Debt arrangement scheme Scotland

As the problem of consumer debt in Scotland continued to grow the authorities brought in a new style of debt management program in the shape of the debt arrangement scheme Scotland. This effectively attempted to sidestep the rigmarole of court activity and court applications for relatively small debts thereby allowing those struggling to have a swift resolution to their problems and visibility going forward.

In simple terms a debt arrangement scheme (DAS) allows the creation of a debt payment program (DPP) which is put together by professional financial advisers. There are five elements of the debt arrangement scheme which include: –

The debtor

The debtor is the individual who is having financial problems and they will have agreed to a debt payment program approved by a debt arrangement scheme approved money adviser.

DAS approved money adviser

The DAS approved money adviser is someone who is approved by the regulatory authorities and is able to give debt management advice and apply for a DPP on behalf of the underlying customer.


Creditors are those who are owed money by the underlying customer and who have agreed or are obliged to accept a payment plan under a DPP.

DAS administrator

The DAS administrator is responsible for maintaining the DAS register and approval of all DPP agreements. They play a central role in this particular process and will have the final say on a DPP.

Payments distributor

The payments distributor as the name suggests is in charge of ensuring that money gathered under the DPP is paid to the creditors who are part of the scheme.

Can I apply for a debt arrangement scheme?

In many ways a debt arrangement scheme is very similar to a trust deed although it is very much simplified for those with more straightforward financial situations. It is very different from a bankruptcy arrangement as a DAS will allow the debtor to arrange a payment program with their creditors whereby they pay off as much of their debt as possible over an extended period of time.

This will give the debtor protection from creditors who would not be able to take any action against them while the DAS is in place. It is also worth noting that interest, fees and charges on the underlying debt are frozen at the time of the DAS thereby ensuring that a difficult situation does not become any worse.

How much does a DAS cost?

The debt arrangement scheme is a government funded operation which is there to help tackle the ever-growing debt problem in Scotland. It is free to debtors who will receive confidential financial advice although if you approach accountants and other professional bodies there may well be charges associated with the advice they give you. Therefore, it is worth seeking the free advice initially to see whether a DAS is for you and to see exactly what you need to do and the timescales involved.

There is a charge for creditors who agree a debt payment program under a debt arrangement scheme with an application fee of 2% of the overall debt and payment distribution fee of 8% of the overall debt. Therefore an initial 10% is effectively written off from the outstanding monies owed to creditors who will receive a maximum of 90% of the money owed to them.

Criteria for taking out a debt arrangement scheme

The criteria for taking out a debt arrangement scheme are fairly straightforward and are as follows: –

The individual must be resident in Scotland

The individual must have taken advice from a DAS approved adviser

There must be a willingness to repay part of their debts without the threat of creditors taking legal action

There must be a basic level of disposable income available to cover every day living costs

There are a number of people who will be excluded from taking out a debt arrangement scheme with the criteria as follows: –

People who are party to a protected trust deed

Individuals who are either bankrupt or subject to bankruptcy restrictions

Individuals who have other debts outside of the proposed DAS application will need to take professional financial advice about their eligibility

Debtors who are subject to a time to pay direction will need to be reviewed and professional advice taken before confirming eligibility for a debt arrangement scheme

It is possible to take out a joint debt payment plan under the following criteria: –

A husband and wife living together

A civil partnership living together

A partnership with the characteristics of a husband and wife relationship

Managing debt going forward

We have covered the basics of the debt arrangement scheme and the debt payment program which are both very important introductions by the Scottish government. Effectively they simplify the process of debt management via a government controlled agency and offer free advice for those looking to resolve any financial issues.

Some experts believe that the reduction in bankruptcy and trust deeds in Scotland over the last few months is directly as a result all the government’s debt arrangement scheme and the underlying issue is not going away. The truth is that so long as the authorities make it as simple as possible for those in financial trouble to seek advice and to try and rectify their situation then does it really matter what route they take?

At the end of the day it is down to each and every individual to maintain and manage their own finances and where applicable to take advice regarding potential problems. It is very easy to take a step back and assume that everything will “turn out right in the end” but the problem is that the current economic situation is set to last for some time yet. Therefore we all need to take responsibility for our own individual situations and ensure that we are looking towards the best path for long-term resolution.


The introduction of the debt arrangement scheme and the debt payment program is a major development in recent years. It shows that the government is willing and able to tackle the ongoing issue of debt in Scotland and indeed many people will now feel more comfortable taking advice from a government agency as opposed to looking towards the private sector where costs can be significant.

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