Key Changes to Debt Arrangement Scheme

In Autumn 2008, the Minister for Community Safety, Fergus Ewing MSP approved a report on the review of the Debt Arrangement Scheme (DAS). The review concluded that DAS worked well for those who were able to access the scheme, however it also highlighted a variation in participation across the country.

In December 2008, Ministerial approval was given for the Accountant in Bankruptcy (AiB) to develop policy which would support a simple and robust system that would address regional disparities in the availability of approved money advisers and encourage further participation in the scheme.

The Policy Development Team have proposed a number of changes and are currently developing policies in these areas:-

Electronic Gateway

A new electronic application process to allow debtors to apply directly for DAS. Provision will be made for money advisers to submit a Debt Payment Programme (DPP) on behalf of debtors using the same gateway.

Deemed Consent

Any plan without majority consent in number or value of debt will become subject to a fair and reasonable test. We are considering proposals which will provide that any DPP exceeding 10 years is unlikely to be fair and reasonable. We are also considering a minimum payment of around £100 per month, as an entry criteria to the Scheme.

Administration

Money advisers have voiced concern that the DAS administration process is burdensome. Ministerial approval has been given for the DAS Administrator to take on the full administration role from 1 July 2009. All existing cases held by approved money advisers will be transferred to the DAS Administrator who will take over the administration of both existing and new DPPs.

Single point of Contact

A project is underway to establish a single point of contact for all major creditors, in order for DPP paperwork to reach the appropriate department within the correct timescale.

Single Debts

AiB is proposing to open up DAS to debtors with single debts. This will allow debtors who may be paying a single debt to have the same protection as those with multiple debts, who are currently participating in DAS.