Debt Arrangement Scheme (DAS) is a formal debt management solution available for residents living in Scotland. DAS allows you to freeze and discount fees, interest, penalties and charges as long as you keep up with your monthly debt payments. It is an alternative to trust deeds and other similar debt management solutions. Debt Arrangement Scheme can prevent your creditors from taking a legal action on you.
If you have spare income after your essential household expenditure is met, this would be offered to your creditors on a pro-rata basis until the debts are paid in full. This may mean paying debts over a longer term than was originally agreed (usually up to a maximum of 10 years).
Once your DPP becomes approved you are protected from any further creditor recovery action, they cannot add any further interest or charges to your accounts and any assets you have are completely protected, particularly your home.
Advantages of the debt arrangement scheme:
- Once the DPP is approved, as long as you maintain agreed payments, your creditors cannot take any debt recovery action and must stop adding interest and charges to the balances.
- Your assets are not taken into consideration with this option so homeowners, for example, are protected as long as mortgage/secured loan payments are maintained.
- You make only one monthly payment via an approved payment distributor who then pays each of your creditors.
Disadvantages of the debt arrangement scheme:
- Your credit rating may be affected for the duration of your DPP
- If the majority of your creditors object, the DPP may not become approved