The Debt Arrangement Scheme (DAS) is a Government-run debt solution for Scottish residents. It’s designed to help people with unsecured debts they’re struggling to repay get out of debt at a manageable pace.
Here we’ll look at what exactly DAS is and how it works.
How does DAS work?
The Debt Arrangement Scheme (DAS) is a statutory debt management solution available in Scotland. It’s designed to help people with unaffordable unsecured debts repay what they owe at a realistic rate.
Under DAS, a qualified Money Adviser will help you to put together a Debt Payment Programme (DPP). This sets out how much you can afford to pay towards your unsecured debts each month, and how long it should take you to repay your debts in full.
You can visit http://www.debtadvicenow.co.uk/das/ for more information.
How much will I repay on a DPP under DAS?
It’s different for each person. If your DPP is approved by your lenders, you’ll start making single, affordable payments every month towards your unsecured debts. You should be confident that your new monthly payments will be affordable every month, as they’ll be calculated to be affordable after all your essential living costs (food, mortgage/rent, utility bills, etc.) have been covered.
How long will it take to clear my debts on a DPP?
A Debt Payment Programme will, in most cases, last until you’ve repaid your debts in full. However, it could be ended earlier if you experience a change in your circumstances and an alternative approach becomes more suitable.
Who decides if a DPP will go ahead?
In most cases, a DPP has to be accepted by your unsecured lenders before it can go ahead. However, in some instances, the Accountant in Bankruptcy (who is also the DAS administrator) can approve your case even if it’s been rejected by your lenders – if they think it’s the best way forward.
Once your DPP is accepted, you’ll be appointed a Payments Distributor, who’ll be responsible for passing the agreed monthly amounts on to your lenders.
What are the advantages of a DPP?
Entering a DPP under DAS could have several advantages:
- Interest will be frozen on your debts – so they won’t continue to grow as you’re repaying them
- You’ll be protected from any legal action from your lenders
- You won’t have to release any equity in your home or face repossession, as you might have to with some other debt solutions.
What are the disadvantages of a DPP?
Your name will be entered in the DAS Register and you won’t usually be able to borrow any more money (unless you need it for essential repairs).
A DPP will remain on your credit file for six years – which may affect your ability to get further credit during this time.
However, as a DPP under DAS will only be a suitable approach if you can no longer afford to repay your unsecured debts as agreed, there’s every chance your credit rating will have already been damaged.
