What Is a Debt Arrangement Scheme?
A Debt Arrangement Scheme (or ‘DAS’) is a formal, government-run debt management solution established by the Scottish Government. A DAS allows people to repay your debts in a manageable way over an extended period of time.
Under debt arrangement scheme regulations, you can apply for a Debt Payment Programme (DPP) through which you can repay all your debts in full over a reasonable period of time.
The Pros of DAS
The Cons of DAS
How Does a Debt Arrangement Scheme Work?
Before any debt agreement is prepared under a debt arrangement scheme, a professional money advisor will take into account your disposable income and expenditure. The monthly repayments will be determined based on your disposable salary.
The total duration of your debt payment plan depends on the amount of debt that you have accumulated and how much of it you can manage to repay. Your creditors will continue receiving the monthly payments you agreed on with them.
A debt payment plan will enable you to repay all your debts in full by reducing your principle borrowing into affordable monthly instalments. Once you have a debt arrangement scheme in place, you will only be required to make one monthly payment into the debt payment. The paid sum of money is then divided between your creditors.
You can apply for a DAS, regardless of the amount of money you owe. Once you and your creditors have agreed on a DAS, your lenders cannot pursue legal action against you to pressurise you into paying. All interest, penalties, fees, and charges on your debt will also be frozen.
However, if you are unable to pay the monthly amount that you agreed on with your creditors, they are not obliged to freeze interest, penalties, and fee charges. This may cause your debt to increase.