Debt Arrangement Scheme

A debt arrangement scheme is a government-backed debt management scheme for residents of Scotland to repay their debts at an affordable rate. It allows you to repay your creditors over an extended period of time than was originally agreed, and during this time your creditors must freeze interest and charges, seeing them written off if complete the scheme.

To eligible for a debt arrangement scheme you must be a resident of Scotland, be put forward by a debt arrangement scheme approved adviser, have more than one debt, and have a reasonable level of disposable income.

If both you and your partner have debts, you may apply for a joint debt arrangement scheme, as long as you both agree to the terms.

Please Note: Debt Assist UK only provide debt advice; we do not directly provide any financial solutions ourselves. We will talk you through your available options and if appropriate, we can offer you a no-obligation referral to a regulated debt solution provider, from whom we may receive a referral fee. Some debt solutions involve fees to you – these fees may differ based on the circumstances of your individual situation, but will always be explained to you by your chosen solution provider in writing before you decide to take up their service(s).

What Happens In A Debt Arrangement Scheme?

A debt arrangement scheme allows you to repay your debts over a ‘reasonable’ length of time. For this to happen an adviser will discuss with you your level of disposable income, and then a proposal will be sent to all of your creditors for consideration. They are given 21 days to either accept or reject the debt arrangement scheme proposal, if they fail to reply in the given timeframe, they are considered to agree with the scheme.

Even if the creditors reject the proposal, it can still go ahead if the DAS Administrator considers it a ‘fair and reasonable’ proposal. Once it has been approved, your creditors must comply with the legal legislation.

If your situation changes, your debt arrangement scheme may be altered to take your new situation into account.

If you don’t comply with all of the conditions agreed, the debt arrangement scheme may be revoked and your creditors can add all of the interest and charges that would have accrued during the period that the DAS was running, they can now also take legal action against you if necessary.

Benefits of a Debt Arrangement Scheme

  • Repay your debts at an affordable rate.
  • Have enough money leftover to pay living costs.
  • Interest and charges will be frozen from when you apply.
  • Creditors can’t change for payments.

Disadvantages of a Debt Arrangement Scheme

  • Your details will published on the DAS register.
  • It will appear on your credit file for six years.
  • If it fails, creditors can add interest and charges and take further action.
  • Will negatively affect your credit rating.

What Happens After A Debt Arrangement Scheme?

Once you have completed the agreed payments to your creditors, or they all agree that in writing to end the scheme early, you are officially free from these debts.

You can no longer be held accountable for the debts included in the debt arrangement scheme, and you cannot be charged the interest and credit that was frozen for the duration of the scheme.