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Debt Arrangement Scheme (DAS)

If you live in Scotland and are struggling to repay your unsecured debts then you may consider entering into a Debt Arrangement Scheme (DAS). DAS is debt remedy operated by the Scottish government through the Accountant in Bankruptcy (AiB) that allows you to repay your unsecured debts through a Debt Payment Programme (DPP). This allows you to pay off your debts over an extended period of time while giving you protection from your creditors taking action against you to recover the debts listed in the DPP.

If you have spoken to a DAS-approved money adviser and they say DAS is right for you, when your DAS is approved, all interest, fees and charges are frozen and you are given protection from the threat of any legal action from your creditors over your debt. The DPP can last for any reasonable length of time, resulting in the debts being written off if you fully complete the DPP. DAS is not insolvency. It is the only statutory debt management plan operating in the UK

The DAS Administrator is responsible for the approval of a DPP, the approval of DAS-approved money advisers and payment distributors. They are also responsible for maintaining the DAS register which contains details of DPPs.

You must include all your debts in the DPP application. Your DPP will take into account what you can reasonably pay back at regular intervals based on your disposable income. If you are an individual person applying for DAS there is no limit on the level of debt or the repayment period in a DPP.

There are 5 parties involved in DAS:

  1. You: someone or a couple who has unsecured personal debts and has agreed to a Debt Repayment Programme (DPP) with a DAS approved money adviser.
  2. DAS approved money adviser: who will provide additional debt advice and apply for a DPP on your behalf
  3. Your creditors: someone who you owe money to and has agreed or is obliged to accept payments under a DPP
  4. DAS Administrator: The Accountant in Bankruptcy who oversees the administration of every DPP.
  5. Payments distributor: who distribute the money gathered to creditors in line with the agreed DPP

Couples

Couples who are each liable for a debt which may be included in a debt payment plan may apply for a joint programme if they are:

  • A husband and wife, or living together as husband and wife
  • Civil partners
  • Living together in a relationship with the characteristics of a husband and wife relationship, except that they are of the same sex

Both applicants must consent to the proposal.

Protection against court action

If your creditors are writing to you to say that they intend to take court action against you to recover the debts and you are seriously thinking about applying for a DPP under DAS then you, or an approved money adviser, can write to the DAS Administrator to intimate their intention. Atlantic Financial Management works with several approved money advisers based in Scotland. Our DAS approved money adviser can submit the ‘intimation’ via the Debt Arrangement Scheme Hub (DASH). The DAS Administrator will then register this intimation on the DAS Register.

Once on the DAS Register then you are protected for a period of six weeks against any creditor action. This period gives the approved DAS money adviser to submit your DPP proposal. Note that you can only submit an intimation to the DAS Administrator once in every 12 months.

Approving a DPP

The DAS Administrator must take into account all of the following:

  • the total amount of unsecured debt
  • the total period of time for the proposed payment plan
  • the method and frequency of the regular payments
  • the extent to which the creditors have consented
  • any other views from creditors
  • comments made by your DAS approved money adviser
  • any previous DPP applications
  • any other factor which the DAS Administrator considers appropriate

Important points to consider before commencing a Debt Payment Programme:

  • Your information will appear on the DAS register, which is an online public register which holds information about those intending to apply for, are applying for, and those who already have a Debt Payment Programme (DPP) under DAS. Anyone can access the register free of charge.
  • Creditors and credit reference agencies check the DAS register on a regular basis and may update your credit file to reflect this information.
  • 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.
  • If you fail to comply with any of the conditions of your DPP, then the DPP may be revoked and your creditors will be able to pursue enforcement action against you.
  • 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.
  • It is important that you read the Debt Advice and Information Pack produced by the Accountant in Bankruptcy (AIB).

On completion

A DPP reaches its conclusion when the debtor makes all payments as agreed, makes a lump sum payment equivalent to all outstanding payments due or all creditors agree in writing to complete the programme prior to the scheduled end.

At this stage, you cannot be held liable for any further payments towards debts included in the programme, nor any interest or charges which would have accrued during the scheme.

Once the programme is completed, all of your details are removed from the DAS Register and creditors will be informed their debts have been repaid. If the programme is being paid directly from your wages, the DAS Administrator or the money adviser will contact your employer.

On completion of a DPP, all interest, fees, penalties, and other charges which would have been owed if it had not been approved will cease to be owed.

Link: https://www.aib.gov.uk/debt-arrangement-scheme

Another impartial booklet from the AiB called "Debt and the Consequences" can give you more information about what can happen if you do not deal with your debts or your creditors. It also tells you more about the options that might be available to you.