Category: DAS

Breathing Space & Statutory Moratoriums

Posted on by Craig Stocks
As the country continues to cope with the financial impact of the recent pandemic and with the rising cost of living impacting the lives of so many, a significant number of people now need to deal with the impact of problem debt all across the United Kingdom. A new ‘Breathing Space’ scheme has begun in England and Wales, aimed at helping people in problem debt from further interest and charges. Officially known as the Debt Respite Scheme, it freezes interests and charges for a period of 60 days, and halts debt collection to allow people more time to come up with a longer-term solution to their unaffordable debt. People in England & Wales can apply for the break, which lasts for up to 60 days, to prevent them from falling into a spiral of debt. The UK Treasury has estimated that up to 700,000 people could be helped by the scheme in its first year and hopes to follow up on the Debt Respite Scheme with a ‘Statutory Debt Repayment Plan in 2021, a solution that has long been spoken about, with similar characteristics to that of the Scottish Debt Arrangement Scheme (DAS) which has been in place since 2004, albeit with revisions over the years since its launch. People receiving treatment for mental health issues can get more help. The separate system for those receiving mental health crisis treatment lasts for the length of that treatment, plus another 30 days. People in Scotland with unaffordable debt in Scotland already have an equivalent to ‘Breathing Space’ known as a Statutory Moratorium, with a low and grow debt payment plan being another solution allowing those struggling with unmanageable debt as a result of a loss of income due to the pandemic, to make minimum or token payments through the Debt Arrangement Scheme (DAS) with a view to increasing them when their income returns to a normal level.

Statutory Moratorium Scotland

If you are worried that you may be at risk of Sheriff Officers taking action against you, a Statutory Moratorium (Scotland) is a legal instrument that you can use to protect yourself. Statutory Moratoriums also protect you from creditors making an application for you to be Sequestrated. The Statutory Moratorium gives you 6 weeks protection from a Sheriff Officer taking action against you, such as arresting your bank account or freezing your income. If you are worried a Sheriff Officer may freeze your bank accounts, or arrest your wages, then a Statutory Moratorium may be suitable for you. It can also stop possessions like cars, or any other valued asset item, being attached. The process is designed to allow breathing space for anyone struggling with their debts, so they can consider their options, regardless of whether those options are the Debt Arrangement Scheme, a Trust Deed or Bankruptcy (Sequestration). Essentially, a Statutory Moratorium can be used to buy you time, until the pandemic is over so that you can review your options at a later date when you have more information on your future ability to pay.  

What was the Low and Grow DAS?

The Debt Arrangement Scheme (DAS) is a formal debt solution in Scotland that has seen significant growth in the last year. Such has the growth in the use of the Debt Arrangement Scheme been in Scotland, that the number of people using the solution grew 18% in 2020 against 2019, according to official Scottish government statistics. Under existing affordability rules, the solution can only be put in place if an individual has the ability to be able to make regular repayments from their income. However, from early 2021, it was made possible for those struggling with unmanageable debt as a result of a loss of income due to the pandemic, to make minimum or token payments through DAS with a view to increasing them when their income returns to a normal level. Low and Grow Debt Payment Plans, or Low and Grow DAS as they were also referred to, were a tool rolled out to help people with unaffordable debts in Scotland during Covid times. For many Scottish residents, this helps to provide vital breathing space and a welcome opportunity to take control of household finances. UK government figures show that after the first lockdown, over 700,000 Scots had been furloughed under the UK job retention scheme, with many households struggling with debt, the newly created Low and Grow debt payment plan should give welcome relief to those who are in a position to repay their debt over a longer period of time but require a short term solution in the intermediate period before their regular income returns to normal. When a person repays their debts through DAS, interest and contractual charges are frozen. DAS lifts wage arrestments; stops court action including Sequestration (bankruptcy in Scotland) and requires one monthly payment that is distributed to all creditors on their behalf. You can find out more the advantages and disadvantages of the Debt Arrangement Scheme and alternative formal solutions such as Trust Deeds by calling Trust Deed Scotland on 0141 221 0999. Jamie Hepburn, Minister for Business, Fair Work and Skills said: “I am acutely aware of the impact that the pandemic and necessary restrictions are having on household finances. In this uncertain time, I would encourage anyone experiencing problems with debt to seek advice as soon as they can. “DAS is an enormously valuable tool to help manage problem debt and the Scottish Government has worked closely with the advice sector and other stakeholders to introduce greater flexibility in the operation of the scheme to assist those impacted by the pandemic.” Trust Deed Scotland® said: “Getting early, tailored debt advice remains crucial as the country continues to cope with the pandemic. Every day we speak to people who are feeling overwhelmed by the challenges of lockdown, homeschooling, poor mental health, caring for elderly relatives, reduced income and many are feeling overwhelmed with their debt. Many of those individuals have had a sudden change in their circumstances and are prevented from repaying their debts due to a short term inability to make repayments. That short term problem can sometimes lead to a situation where the person can never catch up and a debt solution is required. We welcome the newly created Low and Grow debt payment plan and urge people struggling with problem debt to seek debt help now.”

