Debt Arrangement Scheme
What is a Debt Arrangement Scheme?
A Debt Arrangement Scheme is for residents of Scotland and allows you to repay your debt at an affordable rate as the payments are based on what you can afford to pay. The term for a Debt Arrangement Scheme will depend on the amount of debt you owe as you will pay the debt back in full. Whilst in the Debt Arrangement Scheme all interest and charges will be frozen and your assets will be protected.
As with all debt solutions, it is beneficial to discuss all of your options with a debt advisor to ensure you are looking at the most suitable solution.
Advantages
- A DAS offers you legal protection from your included creditors
- Your assets are generally not included in a DAS
- Interest and charges on included debts will be frozen
- Creditors cannot legally chase for additional payments
- The payments you make into a DAS are based on your income and expenditure, so should always be affordable to you
Disadvantages
- You must go through a Money Advisor to get a DAS
- You must pay a monthly fee to your Payment Distributor
- Your credit file will be affected for 6 years and your ability to obtain credit may be limited
- You can only make one application a year, so if your DAS application is rejected you will have to find an alternative solution or wait 12 months before reapplying
- Some money advisors may charge a setup fee. 10% of your monthly payments are also taken as fees – 8% by your chosen payments distributor and 2% by the Accountant in Bankruptcy