DAS is a statutory debt management scheme introduced by the Scottish Government to help Scottish residents repay their debt(s) over an agreed period of time without the threat of court action from creditors.
Under DAS, you can apply for a Debt Payment Programme (DPP) that allows you to pay off your debt(s) over an extended period of time. Your DPP will take into account what you can reasonably pay back at regular intervals based on your disposable income. Please note that secured loans, student loans and court fines will not be included and so you will still need to make repayments towards these debts.
Who is involved?
• DAS Approved Money Adviser (a money adviser): An individual who meets the criteria to offer a DPP under DAS as a debt management option.
• DAS Administrator: The Accountant in Bankruptcy (a Scottish Government official) who oversees the administration of every DPP.
• Payments Distributor: an organisation responsible for the collection of DPP payment instalments from debtors and the distribution of these funds to creditors.
Here is a summary of the main advantages and disadvantages of a Debt Arrangement scheme (DAS)
• There is no limit on the level of debt or the repayment period in a DPP. A programme can last for any reasonable length of time subject to the value of the debt.
• When the DAS Administrator or money adviser submits the application for a DPP to creditors for approval, all interest, fees, penalties or other charges that would have applied to your debt(s) are frozen and are waived upon completion of your DPP.
• allows you to make one regular payment towards clearing your debt meaning you don’t have to deal with your creditor individually.
• provides protection from creditors taking enforcement action to recover money owed to them.
• Unlike the other formal debt solutions including Trust Deeds and Sequestration, you will not be forced to release equity from your property if you undertake a debt arrangement scheme. Your property will also be protected from further legal action by your creditors such as their application for a charging order.
• You will have to repay 100% of your debt. Creditors will not normally agree to write off any debt. As creditors do not agree to write off any debt in a DAS, it means that they will still be paid everything that they are owed although it may take a far longer period of time to achieve this. The only exception is where debt is written off by creditors agreeing to an offer of composition – this can only be considered if 70% of the amount owed at the outset has been repaid or you have made payments for a full 12 years (excluding payment breaks).
• Because you are paying reduced amounts each month your debt repayment period will be significantly increased. As such the time it takes to repay all of your debt and become debt free may take many years.
• If you participate in DAS then your details will be recorded on the DAS register. This is a register which can be accessed free of charge. Creditors and credit reference agencies check this register on a regular basis and may update your credit file to reflect this information. While you have a DPP under DAS, you will not normally be able to access further credit.
• There is no guarantee that your DPP application will be approved by the DAS Administrator.
• If you miss payments or make part payments resulting in you owing the equivalent of two monthly payments and a further payment is due, your DPP may be revoked although if your circumstances change and you can no longer afford the agreed payments, or wish to increase the level of payment, you may apply for a variation to your DPP.
• If you fail to comply with any of the conditions of your DPP, then the DPP may be revoked and your creditor(s) will be able to pursue enforcement action against you.
• If your DPP is revoked, you will be liable for all interest, fees and charges that would have been payable had you not entered into your DPP.
How much does it cost?
A charge is made for the DAS application and for provision of the payments distribution service. The maximum fee to be charged for the application is 2% and the payment distributor’s fee must not be more than 8% of the amount due to be paid to a creditor.
Some organisations charge additional fees for setting up a DAS. Money Village will direct you to sources of free, impartial advice if this option is suitable for you.
Alternatively, please see https://www.aib.gov.uk/debt-arrangement-scheme for further information or call 0300 200 2600.
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