Debt arrangement schemes

The debt arrangement scheme allows debtors with at least two outstanding debts who are struggling to pay back money borrowed time to pay off their debts at an affordable rate.

This content applies to Scotland

About 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]

Making an application

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

Consent from creditor

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]

Debt arrangement schemes and repossession

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.

Clients with existing debt arrangement schemes

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]

Last updated: 27 November 2019

Footnotes

  • [1]

    part 1 Debt Arrangement and Attachment (Scotland) Act 2002 as amended by The Debt Arrangement Scheme (Scotland) Regulations SSI 2011/141

  • [2]

    s.3 The Debt Arrangement Scheme (Scotland) Regulations SSI 2011/141

  • [3]

    reg.7 The Debt Arrangement Scheme (Scotland) Regulations SSI 2011/141

  • [4]

    reg.23 The Debt Arrangement Scheme (Scotland) Regulations SSI 2011/141

  • [5]

    s.4 Debt Arrangement and Attachment (Scotland) Act 2002 as amended by s.33(5) The Debt Arrangement Scheme (Scotland) Regulations SSI 2011/141

  • [6]

    part 7 The Debt Arrangement Scheme (Scotland) Regulations SSI 2011/141