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Alongside Trust Deeds and sequestration, debt arrangement schemes are one of the main debt solutions for people in Scotland. Here’s all you need to know about debt arrangement schemes. If you need a helping hand to get out of debt, a debt arrangement scheme could be a good option for you. Debt arrangement schemes, endorsed by the Scottish government, are designed to help you pay back your debt at regular, manageable intervals – without the threat of legal action hanging over you. Debt arrangement schemes are for individuals and businesses.
With a debt arrangement scheme, you repay your debt through what’s known as a debt payment programme. If approved for a debt arrangement scheme, you commit to the debt payment programme (DPP) through which you will pay back what you owe in regular instalments. Importantly, your repayment plan will be based on your disposable income, so will be manageable payments.
Through a DAS, you will be protected from your creditors taking action against you to recover the debt. When the debt arrangement scheme is in place, all interest and fees are frozen and will be written-off if you fully complete the debt payment programme. Debt Arrangement Schemes freeze interest, fees and charges from the date you apply for your DPP. As long as you fully complete the DPP then these interest and charges cannot be added back by your creditors.
Credit Cards
£4,500
Personal Loan
£3,500
Store Cards
£2,000
Council Tax Arrears
£808
Total Debt £10,808
Old
£303
New
£118
Payment
Reduction
61%
* Subject to creditor acceptance * Payment subject to individual circumstances * Credit rating may be affected * Example debt payment programme only
For individuals, Debt Arrangement Schemes can last for a ‘reasonable’ length of time. For businesses, they last for 5 years maximum.
A Debt Arrangement Scheme can include most unsecured debts, including:
✓ Credit Cards ✓ Store Cards ✓ Personal Loans ✓ Overdrafts ✓ Payday Loans ✓ Council Tax Arrears ✓ Utility Bill Arrears ✓ Shopping Catalogues ✓ Credit Unions ✓ HMRC
The following secured debts but only the arrears – this is optional:
✓ Mortgage Arrears, which are missed mortgage payments ✓ Rent Arrears, which are missed rent payments ✓ Car Finance Arrears, which are missed payments on your car, such as with an HP agreement
The following cannot be included in a DAS ❌ Student Loans ❌ Court Fines ❌ CSA / Child Maintenance Arrears
Length – Trust Deeds last for 4 years. After this time, any remaining debt is paid off. With Debt Arrangement Schemes, they last until all your debt is repaid.
Amount of debt – to qualify for a Trust Deed, you must be in at least £5,000 of debt. For Debt Arrangement Schemes, there is no minimum debt level.
Contact an expert money advisor at Trust Deed Scotland to find out more about the debt solutions available to you. We are here to help you decide the best course of action to suit your individual needs and support you every step of the way. If you would like a fresh start, get in touch today.
We understand that dealing with debt can be stressful, but it doesn’t have to be. Every year we help thousands of Scottish residents protect their home, car and lift the burden of debt to enjoy a debt free future.
We recommend you look at what options are available to you so you can make an informed decision, you can do this by
We can work out your new affordable lower monthly payment and advise you through your options, some of which can even write off the debt you can’t afford.
If you want to proceed with a debt solution, whether it be a Debt Arrangement Scheme, or an alternative method – We will start working on your proposal to make sure your creditors will accept it.
You will be sent this via email
You will be aware of all the pros and cons
You will be 100% happy with this proposal
The next step is to get the Debt Arrangement Scheme approved by your creditors.
Typically you make your first affordable payment once your DAS plan is approved, during this time:
Your creditors are not allowed to contact you for payment
We deal directly with your creditors and payments for you
You get on with your life without the burden of debt
After your Debt Arrangement Scheme is finished, you will be debt free
If you’re experiencing financial difficulties and are assessing your options to repay your debt, you may have considered that a consolidation loan is the best way to consolidate debt for you. But don’t discount the options of Trust Deeds, Debt Arrangement Scheme, and alternatives because there are circumstances where one of these debt management tools … Continued
