In short, the goal of a DAS is for you to catch up on what you owe—but within a framework where you can actually afford it. You will be guaranteed a reasonable standard of living, and you no longer need to worry about your debts continuing to mount in the backdrop while you struggle to catch up. The amount of money you owe will be finite and capped.
How a DAS Works
In order to set up a DAS, you will need to set up an appointment with an Approved Money Adviser. This is an adviser who has received specialised DAS training and is able to advise if the Debt Arrangement Scheme is the right solution for you.
You can discuss your financial situation with your adviser and provide paperwork which proves your income and expenses. Together you and the adviser will decide whether a Debt Arrangement Scheme is the best course of action given the specifics of your situation.
If you decide that a DAS is the right choice, a proposal will be drafted by the adviser on your behalf and submitted to your creditors. They will be given 21 days to review the proposal and accept or reject it. If they accept it, the proposal will receive approval from the DAS Administrator. Even if they reject it, the Administrator may still choose to approve it on your behalf.
Once that happens, the Debt Arrangement Scheme will go into effect and you will be able to begin making your affordable monthly lump sum payments. These payments will be sent to a single distributor, who will allocate the money amongst your creditors.
Benefits of a DAS include:
- Numerous types of debt may be included in a DAS. While these generally do not include secured forms of debt such as a mortgage, most forms of unsecured debt are acceptable: Credit card debt, store card debt, bank loans, overdraft fees, council tax arrears, utility arrears, and more.
- Your creditors can no longer harass you, and they cannot take you to court.
- You can get back to enjoying a reasonable standard of living. You can keep up with your current payments instead of drifting further and further behind.
- This is a flexible plan. If your income drops by more than 50%, you can apply for a temporary payment holiday for a period of up to six months. You can use a Debt Arrangement Scheme whether you owe money to one creditor or a number of lenders.
- Since penalties and interest are frozen, you do not need to worry about your debt mounting faster than you can pay it. You only need to pay a set, finite amount.
- In some cases, your creditors may decide to let you off the hook for some amount of debt. If they release you from the process before all the debt is paid, the remainder will be forgiven.
- Regardless of how your DAS ends, once the process is complete, you will be debt-free.
Drawbacks of a DAS include:
- A Debt Arrangement Scheme is only available to residents of Scotland. If you live in England, Wales or Ireland, you will not be able to get one.
- There will usually be a fee you will need to pay in order to set up your DAS.
- In order to qualify for and benefit from a Debt Arrangement Scheme, you must have enough income to pay your regular bills plus some left over to put toward your debts each month.
- Your information will be recorded in the public DAS register. Note, however, this is not the same as the information being publicised. Someone would have to be searching for data on you specifically in the DAS register in order to pull up your name. After the Debt Arrangement Scheme is complete, your name will be removed from the register.
- A Debt Arrangement Scheme does not have a set, capped timeframe. Many debt solutions available in the UK only last for five to six years, after which your remaining debts are expunged. With a DAS, you will continue to make payments on your debts until they are paid off in the majority of cases.
- Your Credit Rating will be affected.
If you believe that you would benefit from a Debt Arrangement Scheme, you can take the first step by getting in contact with a DAS Approved Money Adviser like DebtArrangementScheme.com – The DAS Experts.