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Is DAS right for you?

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i This solution is only available in Scotland.

Debt Arrangement Scheme (DAS)

DAS Or DMP? Debt Arrangement Scheme advice

A debt payment programme (DPP) under the Debt Arrangement Scheme (DAS) and a debt management plan (DMP) could both help you deal with your debt problems by making repayments at an affordable rate. But these debt solutions have important differences and they can affect you in different ways.

Both solutions allow you to make single, affordable debt repayments each month to be shared across your creditors.

The Debt Arrangement Scheme (DAS) is a formal scheme set up by the Scottish government, meaning there are legal protections for you and your creditors. It allows you to apply for a Debt Payment Programme (DPP). To set it up, you need the help of an approved money adviser or insolvency practitioner.

A debt management plan (DMP) is an informal solution. A debt solution provider can set up a DMP for you, if they’re regulated by the Financial Conduct Authority, you can manage one yourself. Because it’s informal, your creditors don’t have to officially agree to your DMP, but in our experience many do.

You don’t have to pay any fees for a DPP or DMP when you go through StepChange.

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From our Scottish office in Glasgow, we can help you set up a DPP under the Debt Arrangement Scheme, a DMP, or another other debt solution that best suits your personal circumstances. Find out more about debt advice in Scotland and how we can help you.

It’s very important to get free and impartial debt advice before going ahead with any debt solution. This will help you understand which options are best suited to your situation.

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Is DAS right for you?

Free, online debt advice available now.

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How might the Debt Arrangement Scheme help me deal with my debts?

A DPP under the Debt Arrangement Scheme is an agreement you enter into with your creditors that aims to fully pay off your debts, at a rate you can afford. A debt payment programme under DAS is a formal, legal contract. This means both you and your creditors are bound to it and protected by it.

How it works:

  • You make a single monthly payment, based on what you can afford, which is shared across your creditors
  • Your creditors will no longer contact you to ask you for repayments
  • All interest and charges on your debts will be frozen and written off when you complete your DPP
  • Assets such as your home or car are protected under DAS, as long as you are keeping up repayments on them
  • Your creditors can’t take you to court, start any new diligence action, or petition for your bankruptcy for any debts included your DPP
  • Your name will be recorded in the public DAS Register when you participate in the DAS
  • The Accountant in Bankruptcy make the final decision on whether or not your DPP can go ahead, even if a creditor hasn’t given their approval.
  • Your creditors are asked if they agree your application is fair and reasonable. If they don’t respond, they’re deemed to have approved it
  • If your circumstances change, you may be able to apply for crisis breaks, variations or payment holidays

How long a DPP can last for?

There’s no maximum time that a DPP can last for. Stepchange will only apply for a DPP on your behalf if it would last less than 20 years, because if it were to last longer than that it’s likely that other solutions would be more suitable to you.

However, you can find a money advisor of your own if you wish to apply for a DPP of longer than 20 years.

Find out more about setting up and managing a debt payment programme through the Debt Arrangement Scheme.

How might a DMP help me deal with my debts?

As with a DPP, your creditors don’t have to agree to your plan, but we’ve found that most creditors will accept DMP payments.

How it works:

  • You make a single monthly payment, based on what you can afford, which is shared across your creditors
  • Your creditors also don’t have to agree to stop contacting you to ask for payment, although most will accept the payments you make through your DMP
  • Many creditors will also freeze interest and charges for a time while you deal with your debt problems, however, they are still able to charge interest and charges if they choose to
  • Your DMP will not be recorded on a register, but the payments will be recorded on your credit file
  • Because a DMP is an informal solution, it’s still possible for creditors to take action to recover the money you owe them by using any assets you have, including property
  • For example, they could apply for an ‘inhibition order’ on your home, which could result in you not being able to sell it without getting permission from your creditors

How long can a DMP last for?

With a debt management plan (DMP) you pay back your debts at an affordable rate, over a reasonable period of time, usually no more than 10 years, although this could be longer, depending on your circumstance.

Find out more about getting a debt management plan.

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Is DAS right for you?

Free, online debt advice available now.

Get debt help

Can I pay my DPP or DMP off early?

DAS:

You can end your DPP through DAS early by making a lump sum payment equal to all the outstanding payments due.

If your lump sum doesn’t equal the outstanding payments, you can still make a partial settlement offer at any time. All creditors are offered a fair share, those that accept the partial settlement will be removed from your DPP and those that don’t will remain in your DPP.

Your money adviser can also ask your creditors to accept less than the full amount you owed them when you started on the DAS.

This is called “offering a composition” and is only possible once you’ve repaid 70% of your debts and you’ve been making full payments.

If all your creditors accept this, you’ll be able to end your DPP early.

DMP:

You can also pay a DMP off early with a lump sum.

It may be possible to make a partial settlement, and request that the remainder of the debt is written off. This will depend on your creditors, and how much of the debt you’ve already paid off. Find out more about making settlement offers to creditors.

How long do DPPs and DMPs stay on your credit file?

Your credit file records details of any defaults on accounts, debts that have been settled or paid off in full, partial payments (where the creditor has accepted a reduced payment) and details of insolvency solutions or restrictions.

Because you’ll be making reduced payments through your DPP or DMP, these will be recorded on your credit file and stay there for six years.

How do I find out if the Debt Arrangement Scheme or a DMP is right for me?

You should always get free and impartial debt advice before going ahead with any debt solution, to check it’s the best one for your individual circumstances.

To learn which debt solutions, including DPPs and DMPs, are available to you, you’d be asked a range of questions to find out:

  • Who you owe money to
  • What types of debt you have
  • Whether you have assets or a job that could be affected by any debt solution
  • How much you can reasonably afford to pay towards your debts
  • Whether your circumstances are likely to improve in the next few years

As part of your debt advice session, you would add details about your income, spending and debts into your monthly budget. Then you’d be able to see whether there is any money left over for making debt repayments after you’ve dealt with your household spending.

If you have money left over, this is called a surplus, your surplus could be used to make payments through a DPP or a DMP. There may be other debt solutions that you can consider, depending on your circumstances.

How do I apply for a DPP through DAS or a debt management plan?

When you’ve completed your debt advice session with us, we’ll give you a ‘personal action plan’. This will include guides to setting up any debt solutions we recommend, based on your individual financial circumstances.

We’re on hand to support you as you deal with your debts. Whether you choose a DPP through DAS or a DMP, we can manage both of these solutions for you.

Find out more by using our free online debt advice tool or, if you’d prefer to speak to someone, call us.

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