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Debt Arrangement Scheme (DAS)

A DAS (Debt Arrangement Scheme) is a Scottish solution to help you become debt free. Due to the legal criteria, only people who have resided in Scotland for the last six months are eligible to enter this solution. If you live in England, Wales or Northern Ireland then the equivalent solution would be the debt management plan.

What Is a Debt Arrangement Scheme?

Many people enter a Debt Management Plan in Scotland when the correct advice is a DAS. Unlike the debt management plan, a DAS does guarantee to freeze all interest and charges, which means you will know exactly when the debt solution will finish, as long as you maintain your monthly payments and don’t accrue further debt.

A DAS is a formal debt solution because it protects you from your creditors whilst enabling you to make one monthly payment towards the debt each month.

To be suitable for a DAS  you must be able to repay the debt in full within a reasonable period of time. Your debt should be over £4,000 if it is not as high as this then we would recommend you negotiate with creditors yourself.

Your property will be protected as long as you maintain your repayments to the debt arrangement scheme. At the same time, if you have a mortgage property (or own a property outright) then it is protected from action against the creditors as long as you maintain your repayments and the DAS is accepted by creditors.

If your creditors reject your DAS application then you can ask the Accountant in Bankruptcy to apply a “fair and reasonable” test. If the AiB agree that your application for DAS is satisfactory then they can overturn the decision by your creditors and award the DAS. Your creditors would then be bound by the terms of the debt arrangement scheme.

Who Can Arrange a Free DAS?

There are many organisation capable of organising a debt arrangement scheme. Some organisations will also charge, but we can point you towards an organisation providing free advice. Fee charging options vary from a one time setup fee through to a monthly payment plan.

The Scottish Government has been promoting DAS to make sure people are aware that the debt solution exists. The DAS is perfect for people who want to repay all of their debt but feel unable to do so because of interest and charges.

If you are unable to repay the debt within a reasonable time then you should look at other debt solutions. Depending on your financial situation, a trust deed in Scotland could enable you to become debt free quicker. However, if you have equity in your property then this would be considered.

Like all debt solutions, a debt arrangement scheme will affect your credit rating meaning getting credit in the future will be difficult.

Quick Guide: Debt Arrangement Scheme

What’s the solution: A DAS is a Scotland only, formal debt solution which protects you from your creditors. You make a proposal to your creditors and they decide whether they wish to accept or reject the plan.

What are the benefits:

  • Your house is protected while you repay your debt. This means your creditors can’t take action against your property to reclaim the money they are owed.
  • You pay an affordable amount each month until all of the debt is repaid.
  • The interest and charges are guaranteed to be frozen if the DAS is accepted.

What are the negatives:

  • The DAS will place a default onto your credit file. This default will last for 6 years and damage your credit score.
  • You cannot acquire further credit whilst in the Debt Arrangement Scheme.
  • Your DAS could last for much longer than other debt solutions.

Top Debt Arrangement Scheme Tips

1. Regardless of the value of your car you will not be asked to sell it.

2. If you have a house with £60,000 equity and debt of £15,000 the DAS could be perfect. This way you don’t have to sell your house and you’re protected to repay the £15,000 over an affordable period of time. Due to the credit crunch, you could enter a DAS while your house is on the market. Once the property is sold, some of the equity could be used to repay the debt. This way you receive the necessary protection from your creditors, and the time to sell your house.

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