Debt arrangement schemes

If a debtor is struggling to repay two or more debts, s/he may be able to apply for a debt payment programme through the debt arrangement scheme. [1]

A debt payment programme is part of a statutory scheme that allows repayment of multiple debts by regular single payments to a single point. These payments are then distributed to creditors in instalments.

Debt for the purpose of a debt payment programme means only mortgage arrears. The amount actually borrowed is not included in the programme.[2]

Borrowers must be referred to the scheme by a DAS-approved money advisers.[3]

The DAS administrator will contact each creditor involved in the payment arrangement, to request their consent. If a creditor does not respond within 21 days s/he will be deemed to have consented to the scheme. [4]

During participation in the debt arrangement scheme, most kinds of enforcement action against the debtor will be prohibited.[5]

A lender can still recover possession of a property, but it is a condition of taking part in a debt payment programme that the regular mortgage payments are met as they fall due. Any mortgage arrears should have been included in the programme. In this case, lenders should not need to take action to recover possession.

Advisers will also need to check whether or not a debt payment programme is already in place when dealing with people who have multiple debts. Such an arrangement may need to be varied if their circumstances have changed, or indeed if mortgage arrears have been overlooked.[6]