Debt Arrangement Scheme vs. Minimal Asset Process

Minimal Asset Process (MAP) is a route into Sequestration (bankruptcy) aimed at individuals who have no, or little assets and who also have little, or no income. DAS is not insolvency, it is the only statutory debt management plan in the UK. In order to find out which option suits an individual better, it is essential to seek advice before making a decision. Both solutions, in addition to Trust Deeds, are effective ways of formally dealing with unaffordable debts. While it’s true that many people currently furloughed, or claiming Universal Credit may loosely qualify for both, a clear understanding of your personal circumstances, assets, future ability to repay debts, and/or desire to rebuild a credit rating need to be correctly assessed. Bankruptcy has always carried the greatest stigma and many people that we’ve spoken to over the years have struggled on for years to avoid being made bankrupt but the reality is that in the right situation, the Minimal Asset Process route and Full Administration Sequestration are effective tools that have helped thousands of people rebuild their lives through the years.

Tailored Support

Tailored Support effectively replaced payment breaks, which are now closed to new applications and are scheduled to end by 31 July 2021 for those already using them. Compared to the previous payment breaks, Tailored Support is more ambiguous in its definition, it’s down to your lender to advise on what they can offer you including a (further) payment deferral a (further) period of reduced payments, waiving or reducing interest, agreeing on a repayment plan and/or refinancing your credit agreement.

Advice on your options

To find out more about managing your money and getting free advice, visit Money Advice Service, an independent service set up to help people manage their money. Trust Deed Scotland® can give you advice on Low and Grow DAS but also advice on applying for a Statutory Moratorium and our experienced team, offer debt advice that is…
  • Non-Judgemental – Our friendly, helpful team want to help find a solution that suits your needs.
  • Confidential – We do not share your details with any other companies. Your data is safe and secure.
  • Experienced – [volume] people helped and over [reviews] five-star reviews on Trustpilot.
  • Tailored – Pros and cons of all formal solutions explained.

Apply for a DAS

You can find out more about applying for a low and grow DAS by using our Trust Deed Wizard tool or by calling us on 0141 221 0999. Our experienced debt advisors provide tailored debt advice outlining the risks and benefits of the Debt Arrangement Scheme and other formal Scottish debt solutions including Protected Trust Deeds and Sequestration.

What is a DAS?

Posted on by Craig Stocks
What is a DAS? DAS stands for Debt Arrangement Scheme and is a statutory debt solution with many of the same benefits as a Trust Deed. The Debt Arrangement Scheme lets you apply for a Debt Payment Programme (DPP) which helps you repay your debts in full by making affordable monthly payments. Interest and charges are frozen from the date of your application being made. The Debt Arrangement Scheme is only available to people living in Scotland, and there is no equivalent solution for the rest of the UK – however, a shorter term solution is called the ‘Debt Respite Scheme (Breathing Space) ‘ and was introduced in May 2021. This is more similar to a Statutory Moratorium in Scotland. The Debt Respite Scheme offers people in the rest of the UK a period of 60 days respite from their creditors. The Debt Arrangement Scheme was first introduced in 2004 to help Scottish residents stay in control of escalating debt without having to follow insolvency procedures.

Who is eligible for a DAS?

