The Debt Arrangement Scheme (DAS)

The Debt Arrangement Scheme (DAS) lets you repay your debts in full through one affordable payment, called a debt payment programme (DPP). Once your programme is approved, interest, fees and charges are frozen, and creditors cannot take enforcement action over the debts it includes. You can only apply through a DAS approved money adviser, who cannot charge you for setting it up.

How does DAS work?

DAS is a statutory scheme under Scots law, run by the Accountant in Bankruptcy (AiB), the part of the Scottish Government that deals with insolvency. Instead of paying each creditor separately, you make one regular payment. A payments distributor shares it out between your creditors.

The steps are:

1. You get advice. A DAS approved money adviser looks at your debts, income and spending.
2. Your payment is worked out. The adviser uses the Common Financial Tool, the standard way of working out what you can afford to pay in Scotland, after your essential living costs.
3. Creditors are asked. Your creditors have 21 days to respond. If a creditor does not reply, it is treated as agreeing. If creditors holding at least 90% of the debt by value agree, the programme is approved automatically. If not, AiB decides whether it is fair and reasonable.
4. You start paying. Your first payment is due within 42 days of approval.

What happens to interest and charges?

Interest, fees and charges are frozen from the date you apply. If you complete the programme, the frozen amounts are written off. This is the main difference between DAS and an informal debt management plan, where creditors do not have to freeze anything.

What does it cost?

Money advisers cannot charge you for setting up a debt payment programme. The running costs are paid by your creditors: 2% goes to AiB and 20% to the payments distributor, taken from your payments before they are passed on, so creditors receive 78% of what you pay. You do not pay anything on top of your agreed payment.

Who can apply, and which debts can go in?

There is no minimum debt, but you must be able to repay what you owe in full within a reasonable time. There is no fixed term. Citizens Advice Scotland says more than 10 years is unlikely to be reasonable unless all your creditors are happy with it. AiB statistics suggest the average programme lasts about 6 years.

You cannot apply if you are:

• bankrupt, or in a protected trust deed
• under a Bankruptcy Restrictions Order
• only trying to include one debt that is already covered by a time to pay direction or order from the court

You can apply jointly with your spouse, civil partner or cohabiting partner, as long as you both qualify.

Debts that cannot be included

• student loans
• hire purchase or conditional sale agreements (although arrears on them can go in)
• court fines
• ongoing payments, such as your current rent, mortgage or council tax

What happens to your home, car and savings?

Unlike a trust deed or sequestration (bankruptcy in Scotland), DAS does not ask you to give up assets. You do not have to use your savings, sell your home or sell your car.

While your programme runs, you need AiB’s approval to take out credit of more than £2,000.

What if your circumstances change?

Life does not stand still for the years a programme can last, and DAS allows for this.

• Changing your payment. Your payment is based on what you can afford, and can be reviewed if your income or costs change.
• Payment breaks. If your disposable income falls by 50% or more, you can ask for a payment break of up to 6 months. The programme is extended by the length of the break.
• Crisis breaks. A short crisis break is also available for sudden emergencies. Your adviser can tell you how long it can be.

Will DAS affect your credit file and privacy?

Yes. DAS stays on your credit file for at least 6 years, which can make new credit harder to get.

Your details also go on the DAS Register, a public register on AiB’s website that anyone can search free. It shows your name, address, date of birth, the key dates and your money adviser. It does not show any details of your debts.

Is DAS the right choice, or is something else better?

That depends on your whole situation, and an adviser needs to look at it with you. Some points to weigh up:

• DAS repays your debts in full. Nothing is written off apart from frozen interest and charges. If you could never realistically repay in full, other options may fit better.
• A protected trust deed can write off the remaining debts included in it if it completes and you are discharged, but there are fees, you may need to release equity in your home, and your name goes on the Register of Insolvencies. Our comparison of a trust deed and DAS sets out the differences.
• An informal debt management plan is not legally binding. Citizens Advice Scotland and National Debtline both say DAS is usually a better choice in Scotland, because interest and charges stop automatically. See our guide to debt management plans.
• Sequestration or the Minimal Asset Process may be options if your income is low and you have little to repay with.

You can get free, impartial advice on all of this, and a DAS application has to go through an approved adviser anyway. Our page on free debt advice in Scotland lists services that can set up DAS at no charge.

Official sources

• mygov.scot: what is the Debt Arrangement Scheme?
• mygov.scot: how to apply for DAS
• AiB Notes for Guidance for money advisers on DAS
• The Debt Arrangement Scheme (Interest, Fees, Penalties and Other Charges) (Scotland) Regulations 2011
• Citizens Advice Scotland: the Debt Arrangement Scheme