Debt Arrangement Scheme (DAS)

The Debt Arrangement Scheme (DAS) is a Scottish government-backed initiative offering a structured repayment plan for individuals facing unmanageable debt. By setting up a Debt Payment Plan (DPP), the DAS offers an affordable way to repay creditors without the threat of legal action.

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When you're dealing with debt stress, it's nice to know there are solutions in place to help you deal with the worst of your unaffordable debt.

The Debt Arrangement Scheme (DAS), supported by the Scottish Government, is one such solution. 

This article will explore how the Debt Arrangement Scheme works, who qualifies for a DAS, and the advantages and disadvantages of using this particular debt solution as a structured pathway towards financial stability in Scotland.

What is the Debt Arrangement Scheme in Scotland?

The Debt Arrangement Scheme (DAS) is a government-backed debt management program in Scotland designed to help individuals struggling with unsecured debts. 

Through DAS, you can consolidate multiple debts into a single affordable monthly payment plan. This plan is based on your ability to pay, which is assessed by a money advisor.

You will make a series of fixed monthly payments to creditors you owe money to, who are legally bound to freeze interest and charges included debts. 

The DAS provides a structured and manageable approach for individuals to repay their debts over an extended period, offering financial relief without resorting to more drastic measures like bankruptcy.

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Debts included in a DAS

Unsecured debts

Debts eligible for inclusion in a Debt Arrangement Scheme (DAS) are mostly unsecured debts, like credit card balances, personal loans, and overdrafts.

Examples of unsecured debts eligible for inclusion in a Debt Arrangement Scheme (DAS):

  • Credit card balances
  • Store card debts
  • Overdraft balances
  • Utility bill arrears
  • Unsecured lines of credit

Debt excluded from a DAS

Secured debts

Secured debts, like mortgages or car loans, can't be included in the Debt Arrangement Scheme. Secured debts involve collateral, and the creditor has a legal claim to the asset in case of non-payment.

Examples of secured debts that must be excluded from a Debt Arrangement Scheme (DAS):

  • Mortgages
  • Car loans (auto loans)
  • Home equity loans
  • Hire purchase agreements for goods with a security interest

If you enter the Debt Arrangement Scheme while having existing secured loans, you will be expected to continue the repayment of those loans, although this will be taken into consideration by your money adviser when deciding how much you can reasonably afford to pay towards the DAS each month.

Advantages and disadvantages of using the Debt Arrangement Scheme

Before moving forward with any debt solution, you should always weigh the pros and cons of that solution against your specific financial circumstances. 

We've highlighted some of the key advantages and disadvantages of the Debt Arrangement (DAS) below.

Advantages of a Debt Arrangement Scheme (DAS)

  • DAS consolidates debts into a single, manageable payment, simplifying your financial situation
  • Interest and charges are frozen, providing relief and preventing further financial strain
  • Protection from creditor legal action, reducing stress and financial pressure
  • Tailored repayment plans are based on individual affordability, ensuring it’s sustainable for you
  • DAS enables individuals to avoid bankruptcy, meaning you can protect assets like your home or car

Disadvantages of a Debt Arrangement Scheme (DAS)

  • Using the DAS will negatively impact your credit score, limiting future borrowing opportunities
  • Some creditors may reject participation, complicating the debt resolution process
  • Extended repayment periods may lead to a prolonged financial commitment
  • Approval relies on creditor consensus, which may not always be attainable
  • There’s limited flexibility in changing payment plans to suit changing financial circumstances

How to apply for the Debt Arrangement Scheme

Applying for the Debt Arrangement Scheme (DAS) involves a series of specific steps, from making the initial application to working with a DAS-approved money adviser. We've highlighted the key steps in the application process below.

Apply for temporary moratorium on debts

To protect yourself from legal actions by creditors during the DAS application process, you can apply for a temporary moratorium on your debts. This period offers a respite, giving you time to set up the necessary arrangements without facing immediate legal consequences for your unpaid debt.

Get debt advice from a reliable debt management company

You might want to engage the services of a reputable debt management company to guide you through the DAS application.

The cornerstone of this process is a money adviser who will assess your financial situation, helping you determine the most suitable course of action, and most reputable debt management companies have in-house money advisers who can support you.

Work on your application with an approved money adviser

Your money adviser is a professional who is equipped to evaluate your financial situation objectively, taking into account your income, expenses, and outstanding debts. Their expertise ensures that your proposed Debt Payment Programme (DPP) is realistic and sustainable.