To be eligible for a DAS, you would typically meet the following basic criteria:
  • Have one or more debts
  • Not be subject to sequestration or any other insolvency procedure
  • Have a reasonable amount of surplus income after paying priority bills and household expenses
  • Be resident in Scotland
There is no set minimum level of debt you need to have in order to be eligible for the DAS, however, this solution is designed for people who are unable to manage their current debt repayments. All unsecured debts can be covered by a DAS, for example: Credit and store cards, personal loans, overdrafts and catalogue debts. You can also include mortgage, secured loan and rent arrears (but not ongoing payments). A few debts cannot be included in a DAS Scotland including fines imposed by any court and any liability due to fraud. In order to work out whether a DAS is worth applying for, we would always recommend that you speak to an experienced debt advisor and work out the pros and cons, after establishing what your situation looks like based on your affordability, lifestyle and needs.

What is a DPP?

The term DPP stands for Debt Payment Programme – this is the repayment plan agreed between you and your creditors under the terms of the Debt Arrangement Scheme. Your Debt Payment Programme is arranged by a qualified money advisor, who will help you to propose an acceptable repayment plan to your creditors, set at an affordable level, based on your circumstances. Although at the time of your application, interest and charges on your debts are frozen under DAS – you will be required to pay back what you owe in full.  

What are the benefits of a DAS?

  • Only pay what you can afford
  • Freezes interest and charges
  • Protects your home and car
  • Reduces creditor contact
  • Monthly payments can be adjusted if your circumstances change
  • DAS can stop earnings arrestments
  • You can take payment breaks from a DAS if required
  • Joint DAS applications can be made by couples/spouses who live together
  • DAS does not involve court proceedings
  • If creditors do not accept the proposal but are owed up to 10% of the total debt, then the DPP will be automatically approved
  • Creditors that do not accept the proposals and are owed more than 10% of the total debt can be forced to comply with the arrangement if it is judged to be “fair and reasonable” by the DAS Administrator
  • The payment made does not have to offer the full disposable income, a reduced amount can be offered to allow the individual more affordability for their general living expenses

What are the risks of a DAS?

  • You must repay the full amount that you owe, no debt is written off
  • If you do not keep up with your DPP payments, your DAS can be revoked
  • DAS will have a negative effect on your credit rating
  • Once in a DPP, your details will appear on the public DAS register for the plan’s duration
  • You will not usually be able to access further credit whilst in a DPP
  • A DPP may be rejected by creditors and deemed not ‘fair and reasonable’ by the DAS Administrator

What are the alternative solutions to a DAS?

A DAS is designed to help you pay back your debt at regular, manageable intervals – without the threat of legal action hanging over you, they can also be used by individuals and businesses who are struggling with unaffordable debts. However, that doesn’t mean that the Debt Arrangement Scheme is right for you. On some occasions, a Scottish Trust Deed may prove to be a more fitting solution for you, depending on your circumstances. Trust Deeds may allow you to write off some of your unaffordable debt in a quicker timescale. However, your assets such as your home require more scrutiny in order to establish your eligibility to potentially qualify for a Scottish Trust Deed. Full Administration Sequestration or Minimal Asset Process Sequestration are two other formal solutions to debt, while you may also consider informal solutions such as equity release, or a debt consolidation loan. In any case, our advice is always to talk about your situation with an experienced debt advisor, who can not only explain what is a DAS, its advantages and disadvantages, but also give you tailored debt advice on all available alternative solutions to a DAS.

Who can set up my DPP?

Trust Deed Scotland® are experienced debt advisers and provide tailored debt advice on all available debt solutions in Scotland. We make sure that our clients get personalised debt advice based on their affordability, lifestyle and needs. If you are struggling with your monthly debt repayments but feel that you could repay what you owe in full, given sufficient time to do so, then the Debt Arrangement Scheme may be a good option for you. Find out how long it takes to set up DAS and get started now by trying our online form, or by calling us on 0141 221 0999.

Debt Arrangement Scheme: What happens next?

