Debt arrangement scheme if you have mortgage arrears

If you have mortgage arrears, you may be able to apply for a debt payment programme under the debt arrangement scheme. This would give you time to pay off your debts at a rate that is affordable to you.

What is the debt arrangement scheme?

The debt arrangement scheme (DAS) helps people repay their debts over a period of time and at a rate that they can afford. You can apply for a debt payment programme under the DAS if you have one or more debts and you are having difficulty keeping up with your payments.

What is a debt payment programme?

If you are on a debt payment programme, instead of making lots of payments to different lenders every week or every month, you can make one single payment to a payment distributor instead. The payment distributor will forward payments to each of your lenders. Your payment will be split in relation to the size of your debts. For example if you have a loan of £10,000 and another for £5,000, the first lender will receive a larger payment than the second lender.

If your application for a debt payment programme is successful and you keep up with your payments, your lenders will not be allowed to take further action (such as arresting your wages) to enforce the debt.

Who can apply for a debt payment programme?

You can't apply directly to the scheme. Instead, you need to ask a money adviser to make an application on your behalf. You can find details of money advisers in your area at the Debt Arrangement Scheme website.

Your application for a debt payment programme will be considered by a DAS administrator. They will ask your creditors if they consent to you taking part in the programme. However, all the creditors may not need to give their consent in order for you to proceed with the programme.

Can I apply for a debt payment programme if I have mortgage arrears?

You can apply for a debt payment programme if you have mortgage arrears. However, a debt payment programme will only be suitable if you can continue to meet your regular mortgage payments, as only your arrears will be covered in the programme. So if you fall behind with your regular mortgage payments then your lender can still ask the court for an order allowing them to repossess your home.

If your lender takes your case to court, the court may grant an order allowing your lender to repossess your home. However, the court cannot grant an order about payment of your mortgage arrears, as these are already being paid through the debt arrangement scheme.

My circumstances have changed

If your circumstances have changed and you want to reduce or increase you payments, then you can apply for a variation to your debt payment programme.

You can also apply for a six month payment holiday if your, or someone in your household, disposable income has reduced by 50% or more due to any of the following:

  • unemployment
  • a change of job
  • maternity or paternity leave
  • illness
  • divorce
  • the death of a person with who the debt is shared.

You can apply directly for a variation of payment amount or payment holiday, but it is best to discuss these options with your money adviser first.

I'm worried about repossession because I haven't been making payments to my debt payment programme

If you miss two payments, or the equivalent of two payments, then your debt payment programme could be revoked. This means that your lenders can take action against you to reclaim money owed, including repossessing your home.

However, you may still be able to negotiate another repayment arrangement with your lender.

The important points

  • You might find it helps to manage your mortgage arrears if you apply for a debt payment programme through a debt arrangement scheme (DAS).
  • A debt payment programme means you make one payment and a payment distributor transfers payment to your lenders.
  • You need an adviser to apply on your behalf if you want to use a debt arrangement scheme to repay your debts.
  • If you miss two payments or the equivalent of that amount, your debt payment programme could be revoked.

Speak to a Shelter Scotland adviser

Call Shelter Scotland's free housing advice helpline

0808 800 4444
9am-5pm, Monday to Friday

Email an adviser

You can also email a housing adviser. We aim to respond within three working days.

Was this page helpful?