The Debt Arrangement Scheme Scotland or DAS was first introduced by the Scottish Parliament in 2002. The objective of the enactment was to lend legal authority to some of the provisions of the act that works in favor of the debtor while limiting or depriving some benefits to the creditors. Unlike the DMP or Debt Management Program that is also offered by private parties, the DAS enjoys a statutory cover and terms that are considered better than most other debt solutions available to Scottish residents.
To qualify for the DAS, you must have at least 2 debts and subject to that condition, you can submit all your debts under the DAS. The DAS will consolidate the fractured debts and evolve a Debt Payment Program or DPP enabling the debtor to make repayments over a longer period of time.
Once the debt is brought under the DAS program, creditors cannot initiate any further recovery action for moneys placed under the DPP. Creditors would be required by law to waive all future interest and charges once the debt is brought under DPP. Debtors are required through an approved money advisor who will take into account all facts related to the application, verify the information provided and lay out a DPP. Depending on individual circumstances, the approved money advisor will set a time frame within which the debtor can clear the debts brought under the DAS. When compared to debt consolidation loan (or now logbook loans from LBC) s in other parts of the globe including the rest of U.K. the DAS is significantly debtor friendly and exhibits a true intent to provide succour to beleaguered debtors.
Upon approval of the DPP scheme, you can commence making a single payment through a government approved money advisor. The DAS scheme does not prescribe an upper limit for the amount that can be brought under the scheme. When you conform to the payment schedule prescribed under the DPP, enforcement actions cannot be initiated by creditors.
Approved Money Advisor
A debtor cannot apply directly for the DAS and he/she should find a government approved money advisor for the purpose. Most money advisors do not charge a fee for their services, but you are better off confirming this with the money advisor you chose to work with. On receipt of the application, the money advisor verifies your income and expenditure, non priority and priority debts. Your creditors are then advised of your financial position ahead of beginning negotiations with each creditor. The Debt Arrangement Scheme program commences when all creditors agree (or are deemed to have agreed) and a DPP is drawn out. This arrangement is subject to review every six months by your money advisor. For top quality debt advice Scotland you could try debt advisory Scotland (Trust Deed Scotland).
The Pros And Cons
Consolidating your debts under the DAS will help you make a single monthly payment and buy more time apart from escaping from the cascading effect of interest charges and costs added at regular intervals. On completion of the program you become eligible for fresh credit though you may pay higher costs.
Your home may not be protected since secured creditors can still serve ‘calling up notices’.
Another option before considering debt help may be to look into whats called a logbook loan. If you are a car owner and you own your vehicle outright you may be able to find a lender that can give you a low costing loan with your car backed as security. This could buy you some time to get your financial affairs in order.
The IVA is the English alternative to the Scottish Trust Deed. You can apply for an IVA online. For more information see our IVA page.