The Debt Arrangement Scheme or DAS is a government-backed scheme intended to assist people to repay their debts through a period of time agreed eliminating the threat of legal actions. It aims to consolidate your regular debt payments into smaller, affordable installments.
DAS allows you to apply for a DPP in repaying your debts over an arranged amount of time. It is only available for residents of Scotland. If you live in England, Wales and Northern Ireland, DMP or debt management plan is a similar debt solution but differs in terms of benefits and probable risks.
Does DDP suit me?
You will qualify for a DPP if:
- you’re residing in Scotland
- there’s adequate disposable income or money once you have compensated your essential living costs
- you have a debt to one or more creditors or institution
Every month, you have to ensure affordable payments towards your DPP. The money you pay is being divided between your creditors or lenders. A portion of your monthly installments is taken out to compensate for the running costs. As your debt advisor, we will oversee the Scheme on behalf of the Scottish Government.
Moreover, your DPP can be any amount as long as you repay what you owe within an acceptable period. If you failed to pay within the tolerable period, other debt solutions might be in place such as sequestration as the Scottish word for bankruptcy.
Setting up and Managing A Debt Payment Program
Your money advisor will set up and managed your DPP. Hence, they must be a specialist and has to be approved to carry out the Scheme.
Once determined that a DPP is the most suitable solution for you, a proposal will be forwarded to your creditors. In response, your creditor will be given 21 days to decide whether they agree to the proposal. Regardless of whether your creditor accepts the proposal or not, your DPP can still be approved by the DAS administrator when distinguished to be reasonable and fair for you and your creditors.
If your DPP is accepted, you’ll have to pay monthly to your payment distributor. Thus, you won’t be making payments to each and every creditor you owe money to. You’ll secure one monthly payment and our payment distributor will be the one to share the money with all your creditors.
if a DPP is recommended for you, we can help you set it up and manage it. If you are still in doubt about whether it suits you, give us a call.
Are interest and charges frozen on a DPP?
From the date you apply for a DPP your creditors have to:
- Freeze any interest or charges being applied to your debts
- Stop taking any further court or enforcement action
- Stop sending you letters asking for payments
If your DPP is not approved or you stop paying your DPP, your creditors can apply interest and charges on your debts and take court enforcement action again.
Definition of DAS Register
Once you apply for a DPP your information will be recorded in the DAS register. This is accessible online by everyone. It has details about people who are in the manner of applying for or currently on a DPP. This is to let your creditor know that you’re on a DPP and thus can’t be taken to court.
What if there are changes in my situation when on a DPP?
If your circumstances change while you’re on a DPP you can petition to vary your payments. Your creditors and the DAS Administrator will examine the consequences of the changes; for instance, if it affects the period on how long you can pay off your debt. Once determined, your creditors and DAS administrator will decide to approve or reject the application.
Besides, you can petition for a short-term break of one month when there are unexpected expenses. Your money advisor can recommend this and will notify your creditors. This request can be done twice within a 12-month period. When this happens, your payment will not vary but your DPP term will be prolonged to satisfy the break.
If you’re into ‘income shock’ for a short while when on a DPP, and for so long that your disposable income is decreased by 50% or higher, you can petition for a payment holiday. Income shocks can be an outcome of the following circumstances:
- losing a job or shifting to another career or job
- Maternity or paternity leave
- Unfit to work due to terminal illness or any disease hindering you to get a job
- Divorce or separation, either married couple or a co-habiting partner
- A decrease in tax credits or benefits payments
A payment holiday allows you to have a 6 months break from securing payments towards your DPP. However, the term of your payment holiday will still be added to your DPP.
When is DPP finish?
A DPP completes when:
- You’ve secured all the payments you consented
- The debt is paid off with a lump sum payment
- All creditors covered in your initial DPP grant to finish it before it desired completion date or period
When either of these things occurred, you won’t be held liable for any debt payments and you’ll be considered free from debts.
Can You Help Me with DAS?
If you’d wish to determine if the debt payment program under the Debt Arrangement Scheme is the best alternative for you, check our debt advice tool. Should you wish to speak via phone, call us on 0800 193 1024, Our debt experts can help you find ways to get rid of your debt in no time.