The Debt Arrangement Scheme

The Debt Arrangement Scheme is a statutory scheme run by the Accountant in Bankruptcy. It is unique to Scotland and there is no direct equivalent elsewhere in the UK.

Crucially, it is not an insolvency procedure. You repay your debts in full, over an extended period, with legal protection while you do so.

What it gives you

• Interest, fees and charges are frozen and, on successful completion, written off
• All diligence stops: earnings arrestments, bank arrestments and attachments
• Creditors cannot start new action while the programme runs
• Your council must accept it for included council tax arrears
• You make one payment a month, distributed among your creditors

Council tax and DAS

Council tax arrears can be included, and this is one of the scheme’s real strengths. Once a payment programme is approved, your council cannot continue to enforce the included arrears, and any earnings or bank arrestment must stop.

As with all such schemes, ongoing council tax for the current year is not included and must be paid as a normal household expense.

The moratorium

Applying for a DAS gives you an immediate moratorium on diligence, which protects you while the application is considered.

You can also apply for a moratorium on its own, before you have decided which route to take, to buy time to get advice. There are limits on how often this can be used, but for someone facing an imminent arrestment it is extremely useful.

How to apply

You must apply through a DAS-approved money adviser. This will normally be a local authority money advice service, a Citizens Advice bureau, or an approved commercial provider.

The adviser will:

1. Prepare a financial statement
2. Work out a sustainable monthly payment
3. Propose a payment programme, with a duration based on that payment
4. Submit it to the DAS Administrator

Creditors have an opportunity to object. If they do, the DAS Administrator decides whether the programme is fair and reasonable, so a creditor objection does not automatically defeat it.

How long it lasts

There is no fixed maximum term. The programme runs for as long as it takes to repay the debts at the affordable rate, though a programme of an unreasonable length may be questioned.

Where you own a home, a longer period may be approved than would be acceptable under other routes, which is one reason DAS suits Scottish homeowners particularly well.

Fees

An approved money adviser in the public or voluntary sector will not charge you. A payments distributor takes a percentage from the payments you make, rather than charging you separately.

Be cautious of commercial providers charging additional fees for a service available free.

When DAS is right

• You can afford something each month, but not the contractual amounts
• You want to avoid insolvency, and its effect on your credit file and employment
• You own your home and want to protect it
• Arrestments have started, or are about to

When it is not

• You have no surplus income at all, look at sequestration or the Minimal Asset Process
• The debts are so large that repaying them in full is unrealistic, a protected trust deed may fit better

A DAS is recorded on the public DAS Register and will affect your credit file, but it is not bankruptcy and is generally viewed more favourably.

Questions people ask in Scotland

• Scott & Co sheriff officers: what to do if they have contacted you
• Stirling Park sheriff officers: what to do if they have contacted you
• Wage arrestment in Scotland
• Walker Love sheriff officers: what to do if they have contacted you