The Scottish Debt Arrangement Scheme (DAS), the UK’s only formal debt repayment plan, is intended to help people struggling with problem debt and will be changing from the 4th November 2019.
The changes, that will come into force are contained in the Debt Arrangement Scheme Amendment (Scotland) Regulations 2019, and ARE intended to introduce a number of improvements to the Scheme.
Private Management Fees to be Abolished
The first of these change are that no-one who applies to the Scheme will have to pay a fee, even if they apply to the Scheme through a private debt management firm or insolvency practitioner.
In actual fact, charging a fee to the consumer in relation to the Scheme will be illegal after the 4th November 2019.
Second, whenever someone makes a proposal to the Scheme, it will now be automatically approved, even if some of the creditors object to it, providing they don’t have more than 10% of the total debt owed.
Where they are owed more than 10% of the debts in a proposal, the proposal will go to a fair and reasonable test administered by the Debt Arrangement Scheme Administrator, who will decide whether or not to approve the programme. However, with 96% of all applications being approved by automatic approval or the fair and reasonable test, it is anticipated even if more applications are not approved, those that are, will be approved quicker after the change are introduced.
Changes in Circumstances
Thirdly, where someone is already in a Debt Payment Programme, the Debt Arrangement Scheme Administrator, must approve that variation if all the creditors agree to it; or the change in the payments will mean the Programme will finish sooner than was originally proposed.
Finally, it will now also be possible for those in the Debt Arrangement Scheme to request up to two payment breaks each year (each break cannot be for more than one month), if they experience an unexpected crisis. Where they experience such a crisis, it will be for their money adviser to approve the payment break.