Debt Payment Programmes

A DAS Debt Payment Programme (DPP) is designed to help people repay their unmanageable debts at a rate they can afford - and get out of debt without entering insolvency.

A DPP is an essential part of DAS (the Debt Arrangement Scheme), a statutory debt management solution offered by the Scottish government to help people who have unsecured debts they're struggling to repay.

What is DAS?

DAS (Debt Arrangement Scheme) was launched in 2004 as a debt solution designed to help Scottish residents pay off their unmanageable debts at a realistic rate.

DAS would freeze any interest and charges on your unsecured debts, and protect you from any further action from your lenders. It could be suitable for any amount of unsecured debt, as long as you can repay your debts in full within a reasonable period of time.

How does DAS work?

If you're eligible for a Debt Arrangement Scheme, you'll commit to a Debt Payment Programme (DPP), which would lay down exactly how you'll repay your unsecured debts - with monthly payments worked out according to what you can afford after your essential expenses (such as food, mortgage/rent, utility bills, etc.).

To apply for a DPP under DAS, you would need to seek advice and assistance from a Money Adviser to find out if it's the best debt solution for you.

If they agree it's the best approach to your debt problems, the first step would be to set up a DPP.

What is a DPP?

A Debt Payment Programme (DPP) is the actual proposal your Money Adviser would submit to your lenders, telling them exactly how much you owe and how much you can afford to repay every month.

Entering a DPP would freeze any interest and charges on your unsecured debts, and would allow you to make payments you can afford after you've covered your essential costs (from mortgage/rent to food and utility bills) every month - giving you a clear way out of debt.

How do I start a DPP?

To get a DPP set up, you would first speak to an approved Money Adviser to discuss if a DPP is the best solution for your circumstances.

If they think it is the best approach for you, the Money Adviser will help you draw up a DPP proposal, which shows how much you can afford to pay towards your debts each month - and how long it'll take you to repay your debts in full.

What happens next?

The DPP proposal will then be sent to your unsecured lenders, who will review it. If they approve, your DPP will go ahead.

If your lenders don't agree, there may be circumstances where the Accountant in Bankruptcy (AiB) - who is also the DAS Administrator - will approve the DPP proposal anyway, meaning your lenders would have to accept the terms of the DPP proposal.

Once your DPP is accepted, you will have a Payment Distributor appointed by your Money Adviser. The Payment Distributor will distribute the money amongst your unsecured lenders from the single payment you'll make every month - which could take a big weight off your shoulders.

How does a DPP work?

If your DPP is approved, you'll start making just one agreed, affordable payment every month.

As long as you keep up with your payments, entering a DPP will also:

• Freeze all interest, fees and charges on your included debts
• Protect you from any further action from your lenders
• Help you stay in your home - since the DPP payments you'd be making would be calculated to leave you with enough money for your mortgage (and other essentials)
• Not require you to release any equity from your home (as you might have to do if you entered a Trust Deed).

How long does a DPP last?

A Debt Payment Programme usually lasts until you've paid off your debts in full.

However, if your situation changes, your DPP may no longer be appropriate - and you may have to take a different approach to your debts.

What are the disadvantages of a DAS DPP?

If you fail to keep up with your repayments, your lenders could pursue legal action against you - including petitioning for your sequestration/bankruptcy.

A DPP under DAS will also remain on your credit file for six years, which can affect your ability to get credit during this time.

Could I apply for a DPP?

If you live in Scotland and you have debts you can't afford to repay as originally agreed - but can still make regular, smaller monthly payments - a DPP under DAS could be the best way of helping you clear your unsecured debts in full.

In order to get onto DAS, you must (a) have one or more debts you can't repay, and (b) live in Scotland.

Furthermore, you must also have a 'reasonable' level of disposable income every month after meeting your essential expenses such as rent/mortgage, utility bills, etc.

Could a DPP be right for me?

Why not call one of our advisers today on 0800 195 2911 to find out if DAS could be the most suitable way of repaying your debts?

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