Posted on by Craig Stocks
What happens next in the Debt Arrangement Scheme application process? If the individual chooses DAS, the individual commits to a debt payment programme (DPP) based on all their creditors receiving regular payments of their share of whatever the individual can reasonably afford each month. A DPP can last for any reasonable length of time (normally up to 10 years), depending on the amount of debt and how much the individual can pay. A DPP under DAS is proposed to creditors in the following way:
  • Proposals are sent to all the creditors and they have 21 days to respond if they wish to object to them.
  • If no creditors object, then the DPP is approved automatically.
  • If creditor(s) object and they are owed up to 10% of the total debt, then the DPP application will be automatically approved.
  • If one or more creditors object and they are owed more than 10% of the total debt, then the DPP can still be approved if it is judged to be “fair and reasonable” by the DAS Administrator (Accountant in Bankruptcy).
  • It is possible that the circumstances may change whilst the individual is repaying the debts under DAS, in which case the DPP may be varied to accommodate this change without penalty.
  • The continuing money adviser will help the individual produce an alternative debt payment programme based on the current situation and send this for approval.
  • The same 10% rule (described above) applies for approval of variations to already approved DPPs
  • So long as the amended proposal is fair, the creditors will not be able to stop the debt payment programme being approved.
  • If the DPP is refused, the individual has the right to appeal against the decision. However, the individual may need to look at other options, such as a Protected Trust Deed or Sequestration.
Only qualified money advisers can advise on and manage a DPP under DAS. A money adviser can be employed in the free advice sector, such as with the local Citizens Advice Bureau or local authority money advice team or the Money Adviser can be an insolvency practitioner (or a suitably qualified member of his/her staff). Once the DPP is approved, the individual only has one affordable payment to make, therefore, their monthly outgoings should be drastically reduced and the pressure from creditors should stop.

How much does a DAS cost?

There are no fees payable by an individual entering into the DAS. This is the same for all individuals whether they use a private sector firm (e.g. Harper McDermott Ltd) or a public sector organisation (e.g. CAB or local authority Money Adviser). The costs of administering the scheme are borne by the creditors i.e. from every £ received into the scheme, 22p is used to pay for the costs; this 22p is paid to the DAS Administrator (2p) and the Money Adviser (20p). The remaining amounts are distributed amongst all creditors on a pro rata basis and a successfully completed DPP deems all debts to be repaid in full.

Debt Arrangement Scheme Case Studies

Debt Arrangement Scheme Scenario 1 Married Couple, with 2 young children. Mr is in full time employment and Mrs is unemployed. Mr has credit card debts totalling £7k, Mrs has debts of £4k and there is £5k of joint council tax arrears (i.e. total household debts of £16k) They had been paying minimum payments on their debts, totalling around £300 per month, which was just affordable but due to high interest rates the outstanding balances were reducing very slowly. Unfortunately, Mr’s wages were then arrested for non-payment of council tax. As a result of this, they could afford only £150 per month for all their other debts, and they fell into arrears. Mr & Mrs Y set up a joint DAS. As the earnings arrestment is lifted upon approval, they can afford to pay £300pm. All further interest and charges are frozen and their debts will be repaid in full in around 4.5 years. Debt Arrangement Scheme Scenario 2 Single man in full-time employment. Owns home worth £140k, with outstanding mortgage £80k. Owns car worth around £7k. Did not wish to lose car or sell his home as has elderly parents living nearby, who require help getting around. Had unsecured debts totalling £25,000 due to previous business failure. He could afford to pay £350 pm to his unsecured debts and attempted to set up a payment arrangement with his creditors on this basis through a Debt Management Company. Unfortunately, one former business supplier is owed £8k and is not willing to agree to any payment proposals via the informal DMP, insisting that the individual must pay the full debt or face legal action. The creditor is aware of the equity in the house and the debtor fears that this creditor may eventually seek to have him made bankrupt and force a sale of his home. He has tried to re-mortgage to release funds but was rejected. Solution: Application for a DPP under DAS is made, paying £350pm to his creditors. This means his debts will be fully repaid within 6yrs and his home and car will remain protected. The difficult creditor objected to the proposals, but they were deemed “fair and reasonable” by the DAS Administrator. This means that the creditor was forced to accept the arrangement and is no longer able to take any enforcement action as long as the individual successfully completes his DPP. Also see Scottish Trust Deed: What happens next.

Debt Arrangement Scheme Advice

You can get debt advice today by calling Trust Deed Scotland® on 0141 221 0999 or by completing our Trust Deed Wizard® form. Our experienced advisors give friendly, confidential and non-judgemental debt advice that covers the advantages and disadvantages of Scottish Trust Deeds and all other formal debt solutions open to Scottish residents.

