UK debt charity Stepchange has called for the Scottish Government to reform and extend the Debt Arrangement Scheme to make it more available to hard pressed Scottish families.
Following on from my report into the Debt Arrangement Scheme last week, a Stepchange spokesperson speaking in The Herald said:
“Expanding the DAS would give people time to get back on their feet without the worry of their debts spiralling out of control. By extending DAS, the Scottish Government would give people the best chance of getting themselves back into a position where they can start making payments on their debts.”
However, as I showed in my report, last year Stepchange only set up 424 debt payment programmes under the Debt Arrangement Scheme in 2015/16, down from the 632 they set up in 2014/15.
The Debt Arrangement Scheme has seen a substantial reduction in the number of cases proposed and approved since April 2015 after the Scottish Government introduced new rules that calculated how much people had to pay towards their debts in the Scheme.
In the first year after the rules were introduced, 2015/16, the number of cases reduced by 51%, and only increased in 2016/17 by 9%, meaning the numbers are still down by 46% from the 2014/15 figures.
In my report I called for the Scheme to be extended and reformed by:
- reforming how the Common Financial Tool is applied to debtors entering into a Debt Payment Programme;
- removing the requirement all debts had to be included, to allow priority debts like mortgage and rent arrears to be dealt with differently; and
- by allowing more firms to become payment distributors as part of the Scheme