Debt Arrangement Schemes: what is a Debt Payment Programme?

5 August2011

The Debt Arrangement Scheme, also known as DAS, is run by the Scottish Government. It offers Scottish residents a way to repay debts that should:

  • Give them longer to repay multiple lenders.
  • Prevent court action being taken against them by their lenders.

If you live in Scotland, have two or more unsecured debts and are finding them difficult to manage, DAS may be suitable for you.

What is a Debt Payment Programme?

A Debt Payment Programme (DPP) is an agreement under DAS (between you and your lenders) which lays down how much you can pay every month - and how long it should take you to repay your debts.

To qualify for DAS, you must have two or more lenders and enough 'spare' income to make payments to your DPP. You would only make one repayment every month.

Under DAS, an approved Money Adviser would help you to put together a DPP. Note that it'll only address your unsecured debts - debts that aren't secured against your property (things like Hire Purchase agreements, credit cards and unsecured loans).

What are the benefits of a Debt Payment Programme?

One real benefit is that the interest, fees and charges are frozen on your debts when you enter into DAS, from the date your DPP is approved.

Also, the scheme protects your assets, including your home. If you owned your own home, nothing would happen to it, unless you failed to keep up with your mortgage payments.

Remember, DAS is meant to be affordable, so you would only pay what you could afford - after taking into consideration mortgage / rent payments and other essential costs.

Finally, you are protected from legal action by your lenders. They could only take legal action against you if your DPP was revoked - and this wouldn't happen if you upheld your side of the deal. If this did happen, however, you would need to consider a different way of tackling your debts.

Two things to remember

You are required to repay the full amount of your debt, as with informal debt management plans. With DAS, however, you are legally protected from action by your lenders.

Finally, your details would be recorded on the DAS Register - and you wouldn't be repaying your debts as originally agreed - so your credit rating would be affected.

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Tags: Debt Arrangement Scheme, Scotland, debt, Debt Payment Programme, unsecured debt, Scottish debt solutions

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