Debt Arrangement Scheme (DAS)

The DAS process starts with creating a Debt Payment Programme (DPP). This outlines your current financial position and proposes a plan for how you are to repay your debt to creditors. By law, once creditors receive a copy of your DPP, they must freeze all interest and charges and are preventing from taking legal action against you to recover the money you owe. At Scotland Liquidators we are approved money advisers, meaning we are authorised to create DPPs and liaise with creditors on your behalf.

Once a mutually agreeable monthly repayment amount has been set, you will make this payment towards your DAS which will then be distributed amongst your creditors (the people you owe money to) until the debt is cleared. You will no longer need to deal with your creditors; all communication and the handling of the monthly repayment amount will go through us.

You can include the vast majority of unsecured debts in a DAS such as credit cards, store cards, payday loans, and unsecured loans, as well as arrears for council tax and rent.

You will be unable to include any secured debts such as mortgages, secured loans, or hire purchase agreements in your DAS. Student loans are also not able to be added to a DAS so you will need to continue with your payments towards this as usual.

While a DAS may be the most appropriate solution for one individual, it may be highly unsuitable for another. This is why you are required to seek advice from an approved money adviser before going ahead with any debt solution as they will be able to talk you through the advantages and disadvantages of each option and identify the best course of action for you based on your individual circumstances.

Advantages of a DAS

• A DAS is not a formal insolvency process. If you do not wish to declare yourself insolvent, but do need some help managing your debts, a DAS could allow you to do this
• Your home is not at risk with a DAS which is not always the case with formal insolvency options such as trust deeds and sequestration
• Your unsecured debts are consolidated into one regular payment making it easier to manage your money
• All interest and fees are stopped making it easier for you to pay down your debts
• As long as you keep up with the agreed repayment amount of the DAS, creditors cannot take any legal action against you or ask you to pay more money towards your debts than has been agreed

Disadvantages of a DAS

• You must repay all the money you owe. Unlike other debt solutions, such as a trust deed, you are required to repay all of the debt you have.
• A DAS will negatively impact your credit score

You will not be permitted to take out any additional unsecured debt while under the terms of the DAS unless you get approval from your DAS scheme’s administrator beforehand

No two Debt Arrangement Schemes are the same; each DAS is tailored depending on the individual and their own set of unique circumstances. They can run for as long as it required for your debts to be cleared; typically, therefore, the lower your debts and the more money you can afford to contribute towards them on a monthly basis, the shorter the term of the DAS.

Affordability is key when it comes to entering into a DAS; your proposed monthly repayment amount must be affordable and sustainable. We will work alongside you to draw up a DPP which accurately illustrates your current financial position and how much you can realistically afford to contribute towards paying down your debts.

Depending on how much money you owe and how much surplus income you have, your approved money adviser may determine that a DAS is not the most suitable option for you. In this instance, they will be able to talk you through the various other debt solutions which exist which may be better suited to your individual circumstances. These options could include a trust deed or sequestration.