Debt Arrangement Scheme: What is Changing?

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.

Automatic Approval

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.

Payment Breaks

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.

Readers Questions

  1. Amanda

    Hi my mum had sheriff officers at the door today for a very account, what happens? She doesn’t work and is unwell,

    1. Scottish Adviser

      Hi Amanda

      Sorry the delay in getting back to you.

      A Charge for Payment is a legal demand for payment that says your Mum has 14 days to pay the debt she owes.

      If she doesn’t pay the debt within those 14 days, the Sheriff Officers can then execute Diligence. This means they can carry out other enforcement action, such as

      Wage Arrestments
      Bank Arrestments
      Attachment Orders

      You say your Mum is not working and is not well, so they will not be able to do a Wage Arrestment. They may try and arrest her bank account, but if there is less than £529.30 in it, it will fail. They will add the cost of the arrestment onto her debt, however and she may get a £25 fee applied to her account by her bank. If they do this, she should ask the bank to waive the fee.

      If she has more than £529.30 in her account, they can arrest any amount over that.

      I would suggest she should contact her local Citizen Advice Bureau or Local Authority Money Advice Service and see if they can help her negotiate a solution with the lender.

      They cannot enter her home unless they have an Exceptional Attachment Order, but these are very rare, so I wouldn’t worry about that at the moment.

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