10 things you didn’t know about a Debt Arrangement Scheme

Drowning in debt? Mate, we hear you. Who isn’t struggling to make ends meet in today’s expensive age? You will feel happy to know you are not alone. Most families in the United Kingdom suffer from this financial disease as the total volume of UK debt has reached completely new levels.

The good news is that you’re trying to figure out how to swim up to the surface and get a fresh start by understanding how debt arrangement schemes work or do not work. If you are serious about this, then you probably already know that there are several options you can put in place to manage your debt. 

If you are a Scottish citizen or reside in this “bonny land”, then you’ll be happy to learn more about the Debt Arrangement Scheme. Exclusively available in Scotland, it will enable you, as a debtor, to comprehend your finances better and appraise how to minimise all those never ending interest rate expenses. Take a look at the guide to debt management schemes.

Here are top 10 things you did not know about debt arrangement schemes:

1. Amendable Debt Payment Program Amounts

Life is unpredictable and can throw anything at you. Hey, your circumstances could change for the better or become even harder. Under a debt arrangement scheme, your debt payment program amounts can vary based on your fiscal status. All you have to do is to get in touch with your financial debt counsellor and manager and let him know. They will contemplate your request and evaluate whether it’s justified or not. Given you able to meet your debt monthly payments within a reasonable time parameter, there should be no problem in your request being accepted. 

2. DAS is not your payment plan

A little trivia for you! Did you know that DAS is the name of the debt arrangement scheme that has been created and enforced by the Scottish government to help debtors gain freedom? A DPP is the type of payment plan you opt for under this scheme. The debt payment program is what facilitates your debt repayments rather than the scheme itself. However, given the nature of the name, it is no surprise that DPP comes to mind rather than DAS when thinking about this option. 

3. Put in your household expenses

Failing to meet your basic household bills such as insurance, rent or mortgage, council tax, or utilities? No worries, go ahead and include them on your debt payment program plan. This will help you get back on your feet much faster. 

4. Frozen interest rate charges

The best part about this scheme? If you decide to opt for a debt arrangement scheme and meet your monthly DPP payments regularly, then your creditors are liable to freeze your accumulating interest rate charges. This way, you can focus on paying the monthly sum and getting yourself out of debt. 

5. Creditors cannot act against you

Your creditors are under a legal obligation to not harass you. However, if you face stress from them, all you have to do is to file an intimation to get them off your back. An intimation is a note placed on the DAS register to record your registration to pay as well as such occurrences. The DAS register is available and accessible to all your lenders. They can see that you’re in the process of setting up a debt payment plan and they have to give you a time period of six weeks to achieve this. Once your DPP is approved, your creditors cannot take legal action against you.

6. Take a break from payments

If there is a drastic change in your life such as you get fired from your job, you lose your income or you have an accident that limits your earning ability by a minimum of fifty percent, then you can put a brake on making your DPP payments. 

7. DAS will affect your credit rating (but less than other debt options)

Hey, as is the case with other debt management options, registering under a debt arrangement scheme will impact your credit rating. You should probably know that other serious forms of debt alternatives such as sequestration will affect your credit rating for six years or so. Under a debt arrangement scheme, the impact will not be so extreme. 

8. You can take up any job you want

If you set up a debt payment program under a debt arrangement scheme, you are still free to work in specific professions and work in the public office. As you may already know, other debt management instruments such as trust deeds and IVAS restrict your professional scope. 

9. You can only borrow a certain amount

It is a massive challenge to borrow additional money whilst registered under a debt management scheme and employed under a debt payment program. There is a ceiling to which you will have to abide by. Look at it this way, you’ll be compelled to live within your means and not borrow any more money.

10. Your properties and assets are safe

You will not be obliged to put your house or car or any such other assets on the market. Had you been under a trust deed or been advised by a bankruptcy lawyer to file for bankruptcy, you may have had no other choice. But good news- that is not the case here! 

Remember, you are only eligible for this scheme if you live in Scotland and can show that you have enough assets to pay your debts off. A lot of people who are finding it hard to pay basic household bills opt for this. You can talk to a relevant money advisor and his agency will set it up for free for you. It is highly recommended that you talk to a qualified money advisor to see what your options and seek his guidance. Make a well-informed decision based on your circumstances. Whilst there is a plethora of information available online regarding DAS, it is always best to go to a professional. Best of luck!