Debt Arrangement Scheme

A Scottish Trust Deed is a statutory debt solution in Scotland that reduces unsecured debt repayments down to one single monthly payment and writes off a significant part of your unaffordable debts.

The length of a Scottish Trust Deed can vary based on the debt level involved, the affordability of the individual, and other factors including assets, however, the typical length of Trust Deeds in Scotland is 48 months.

A Protected Trust Deed acts as a formal, legally binding agreement between an individual and their creditors.

If you’d like to learn more about whether a Scottish Trust Deed is right for you, or if the Debt Arrangement Scheme suits your lifestyle, needs and affordability better, we recommend that you call us on 0141 221 0999 or complete our online Trust Deed Wizard form to receive tailored debt advice.

You are eligible for a DAS ( Debt Arrangement Scheme ) if you are a resident of Scotland and also have money left over at the end of each month (after you’ve paid your household costs, like rent/mortgage/accommodation, food shopping, and utility bills) and you can clear your debts in a reasonable amount of time.

The quickest way to find out if you are eligible for a DAS is to use our online form, or contact us for tailored Scottish debt advice from an experienced debt adviser.

We will work with you to find out if DAS is the best debt solution for you, based on your situation.

The Debt Arrangement Scheme can include most unsecured debts, including:

✓ Credit Cards ✓  Store Cards ✓  Personal Loans ✓ Overdrafts ✓ Payday Loans ✓ Council Tax Arrears ✓ Utility Bill Arrears ✓  Shopping Catalogues ✓  Credit Unions ✓ HMRC

The following secured debts but only the arrears – this is optional:

✓  Mortgage Arrears, which are missed mortgage payments ✓  Rent Arrears, which are missed rent payments ✓  Car Finance Arrears, which are missed payments on your car, such as with an HP agreement

The following cannot be included in a DAS: Student Loans. Court Fines. CSA / Child Maintenance Arrears

Find out more about Trust Deeds too as there are variations in the types of debt that can be included in a DAS but more so, it allows you to make an informed decision on whether a formal debt solution is likely to be a type of Debt Consolidation that fits your needs.

For an individual, the Debt Arrangement Scheme in Scotland can last for a ‘reasonable’ length of time with no official minimum or maximum length.

It is unusual for the Debt Payment Programme (DPP) to last longer than 10 years, and there may be more suitable solutions for you such as Trust Deeds.

For businesses, a business Debt Arrangement Scheme may last for a maximum of 5 years.

How long does it take to set up DAS? If you choose to enter into a Debt Payment Programme under the Debt Arrangement Scheme Scotland, the first steps involve your Money Adviser proposing the DPP to your creditors. A DPP under DAS is proposed to creditors.

• Proposals are sent to all known creditors giving them 21 days to accept or reject the proposal
• If no creditors reject the proposal, then the DPP is approved automatically
• If creditors reject the proposal and they are owed up to 10% of the total debt, then the DPP application will be automatically approved
• If one or more creditors reject the proposal and they are owed more than 10% of the total debt, then the DPP can still be approved if the proposal is judged to be ‘fair and reasonable’ by the DAS Administrator (the Government agency responsible for DAS)
• If the DPP proposal is not approved, then you have a right of appeal, however, you may need to consider other solutions such as a Protected Trust Deed or Sequestration.

Trust Deed Scotland^® have an experienced in-house team that work with our clients from initial enquiry for help with debt, through to implementation and maintenance of the solutions that we offer. This is important as it allows greater continuity between the advisor that you speak to and your dedicated money adviser thereafter. If you work with one organisation, who in turn works with other organisations within that chain, it will often take longer to set up a DAS as a result.

The Trust Deed Wizard^® tool allows us to speed up the process of setting up as DAS, as it allows us search for your creditors, work out your disposable income, request up to date balances from the people that you owe money to, prepare your proposal which is then sent to creditors and dealing with potential objections.

The people you owe money to are more formally referred to as your ‘creditors’. You, an individual who owes the money, is formally referred to as a ‘debtor’.

When you apply for a formal debt solution, creditor contact will continue for a while, but you will find that once you are approved for your chosen debt solution, contact will reduce and eventually stop over time.

