INS3501 - Debt Arrangement Schemes

Introduction

The Scottish Parliament approved the Debt Arrangement and Attachment (Scotland) Act 2002 and subsequently went on to approve the detailed rules set out in the Debt Arrangement Scheme (Scotland) Regulations 2004 (the DAS Regulations). These regulations came into force on 30 November 2004. Further amendments were approved in March 2007 by the Debt Arrangement Scheme (Scotland) Amendment Regulations 2007 and by the Debt Arrangement Scheme (Scotland) Amendment No 2 Regulations 2007. These rules came into place on 30 June 2007.

The Scottish Executive introduced the Debt Arrangement Scheme as a debt management scheme and once approved it has the effect of stopping creditors from taking action to enforce payment.

The DAS has five main players. They are the debtor, the creditor, the approved money adviser, the payment distributor, and the Scottish Executive (the DAS administrator).

A DAS only applies to individual debtors who reside in Scotland with two or more creditors. Creditors in any part of the UK can be included in the scheme.

[The DAS does not cover limited companies, partnership firms (although the individual partners are covered), charities, trusts, and so on.]

The money adviser applies to the DAS administrator for approval of the debt payment programme (DPP) proposed by the client. If the programme is approved the payments distributor selected by the money adviser divides the client’s payment amongst the creditors.

The key principles of a DPP are

• That the client must want to repay their debts.
• That the money adviser works out the surplus income, and makes a pro-rata offer of payment to creditors.
• The DAS administrator approves DPP.
• DAS is a statutory scheme, and has the force of law.
• Interest, fees, penalties or other charges which are not owed at the date a DPP is approved are not payable, unless the DPP is revoked and ceased to be owed on completion of the programme.
• That if a creditor says nothing, they are presumed to agree (deemed consent)
• DAS is flexible

• When a DPP is approved the client is freed from the threat of

You can find more information at www.moneyscotland.gov.uk.

EIS Edinburgh (EISE) has responsibility for these cases. Additional information can be found at DMBM805000.