What is the debt arrangement scheme?

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Debt arrangement schemeThe debt arrangement scheme, sometimes referred to as DAS, is a formal and legal debt solution that is backed by the Scottish Government. It has been devised as a practical and straightforward process to help people who are struggling to repay their existing debt commitments.

The ethos behind the scheme is primarily to give people the breathing space to get back on their feet by allowing them to agree with their creditors a reduced and affordable monthly payment towards their outstanding debt. In addition to this the scheme allows for interest, fees and costs to be frozen to further assist the debtor to get out of the problem.

The debt arrangement scheme is a legally binding debt solution which safeguards the debtor by stopping any legal action by creditors and also stops the pressure and demands from creditors chasing payments.

How it works

An authorised DAS Administrator is appointed to administer the scheme and ensure that the formal legal procedures are followed. The Administrator is responsible for negotiating the agreement with all the creditors and for arranging to receive the single monthly payment from the debtor which is then distributed to all of the creditors.

The debtor agrees to the debt payment programme and makes one monthly payment to it and has no ongoing contact with the creditors as the debtor only deals with the DAS Administrator.

The scheme is controlled through the Accountant in Bankruptcy who are the public body appointed to legally control the process. It should be noted however that the debt arrangement scheme is not an insolvency solution and is not bankruptcy.

An effective debt solution

The Scottish debt arrangement scheme is promoted as an effective debt solution that takes account of both the borrowers and lenders interests. There is no write off of debt with DAS and the scheme is designed to help people who have debt problems by reducing their payments and giving them more time to pay. The freezing of interest and costs is designed to stop the original debt spiralling out of control.

Another important aspect to the scheme is that if people’s circumstances change significantly then the agreed payments can be revised to reflect the reality of the new financial situation.

Seek professional debt advice

Whilst the debt arrangement scheme is a popular personal debt solution that has much to offer it is always important to seek professional debt advice to ensure you are aware of all the options available to you. The key to an effective debt solution is one that takes account of your own particular circumstances. All debt problems are different and the amount of debt and type of debt in relation to your income and assets must be assessed fully in order to ensure the best option is chosen to resolve the problem for now but also to ensure it is right for your future.

A successful debt solution is one that alleviates the financial strain of your existing debt situation, but also provides a route out of debt.

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