Debt arrangement scheme if you have mortgage arrears
This content applies to Scotland only.
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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 two 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 contact details for a money adviser in your area at the moneyscotland 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 they fall, as only your arrears will be covered in the programme.
Even if you keep up to date with your payments, your lender can still ask the court for an order allowing them to repossess your home. However, if you apply for a section 2 order to delay the repossession and give you time to pay off your arrears, the court will take your debt payment programme into account.
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 situation has changed and I'm having difficulty making payments to my debt payment programme
If you are having difficulty making payments to your debt payment programme because your circumstances have changed, you may be able to get your payments reduced. This may be the case, for example, if you have had a baby or are unable to work because you are ill.
I'm worried about repossession because I haven't been making payments to my debt payment programme
If you don't keep up with your payments to your debt payment programme, your mortgage lender or secured loan lender, can take action to try to repossess your home.
However, you may still be able to negotiate another repayment arrangement with your lender or apply for a section 2 order to delay or prevent your home from being repossessed.
