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Am I eligible for a Debt Arrangement Scheme (DAS)?


Am I eligible for a Debt Arrangement Scheme (DAS)?

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Scotland’s Debt Arrangement Scheme (DAS) has given thousands of people the support they need to pay off their debt, but knowing whether this solution is the right one for you can be a challenge. In this article, we clear up exactly who is eligible for the DAS, and what alternative options you might consider.

The Criteria

To be eligible for the DAS, you must:

  • Be resident in Scotland
  • Get the advice of a qualified money advisor
  • Have a reasonable amount of disposable income after paying essential living costs
  • Are not currently making use of any other debt solution, including Trust Deeds
  • Are not currently going through sequestration (Scottish bankruptcy procedure)

The DAS is designed to give people who are struggling with debt a chance to repay what they owe over a longer period of time, with interest and fees on the debt frozen. You can apply to the DAS whether you are struggling with one debt or several, but you must be struggling to meet your current payments. The DAS will also prevent creditors from hassling you, or taking legal action against you, which allows you to protect your assets. Under the DAS, you will work with your money advisor to arrange an individual Debt Payment Plan (DPP). The length of the plan varies, but does not usually exceed ten years. Although your interest and fees are frozen, you will have to pay back what you currently owe in its entirety. If you think this would take you longer than ten years, you may wish to consider an alternative solution.

Check if you qualify for the DAS


Alternative Options

If the DAS does not seem like the right solution for you, there are plenty of other options to choose from.

  • Trust Deed

A Trust Deed is a legally binding debt solution available to people living in Scotland. If you live in England, Wales, or Northern Ireland, an IVA is a similarly structured option. In a Trust Deed, you make a single monthly payment towards your debts for a set amount of time – usually five years – based entirely on what you can afford. At the end of the plan, any remaining debt is written off, giving you a fresh start. To be eligible for a Trust Deed, you will normally have to have around £6,000 of debt or more, and be able to make a reasonable monthly contribution after your living costs.

  • Debt Management Plan

A Debt Management Plan (DMP) works along similar lines to the DAS, but is not legally binding. It is an arrangement made between you and your creditors to pay a reduced amount towards your debts every month – extending the period of time you have to repay them. Like the DAS, you must repay what you owe in full. Your creditors might agree to help you by freezing interest payments and fees on your debts for the duration of the plan, but this is by no means guaranteed, and they could choose to stop the plan at any time. The main advantage of a DMP is that it has less of a negative impact on your credit score, and could even have a positive one. You can arrange a DMP by contacting your creditors yourself, paying a private firm to administer one for you, or speaking to a debt charity, who will administer the DMP free of charge.

  • Sequestration

Sequestration is the Scottish equivalent of bankruptcy. It is usually considered a last resort to unmanageable debt, but it can be the best option if you feel unable to make a monthly contribution towards your debts. During the sequestration process, control of your assets will be transferred to a designated Trustee, who is responsible for deciding how they could best be used to repay your creditors. You will be able to keep essential items, but if you are a homeowner you could risk losing your home. This is not always the case, though, and there are usually alternatives available such as remortgaging the property. The sequestration process usually lasts for 12 months, at the end of which your debts are written off. If you have enough disposable income, though, you may also be required to make a monthly contribution to your creditors for some further months.

For more advice about debt solutions, get in touch with a friendly Creditfix advisor on 0808 2085 198.