Low And Grow DAS

Posted on by Craig Stocks
As the country continued to cope in the wake of the Covid pandemic, many people needed to deal with the impact of debt. The Debt Arrangement Scheme (DAS) is a formal debt solution in Scotland that has seen significant growth in the last decade Such has the growth in the use of the Debt Arrangement Scheme been in Scotland, that the number of people using the solution grew 18% in 2020 against 2019, according to official Scottish government statistics. Under existing affordability rules, the solution can only be put in place if an individual has the ability to be able to make regular repayments from their income. From 11 January 2021, it was possible for those struggling with unmanageable debt as a result of a loss of income due to the pandemic, to make minimum or token payments through DAS with a view to increasing them when their income returned to a normal level.

What was a Low and Grow DAS?

Low and Grow Debt Payment Plans, or Low and Grow DAS as they are also referred to, were a tool developed during Covid times to help people with unaffordable debts in Scotland. For many Scottish residents, they provided vital breathing space and a welcome opportunity to take control of household finances. The first few months of the year are typically the time of year when more people need help with their unaffordable debts. UK government figures showed that after the first lockdown, over 700,000 Scots had been furloughed under the UK job retention scheme “furlough” with many households struggling with debt, the then-created Low and Grow debt payment plan was intended to welcome relief to those who are in a position to repay their debt over a longer period of time but require a short term solution in the intermediate period before their regular income returns to normal. When a person repays their debts through DAS, interest and contractual charges are frozen. DAS lifts wage arrestments; stops court action including Sequestration (bankruptcy in Scotland) and requires one monthly payment that is distributed to all creditors on their behalf. You can find out more the advantages and disadvantages of the Debt Arrangement Scheme and alternative formal solutions such as Trust Deeds by calling Trust Deed Scotland on 0141 221 0999. Jamie Hepburn, Minister for Business, Fair Work and Skills said at the time: “I am acutely aware of the impact that the pandemic and necessary restrictions are having on household finances. In this uncertain time, I would encourage anyone experiencing problems with debt to seek advice as soon as they can. “DAS is an enormously valuable tool to help manage problem debt and the Scottish Government has worked closely with the advice sector and other stakeholders to introduce greater flexibility in the operation of the scheme to assist those impacted by the pandemic.” Speaking back in 2021, Trust Deed Scotland® said: “Getting early, tailored debt advice remains crucial as the country continues to cope with the pandemic. Every day we speak to people who are feeling overwhelmed by the challenges of lockdown, homeschooling, poor mental health, caring for elderly relatives, reduced income and many are feeling overwhelmed with their debt. Many of those individuals have had a sudden change in their circumstances and are prevented from repaying their debts due to a short term inability to make repayments. That short term problem can sometimes lead to a situation where the person can never catch up and a debt solution is required. We welcome the newly created Low and Grow debt payment plan and urge people struggling with problem debt to seek debt help now.”

Debt Payment Programmes under the Debt Arrangement Scheme vs. Minimal Asset Process

Minimal Asset Process (MAP) is a route into Sequestration (bankruptcy) aimed at individuals who have no, or little assets and who also have little, or no income. DAS is not insolvency, it is the only statutory debt management plan in the UK. In order to find out which option suits an individual better, it is essential to seek advice before making a decision. Both solutions, in addition to Trust Deeds, are effective ways of formally dealing with unaffordable debts. While it’s true that many people currently furloughed, or claiming Universal Credit may loosely qualify for both, a clear understanding of your personal circumstances, assets, future ability to repay debts, and/or desire to rebuild a credit rating need to be correctly assessed. Bankruptcy has always carried the greatest stigma and many people that we’ve spoken to over the years have struggled on for years to avoid being made bankrupt but the reality is that in the right situation, the Minimal Asset Process route and Full Administration Sequestration are effective tools that have helped thousands of people rebuild their lives through the years.

DAS or MAP

If you are struggling to repay your debt and feel that MAP is too severe, or a formal debt solution like DAS, Trust Deeds doesn’t seem like an arrangement that you want to consider, there are other tools that you can explore in the short term, including a Statutory Moratorium.

