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Debt Arrangement Scheme

A Debt Arrangement Scheme (DAS) is a debt management tool available only in Scotland. A DAS is the only government-sponsored debt management plan available in the United Kingdom. All DAS initiatives are administered by the Accountant in Bankruptcy, the Scottish government’s agency responsible for administering the processes of personal bankruptcy and corporate financial insolvency.  Under Scottish law, individuals, traders, limited partnerships, unincorporated businesses, and certain categories of charities and are eligible for DAS. 

A DAS can only be administered by a qualified financial advisor or an individual how been designated as a Trustee of your financial affairs. Individuals who are interested in applying for a DAS must first complete a Debt Payment Program (DPP) with a verified financial advisor, which helps to calculate your surplus income.

What Documentation is Required for a Debt Arrangement Scheme?

Creditors must be provided with proof of your income and expenditures prior to entering into a formal DAS agreement. While your DPP already fulfills many of these documentation requirements, applying for a DAS requires still additional documentation. In addition to your official DPP mandate, you will be required to submit a recent wage slip and proof of any and all income, a copy of a recent utility bill, any lease or mortgage contracts as well as any information regarding any existing life insurance agreements. Once your application is submitted, it is important to know that the Accountant in Bankruptcy takes approximately six to eight weeks to process a DAS application.

What are the Benefits of a Debt Arrangement Scheme?

The first benefit of getting approved for a DAS is the peace of mind that comes from knowing that your debt is no longer mounting with each passing day. The stress and unrest that can come from mounting debt can be detrimental to both your physical and mental health. With a single monthly payment against your debt evenly distributed among each of your creditors doesn’t just bring financial relief but makes your financial life much easier to navigate. Lastly, since a DAS is a binding, legal resolution, creditors are legally prevented from taking further collection actions against you.

What are the Disadvantages of a Debt Arrangement Scheme?

You must make timely payments to your DAS each month. Failure to do so can lead to the termination of your agreement. Since the DAS articulately tracks all of your expendable income, entering into such an agreement can result in a period of very strict spending for most individuals and corporations who seek this route in order to become financially solvent. In addition, setting up a DAS will affect your credit rating for as long as you’re actively in agreement. This can make earning lines of credit difficult for future purchases such as automobiles or property.