DAS is a Scottish Government-backed debt management scheme which allows you to repay your debts through a debt payment programme.
The programme will allow you to pay off your debts over an extended period of time while giving you protection from the creditors who may be taking action against you to recover the debt.
It can last for any reasonable length of time and, if approved, will freeze all interest, fees and charges on the debt included, resulting in them being waived if you fully complete the programme.
How does DAS work?
Under DAS, a debtor commits to a programme of repaying their debts based on their disposable income.
Debtors must seek advice and assistance from a money adviser before applying for a debt payment programme under DAS.
This programme can last for any reasonable length of time depending on the amount of debt and how much the debtor can pay. Creditors will receive regular payments towards the debts owed to them under the terms agreed.
When the money adviser or DAS Administrator submits an application to creditors for approval, all interest, fees, penalties or other charges owed are frozen, provided the application is approved.
Who can apply for DAS?
DAS is designed to help individuals, couples and businesses repay their debts. It also helps creditors recover debts they are due. To be eligible for DAS, a debtor must have one or more debts and:
Be habitually resident in Scotland
Have sought the advice and assistance of a DAS-approved money adviser
Want to repay their debt without the threat of creditors taking legal action against them
- Have a reasonable level of disposable income after meeting their basic needs
However, someone in debt would not be eligible for DAS if any of the following apply:
They are party to a protected trust deed
They are bankrupt or subject to a bankruptcy restrictions order or bankruptcy restriction undertaking
Their DAS application only includes one debt and they are subject to a time to pay direction under section 1 (time to pay directions) or section 5 (time to pay orders) of the Debtors (Scotland) Act 1987, in relation to that debt
The DAS application only includes one debt and are subject to a time order under section 129 (time orders) of the Consumer Credit Act 1974 (d), in relation to that debt
- They are paying a debt or debts under a conjoined arrestment order. However, if a creditor, whether the creditor is involved in the conjoined arrestment order or not, has tried lawfully to enforce another debt owed, then a debtor may be eligible to apply for DAS
Couples who are each liable for a debt which may be included in a debt payment plan may apply for a joint programme if they are:
Spouses or civil partners of each other; or
Living together as if spouses or civil partners of each other
Both applicants must consent to the proposal.
Partnerships, trusts or unincorporated bodies can also seek to repay their debts over a period of time, up to a maximum of five years, through DAS.
Businesses excluded from DAS are:
Limited or public companies
Not formed under Scots law
How much does DAS cost?
Free, confidential and impartial advice is available to debtors. However, some organisations will charge for this service, so it's worthwhile checking before seeking advice. A money adviser cannot continue to charge you once your programme has been approved.
People who can give free, face-to-face advice include advisers in Citizens Advice Bureaux and local authority money advisers. Some organisations may also give information and advice over the telephone or online.
A charge is made to creditors for the provision of the payments distribution service and application fee. The legislation states the maximum fee to be charged for the application is 2% and the payment distributor’s fee is 20% of the amount due to be paid to a creditor.
Therefore, if a debtor completes their programme under DAS, creditors will receive 78% of the debt owed to them.
Upon completion, the debtor cannot be held liable for any further payments towards debts included in the programme, nor any interest, fees, penalties or charges which would have accrued during the scheme.
What is a debt payment programme?
A debt payment programme under DAS allows a debtor to repay their debt over an extended period of time. It can be for any amount of money or for any reasonable length of time.
A proposal is sent to all of the debtor’s creditors for consideration and they are given 21 days to respond with their acceptance or rejection to the terms of the programme.
Under the legislation, if a creditor doesn’t respond within 21 days, they will be treated as having accepted the programme.
If a certain amount of creditors don’t accept the terms, the DAS Administrator can still approve the debt payment programme if it’s fair and reasonable to do so.
When a debt payment programme is approved, creditors must comply with the DAS legislation.
If the debtor's circumstances change, the debt payment programme can be varied to take account of this.
The debtor, a creditor or a money adviser acting on behalf of the debtor can apply to the DAS Administrator to vary the approved programme.
If a debtor doesn’t comply with the conditions of the programme, it may be revoked and creditors will be able to pursue legal action against a debtor.
What are the conditions of a debt payment programme?
Once a DAS debt payment programme has been approved, a debtor must comply with certain conditions, specified by law. They must:
Make the first payment under a programme within 42 days of the programme being approved
Make all payments under the programme when they are due
Pay a continuing liability (such as on-going rent/council tax) when due for payment
Make no other payment to a creditor taking part in the programme other than a payment due under the programme (except for a continuing liability)
Not apply or obtain credit over and above the allowed amount unless permitted by the DAS Administrator
Notify their money adviser or the DAS Administrator of a change of address or any changes to circumstances within seven days
Provide information or evidence within 10 working days if requested by their money adviser or DAS Administrator
Make payments in respect of credit agreed and obtained under the rules of DAS when they are due
Give all notices and intimation as required by a debtor under the regulations
Complete and submit a tax / duty return or declaration on time and pay any sum due
- Notify the DAS Administrator as soon as possible if a money adviser does not act on their behalf, unless the money adviser has either resigned or been suspended or revoked
A debt payment programme may also be subject to further conditions by a money adviser or DAS Administrator, subject to approval. This could include a request to gain money from the sale of an asset, guarantee of extra payments such as a lump sum from any future income, or any other reasonable condition.
What happens when a debt payment programme is completed?
A debt payment programme reaches its conclusion when the debtor makes all payments as agreed, makes a lump sum payment equivalent to all outstanding payments due or all creditors agree in writing to complete the programme prior to the scheduled end.
At this stage, the debtor cannot be held liable for any further payments towards debts included in the programme, nor any interest or charges which would have accrued during the scheme.
Once the programme is completed, all of the debtor’s details are removed from the DAS Register and creditors will be informed their debts have been repaid. If the programme is being paid directly from the debtor’s wages, the DAS Administrator or the money adviser will contact the employer.
On completion of a debt payment programme, all interest, fees, penalties, and other charges which would have been owed if it had not been approved will cease to be owed.