Statutory Moratorium Scotland

If you are worried that you may be at risk of Sheriff Officers taking action against you, a Statutory Moratorium (Scotland) is a legal instrument that you can use to protect yourself. Statutory Moratoriums also protect you from creditors making an application for you to be Sequestrated. The Statutory Moratorium gives you 6 months of protection from a Sheriff Officer taking action against you, such as arresting your bank account or freezing your income. If you are worried a Sheriff Officer may freeze your bank accounts, or arrest your wages, then a Statutory Moratorium may be suitable for you. It can also stop possessions like cars, or any other valued asset item, being attached. The process is designed to allow breathing space for anyone struggling with their debts, so they can consider their options, regardless of whether those options are the Debt Arrangement Scheme, a Trust Deed or Bankruptcy (Sequestration). Essentially, a Statutory Moratorium can be used to buy you time, until the pandemic is over so that you can review your options at a later date when you have more information on your future ability to pay. However, bear in mind that a Statutory Moratorium is not a long-term solution.

Payment Breaks and Tailored Support

You may be able to apply for payment breaks directly with your lenders, at their discretion. This will generally give you three months of payment breaks per application, this process becomes known as Tailored Support. Tailored Support apply to a range of products from credit cards and loans to mortgages and car finances. Applying for a payment break under tailored support will most likely impact your credit rating to some extent. As Tailored Support is more ambiguous in its definition, it’s down to your lender to advise on what they can offer you including a (further) payment deferral a (further) period of reduced payments, waiving or reducing interest, agreeing on a repayment plan and/or refinancing your credit agreement.

Advice on your options

To find out more about managing your money and getting free advice, visit Money Helper, an independent service set up to help people manage their money. Trust Deed Scotland® can give you advice on DAS but also advice on applying for a Statutory Moratorium and our experienced team, offer debt advice that is…
  • Non-Judgemental – Our friendly, helpful team want to help find a solution that suits your needs.
  • Confidential – We do not share your details with any other companies. Your data is safe and secure.
  • Experienced – [volume] people helped and over [reviews] five-star reviews on Trustpilot.
  • Tailored – Pros and cons of all formal solutions explained.

Apply for a formal debt solution

You can find out more about applying for a formal debt solution by using our online form, or by calling us on 0141 221 0999. Our experienced debt advisors provide tailored debt advice outlining the risks and benefits of the Debt Arrangement Scheme and other formal Scottish debt solutions including Protected Trust Deeds and Sequestration.

Rent Arrears Debt Warning by Resolution Foundation

Posted on by Craig Stocks
Almost half a million people across the UK have fallen behind on rent or mortgage payments as a result of the coronavirus pandemic, reports the Resolution Foundation. The Resolution Foundation is a UK think-tank that is focused on improving the living standards of those on low-to-middle incomes. Founded in 2005, the Foundation’s established work programme includes incomes and inequality; jobs, skills and pay; housing, wealth and debt; tax and welfare; public finances and the economy. The study into rent arrears found that as many as 450,000 out of an estimated 750,000 people in arrears on housing payments and reporting on the findings, Lindsay Judge a Senior Research and Policy Analyst who leads on housing, advised that many families had suffered ‘huge hits’ to their household earnings and that few have savings to fall back on. 300,000 people are thought to have dependent children. “To make matters worse, measures that could ease the pressure, such as discretionary housing payments from local authorities and negotiated rent reductions from landlords, are not getting through to those that need them.” The Resolution Foundation added: “Both benefit cuts and the end of furlough are pencilled in for the spring, either of which will strain family incomes further. Likewise, unemployment looks set to rise, rather than fall, through 2021, potentially driving up arrears further still.” Trust Deed Scotland said “We speak to hundreds of people every month and most have voiced concerns about their unaffordable debts which typically include the likes of credit cards, catalogues and unsecured loan debt. However, with a number of people having been made redundant in the last year, or who are currently furloughed as part of the Job Retention Scheme – we’ve seen many instances of social and private tenants not being able to afford the repayment of their rent. While there is currently a ban on evictions in Scotland, we’re concerned about the longer-term impact to those individuals’ finances caused by building up rent arrears, as well as other debts, with no clear end in sight. As a result of this, many are falling into a cycle of debt where they are using credit to pay credit and incurring further debt to pay for general living expenses, including priority bills. If you are struggling with unaffordable debt and have dependent children – we also urge you to apply for the School Age Payment award of £250 before the deadline ends on 28th February. The one-off £250 Payment is currently open to families with a child born between 1 March 2015 and 29 February 2016. It can be used for anything from a warm coat to books and toys.”

Support for Scottish tenants with Rent Arrears Debt?

