Debt Arrangement Scheme (DAS)

Debt Arrangement Scheme or DAS isn’t bankruptcy. It’s a legal debt management plan or programme in Scotland. It gives somebody in debt the needed breathing space and permits them to repay their debt in full through an installment program over an extended period of time.

DAS, just like an administration order, provides protection for debtors from legal action from creditors.

DAS is offered not only for individuals, but also for business owners, organizations and charities. However, if you think you’ll fall into the classification of a business instead of an individual for DAS, you’d need to look for help from a certified insolvency practitioner.

It goes on for a period of time and, whenever approved, will freeze all interests, expenses and charges on the debt notwithstanding, that could be written off if fully completed.

Who could apply for DAS?

  • Individuals
    • be a constant resident in Scotland 
    • have asked for advice and help from a DAS-approved money adviser
    • want to pay their debts without the threat of legal actions from creditors
    • have enough amount of disposable income after paying for basic needs

On the other hand, an individual is not eligible if he’s one of the following:

  • part of a protected  trust deed
  • declared bankrupt or a person under bankruptcy restrictions order
  • DAS application only includes one debt and they are subject to a time to pay direction under section 1 (time to pay directions) or section 5 (time to pay orders) of the Debtors (Scotland) Act 1987, in relation to that debt
  • DAS application only includes one debt and are subject to a time order under section 129 (time orders) of the Consumer Credit Act 1974 (d), in relation to that debt
  • They are paying a debt or debts under a conjoined arrestment order. However, if a creditor, whether the creditor is involved in the conjoined arrestment order or not, has tried lawfully to enforce another debt owed, then a debtor may be eligible to apply for DAS
  • Couples – Couples or partners that are living together, they could apply for a joint programme, but both must give consent for approval.
  • Businesses – Partnerships, trusts or unincorporated bodies could also apply for DAS for a maximum time of 5 years, except for 1) limited or public companies, 2) businesses established or does business outside of Scotland, and 3) not formed under laws of Scotland

Advice from money advisers can be free or may be charged. Both of them are confidential and impartial. It would be best to check for their services before asking for help. A money adviser can no longer charge you if your programme is approved.

The maximum fee to be charged for the application is 2% and the payment distributor’s fee is 20% of the amount due to be paid to a creditor. So, once a debtor has completed their programme with DAS, creditors would receive 78% of the owed debt.

Even after the programme, the debtor is still not liable for any legal actions from the creditors.

How does the programme work?

DAS can be applicable for any amount for a reasonable amount of time. First off, a proposal will be sent to all of the debtor’s creditors for consideration. Then, they’d be given 21 days to reply on whether they would accept or reject the programme’s terms. If the creditor doesn’t respond within 21 days, under legislation, this will be considered as accepted.

DAS administrators could still be approved even if some creditors would not accept the terms. Also, creditors must comply with the DAS legislation once the programme is approved.

The debt payment programme is also flexible, adjusting to the debtor’s circumstances. The debtor, creditor, or the money adviser can act to change the terms on the approved programme.

If a debtor has breached one of the terms of their programme, the programme can be revoked and the creditors can take on legal actions against the debtor. If the programme has been revoked, the creditor could add all the interests, fees, charges, and penalties as if the programme has never existed.

Conditions under the debt payment programme

  • Make the first payment for the programme within 42 days of the programme being approved
  • If the money adviser has not acted on the debtor’s behalf, unless resigned or suspended, a debtor must notify the DAS Administrator
  • Submit a completed tax return or declaration on time
  • Provide notices, communications, and evidence within 10 working days if requested under the regulations
  • Make payments according to the agreed credit when it’s due
  • Any change of address or circumstances must be notified to their money advisers and DAS administrators within 7 days
  • Unless permitted, debtors aren’t allowed to borrow above the allowed amount
  • Making payments to the creditor other than the payment under the programme is prohibited
  • Pay a continuing liability (such as on-going rent/council tax) when due for payment

Advantages of DAS

The best part of DAS is that your debts are fully paid once the programme is completed. As mentioned also before, creditors are not also barred from taking any legal actions against the debtor, and your interests are frozen.

You’ll also have the money to settle first for your needs before settling your payment for the programme, and if ever your circumstances change, you can request for a payment break or change the terms of your programme.

Disadvantages of DAS

Once you’ve got approved for the DAS, your details will be put in the DAS register, which is online and can be accessed by everyone. This will also reflect on your credit report, so even when you’ve finished your programme, this would still be a factor when you’re trying to apply for a new credit.

Also, if you’re unable to keep up with your payments, your programme would fail and would be revoked, so creditors could take legal actions against you.

After the DAS. When the programme is finished, the details of the indebted person are expelled from the DAS Register and creditors will be notified that their debts have been settled. On the off chance that the programme is being paid directly through the debtor’s wages, the DAS Administrator or the money adviser will contact their employer.

With Getting out of Debt UK, we’ll help you determine DAS is best for you, and you’d still avoid economic challenges. Contact us today to arrange a free consultation.