It’s been a while since a new debt solution has appeared on the horizon to help overloaded borrowers in Scotland. It often feels like the only options open to Scottish residents who face serious financial problems are either a Trust Deed or sequestration. However, if you’ve been holding off sorting out your problems because you believe with a little more time you can pay back what you owe in full without resorting to serious insolvency-based measures, there is finally a debt management tool to help you. It’s called the Debt Arrangement Scheme (DAS) and it’s helped thousands of individuals with two or more debts turn their lives around. How does a Debt Arrangement Scheme work? The basic feature of the DAS is a Debt Payment Plan (DPP). With the help of a specially trained money advisor, you set up a DPP based on your current financial circumstances and they approach your creditors to gain approval for it. It differs from many other debt repayment options in that the total amount of money you have available for creditors is split fairly between them, although the offer made to your creditor is less than what you are contracted to pay them. Then you wait for 21 days to see if your creditors get back to you with a response. If you hear nothing, your money adviser will assume they are happy to go ahead with your new payment plan. However, even if some of your creditors disagree, you don’t have to worry because it doesn’t necessarily mean your Debt Payment Plan won’t be approved. As long as your payment plan is fair and reasonable, your money advisor will go ahead and apply for approval to the Debt Arrangement Scheme administrator. The only time a creditor’s objection could be upheld is it is obvious you simply cannot pay anything at all and should be sequestered or if you have a lot of land or property assets that should be liquidated. What happens after the DAS has been approved? Once approval is granted, you make a single payment every month to a payment distributor, who will split the payment and ensure that each creditor receives their payment on time. Your creditors cannot arrest your earnings and cannot make you bankrupt. If your circumstances change, the Debt Arrangement Scheme is flexible… DAS has been set up to be extremely flexible. If circumstances take a change for the worse, (or even for the better) your money advisor can arrange to decrease or increase your payments. What about mortgage arrears? The Debt Arrangement Scheme will cover mortgage arrears, but you must still be able to meet your regular monthly mortgage payments. A normal monthly mortgage payment cannot be included in your DPP. However, It is still possible for your mortgage lender to take you to court to try to force repossession. You will need to apply for a section 2 order to delay the process, which will give you more time to pay off the arrears. Because of your Debt Payment Plan, the courts will take your efforts to pay them back into account and it is not allowed to grant a payment order on the arrears as they are already been paying through the Debt Arrangement Scheme. What about family and friends? Can they find out about you being on the DAS? Each DPP is entered into a publicly available Debt Arrangement Scheme register, so it is possible for people you know to find out that you have a DPP. However it isn’t the sort of database you just stumble across – your friends or family would have to know to go there and specifically look for your name. It is very remote that they will find the database and look through it for you. The register is however well known about by lenders who have access to it, so if you apply for loans or credit cards in the future you may find your DPP affects your credit rating.