In Scotland, increased support for Scottish tenants in danger of developing rent arrears debt was introduced in December 2020 in the shape of a government-funded Tenant Hardship Loan Fund. The government have set aside £10m for the Tenant Hardship Loan Fund, which is an interest-free loan and is designed to help people who have had their finances or employment impacted by the coronavirus pandemic and do not have other means of housing support. Loans are available for private and social tenants up to a maximum of nine months’ rent costs covering rent arrears and future rent, where those arrears have arisen since 1 January 2020. However, the tenant hardship loan fund will not be available where a tenant had rent arrears before this date. The Tenant Hardship Loan can include up to a maximum of three months of future rent payments as part of the nine-month total. The lending arrangement provides an additional short-term offer that supports tenants to manage rent arrears and helps them to come back into paying their rent. Loan repayments under the tenant hardship loan scheme will be deferred for six months as standard and repaid over a five-year period. The Scottish Government hopes that this helps solve any issues with the continuing uncertainty around the impact of the Coronavirus pandemic. However, as part of the Scottish Government’s commitment to responsible lending, the Tenant Hardship Loan Fund offers will be subject to an affordability assessment. The affordability assessment looks at the applicant’s incomings and outgoings to check whether the applicant has enough surplus income, after other costs, to make the loan payments. Please note: Applications for the Tenant Hardship Loan Fund were discontinued for new applications in December 2021.

Can I include Rent Arrears Debt in a Trust Deed?

The legal position is that all rent arrears should be included in your Trust Deed. However, to avoid any issues with your landlord, especially if you are a private tenant, then you should take advice before considering entering into a Trust Deed whilst you have rent arrears.

Rent Arrears Debt and the Debt Arrangement Scheme

If you have build up rent arrears debt, you may be able to apply for a Debt Payment Programme (DPP) under the Debt Arrangement Scheme (DAS). A DPP, which is a formal debt solution, will give you time to pay off your rent arrears debt at a rate you can afford, and include all other unaffordable, unsecured debts that you are struggling to afford such as credit cards, unsecured loans and council tax arrears. In addition to being able to include your rent arrears debt and credit card debts or other debts that you owe – any interest and charges on those debts are legally frozen, and if you’re receiving distressing telephone calls, text messages and letters threatening you with visits from Sheriff Officers  – you can reduce and eventually stop this type of contact with an approved Debt Payment Programme. The Debt Arrangement Scheme has risks and benefits just like Protected Trust Deeds which have advantages and disadvantages. The Minimal Asset Process route to Sequestration may also be a suitable formal solution for people struggling with unaffordable debt. In order to find out what your options may be suitable for you, Trust Deed Scotland recommends talking to an experienced debt advisor and seeking tailored debt advice, based on your situation.

How to get Scottish Debt Advice today

If you’re worried about your finances and would like to take control of your unaffordable debt, you can contact Trust Deed Scotland on 0141 221 0999, or complete our Trust Deed Wizard tool for more information. As a leading provider of formal Scottish debt solutions including Trust Deeds, and the Debt Arrangement Scheme, our experienced debt advice team are able to work with you and offer tailored debt advice that puts you at the heart of the decision-making process.  

Debt Arrangement Scheme Reviews

Posted on by Craig Stocks
Alongside Trust Deeds, the Debt Arrangement Scheme is a formal debt management solution that takes advantage of Scottish government legislation to offer individuals and businesses a way out of debt in Scotland. Trust Deed Scotland recently reached a milestone of over 10,000 Trustpilot reviews and whilst many of those reviews were for the Protected Trust Deed solution, a growing number of those testimonials are also Debt Arrangement Scheme reviews. The Debt Arrangement Scheme is a formal solution that is superior to an informal Debt Management Plan in many ways, however, we always recommend discussing your circumstances with a qualified money advisor in order to understand your circumstances and provide you with balanced debt advice that is tailored to your personal requirements. You may then weigh up whether or not if a DAS is worth it, in the same way that you may ask yourself Is a Trust Deed right for me?