You may still be contacted by the people you owe money to at any point throughout your chosen debt solution but it is usually nothing to worry about. You do not need to discuss anything with your creditors and if you do get contacted by your creditors – all you need to do is direct them to us and we will deal with them on your behalf.

The most common types of creditor contact after a debt solution has commenced are communications such as annual statements (your creditors are legally required to send these, but they are not a demand for payment and you can simply ignore them) and a document known as a Notice of Assignment. This is a letter to tell you that a debt has been sold to another creditor organisation. It is fairly common for companies to sell debts to other creditor firms known as ‘Debt Purchasers’. Debt purchasing is exactly as it sounds, essentially one company selling the debt you owe to another. This is most commonly done with credit cards and loans but can happen with other types of debt.

Again, this is nothing to worry about. The new creditor, or third party acting on behalf of the original creditor, is still bound by the terms of the Protected Trust Deed, Debt Arrangement Scheme or other formal debt solution. They cannot take any action to recover the debt and the Notice of Assignment is for information only. Should your creditors send you a Notice of Assignment letter, you would simply make us aware of it and our in-house team will make sure that our records are updated and that any future correspondence goes to the right people thereafter. It is also normal for the debt purchaser to write to us informing us of their purchase at the same time that they write to you.

Getting contacted by the people you owe money to can be a stressful experience, which is why we have a dedicated team available to help you with this specific issue, you should never try to struggle on without asking us for help, we’re here to help you throughout the period of your chosen solution. And, if you are not yet in a debt solution but would like to find out more about whether a debt solution is right for you, please contact us on 0141 221 0999 and speak to an experienced debt adviser in confidence.

Your DPP payments will be calculated based on what you can afford to pay after all of your essential expenditures have been paid.

You will not be charged setup fees by Trust Deed Scotland® for your Debt Arrangement Scheme.

The monthly costs of administering the scheme are borne by the creditors i.e. from every £ received into the scheme, 22p is used to pay these costs; this 22p is split between the DAS Administrator (2p) and the Money Adviser (20p).

There may also be a payment made to the Payment Distributor (PD) and, if so, this would result in the Money Adviser’s fee being reduced by the same amount as paid to the PD. The remaining amounts are distributed amongst all creditors on a pro-rata basis and a successfully completed DPP deems all debts to be repaid in full.

This is the same for all individuals whether they use an insolvency practitioner/private sector firm (e.g. Harper McDermott Ltd) or a public sector organisation (e.g. CAB or local authority Money Adviser)

When your Debt Payment Programme is approved, you are placed on the DAS register. This is coordinated and managed by the DAS administrator and is available to potential lenders who you may be looking to borrow from.

Credit rating agencies use the DAS Scotland register, besides other insolvency registers to add information on to your credit history, which then reports your credit score.

Therefore, your DAS is likely to negatively impact your ability to take out further credit. Like all other formal insolvency solutions in Scotland, the presence of the Debt Arrangement Scheme on your credit report will last for a minimum of 6 years.

However, it is also worth noting that while the Debt Arrangement Scheme can last a longer period of time as repayments can continue to up to approximately 10 years, some alternative solutions, such as Trust Deeds, will end typically after only 48 months.

While your credit score may be important for you later in life, if you’ve been missing payments and been served a default notice on those debts, your credit score is highly likely to have already been severely impacted.

If you want to apply for a DPP (Debt Payment Programme) with Trust Deed Scotland, you would typically follow this process:

1️⃣ Find out whether a DPP is the right debt solution for you. Use our online debt calculator tool, or speak to one of our experienced debt advisors today.

2️⃣ We’ll give you detailed information on the risks and benefits of any solutions you may be eligible for which shall help you to decide if a DPP is the best solution for you, based on your affordability, lifestyle and needs.

3️⃣ Once you are happy to proceed, we’ll apply for a DPP as part of the Debt Arrangement Scheme, we’ll contact your creditors and you will start making payments to them through your DPP.

Find out more about the advantages and disadvantages of Trust Deeds and Minimal Asset Process route to bankruptcy as alternative solutions by calling our dedicated debt advice team today on 0141 221 0999.