You will collaborate closely with your money adviser when working on your DAS application. Not only will they ensure your proposed payment plan is affordable, they also play a vital role in liaising between you and your creditors later in the process, presenting a realistic and fair repayment plan and negotiating on your behalf.

Submit your application to the Accountant in Bankruptcy

Once you have your application ready, it needs to be submitted to the Accountant in Bankruptcy (AiB) for approval. The AiB is the government body responsible for overseeing insolvency processes in Scotland, and they will review your application and make sure everything is in order.

Await creditor approval for your debt management plan

After submitting your DPP, your creditors will review the proposal. The success of your application hinges on the approval of the majority of your creditors. While not all creditors need to consent, a significant proportion must agree for the DPP to proceed. Once it does, creditors will need to pause their debt recovery efforts.

Comply with the terms of you Debt Payment Programme (DPP)

Upon receiving creditor approval, it's time to adhere to the financial commitments outlined in your approved Debt Payment Programme. As long as you make the agreed-upon monthly payments to your money adviser each month, they will distribute the funds to your creditors accordingly.

How long do Debt Payment Programmes last?

The duration of Debt Payment Programmes (DPPs) under the Debt Arrangement Scheme (DAS) varies based on individual circumstances. The length of the DPP is influenced by factors such as the total amount of debt owed and your level of disposable income. 

The Debt Arrangement Scheme is designed to create realistic and sustainable repayment plans that ensure you can meet your financial obligations without undue hardship. While some DPPs may extend over a shorter period, others with higher debt amounts or limited disposable income may require a longer timeframe for repayment. 

The flexibility in tailoring DPP durations to individual financial circumstances is a key feature of DAS. A debt specialist will be able to advise on whether this approach is the best way to resolve your unique debt problems.

Will the Debt Arrangement Scheme (DAS) affect my credit rating?

Enrolling in the Debt Arrangement Scheme (DAS) will impact your credit rating for as long as your Debt Payment Programme (DPP) lasts. 

As long as you are in the DPP, it will be listed on your credit file. While the DPP is active, debt specialists, creditors, credit reference agencies, and future lenders, will have access to that information. This will potentially make it more difficult to secure credit, be accepted for mortgages or loans, or open a new bank account. 

Can I pay off a DAS early?

If your financial situation improves during your Debt Arrangement Scheme (DAS), it is possible to pay off the scheme early. 

In the event of a positive change in your circumstances, or if you come into a lump sum of money, you can use that amount to clear your remaining balance under the DAS. 

Make sure you inform your DAS-approved adviser of any changes in your financial situation during the arrangement. They can provide guidance, practical advice on the best course of action, and support you through the early settlement process.

There is a solution for you

Alternatives debt solution to the Debt Arrangement Scheme

While the Debt Arrangement Scheme (DAS) is a valuable debt management solution in Scotland, various alternatives cater to diverse financial circumstances. Each option offers unique advantages, and selecting the most suitable one depends on individual preferences and financial problems. 

Here are some alternatives to Debt Arrangement Schemes:

Trust Deed

Trust Deed is a formal agreement between you and your creditors, facilitated by a Trustee. This legal process typically lasts for four years, during which you make an affordable monthly payment based on your financial capabilities. Individual Voluntary Arrangements are the nearest equivalent in the rest of the UK.

After the agreed period, any remaining debt included in the arrangement is usually written off, providing a fresh financial start. Trust Deeds are particularly beneficial for people with significant unsecured debts and a regular source of income that allows them to afford a monthly contribution towards their debts.

Minimal Asset Process (MAP)

The Minimal Asset Process (MAP) is a form of bankruptcy in Scotland designed for individuals with low income, limited assets, and debts below a certain threshold.

The MAP bankruptcy process typically lasts for six months, after which most remaining debts are discharged. MAP is a swift and relatively cost-effective option for those with fewer financial resources who find themselves struggling with debt.


Sequestration is the Scottish equivalent of bankruptcy, available to individuals struggling with serious financial difficulty and unmanageable debt. It involves surrendering assets to a Trustee, who oversees the distribution of available assets among creditors. After a designated period, usually one year, all remaining eligible debts are discharged.

Sequestration provides a formal and court-approved process for debt relief but has a serious impact on credit ratings and personal assets like homes and cars, so it's usually considered as a financial las resort.

Key Takeaways

  • DAS is a government-backed initiative offering structured repayment for unmanageable debts
  • DAS allows people to repay debts using a single monthly payment with frozen interest and charges
  • To qualify, you need to live in Scotland and worked with an approved money adviser
  • DAS impacts your credit rating for the duration of your Debt Payment Programme (DPP)
  • You can end your arrangement early if your financial circumstances improve
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