Debt Arrangement Scheme reviews on Trustpilot

Michael wrote of his DAS Scotland experience: “I watched an advertisement on the television for Trust Deed Scotland® and thought I would go to their website and see if they could help me with debt problems. By filling in a simple form first on the Trust Deed Scotland website I got the ok for contact to be made by phone to talk about all my debt options and how a debt agreement to my creditors can be achieved. The people I have talked to at Trust Deed Scotland® are very good at explaining what the best options in my situation were. Things are progressing ahead now step by step until an agreement is signed by all parties and hopefully take a big weight off my shoulders about my debts .” das reviews Mags, who also entered into the Debt Arrangement Scheme through Trust Deed Scotland® on wrote on Trustpilot: “This company has saved my life. I didn’t know where to turn to. So kind and understanding of my situation and so easy to deal with. Trish was the first person I spoke to and she was great. Reassuring and so friendly. I’m still paying my debts but interest is frozen and I’m paying what I can afford” das reviews John, another client who entered into a DAS Debt Payment Programme wrote: “I cannot thank Peter enough for the help and support he gave throughout this process. Absolute first class.”

How do I apply to join DAS?

If you think that a debt payment programme through DAS might be the best option to help you with your debts, you need to get help from an approved money adviser such as Trust Deed Scotland. You cannot apply for a DAS by yourself. As an approved money advisor, we have been authorised by the Accountant in Bankruptcy (AiB) to apply for debt payment programmes on our client’s behalf through DAS. The first thing that an approved money adviser will do is to look at all your circumstances and help you to decide on the best debt repayment option for you.

Can I take out further credit in a DAS?

You can get up to £2,000 credit whilst you are in a debt payment programme under the terms of the Debt Arrangement Scheme in Scotland, unless you already owe £1,000 on debts which are not included in the Debt Payment Programme. You need to be able to afford the ongoing payments to repay the new credit on top of your agreed DAS payments. If you cannot, your debt payment programme could be revoked. You are also permitted to get credit if one of the following special circumstances applies to you.
  • You need credit because you are responsible for reasonable funeral expenses.
  • You are also allowed to get credit if one of the following special circumstances applies to you.
  • Your DAS Administrator approves your credit and your debt payment programme is varied to help you to repay the extra credit.
  • You need credit for emergency repairs to your home.
  • Your credit was taken out before you joined DAS and was part of a cyclical loan agreement.
  • You incur a trade debt in the ordinary course of business.
You must tell the new creditor if you are in a debt payment programme currently and you get credit due to one of these circumstances. You will be expected to pay this at the agreed contracted rate. Your debt payment programme may be varied to take this into account.

Can I end my DAS early?

Your money adviser can ask creditors to accept less than the full amount of the money that you owed them when you started the debt payment programme. This is called offering a ‘composition’. If all your creditors accept this, it will end your debt payment plan and you will have no more to pay. This option is available to repay your debts early in a DAS to individuals and to sole traders, but it is not available in a business debt payment programme. An offer of composition can only take place after: You have paid 70% of the amount that you owed when the debt payment programme started; and You have made payments for a full 12 years (not including any payment breaks). Your DAS money advisor will record which creditors agree to the offer of composition. If a creditor does not respond to the offer within 21 days, they will be added to those creditors who agree to the composition. If all creditors (including those creditors who do not respond) accept the offer of composition, the money advisor will write to you to confirm that your debt payment plan has ended and they will tell your creditors. But, if all of your creditors do not agree to the offer, your DAS money advisor can still arrange a composition and alter your debt payment plan. They will take account of the agreements received and make a variation. Where a continuing money adviser is handling the administration of your case, they will write to confirm the result of the decision.

Apply to the Debt Arrangement Scheme

There are advantages and disadvantages to the Debt Arrangement Scheme, alongside the other main debt solutions in Scotland and you can get more advice on all solutions open you and apply for the Debt Arrangement Scheme by trying out our DAS Wizard tool. You can also call us on 0141 221 0999.

Is A DAS Worth It?

Posted on by Craig Stocks
Alongside Is A Trust Deed A Good Idea, many people ask Trust Deed Scotland® the question of Is A DAS worth it? Like Trust Deeds, the Debt Arrangement Scheme has its own advantages and disadvantages. However, it’s not always simply a case of looking at it as a DAS vs Trust Deeds argument as there are other options which may be beneficial for someone in financial difficulties such as Minimal Asset Process; a form of bankruptcy in Scotland aimed at individuals with no or little assets and without an income. Also see Full Administration Sequestration. There still remains the option of clearing debts using a debt consolidation loan, for example, typically secured against a person’s home. In some cases where a debt isn’t yet unmanageable, traditional forms of lending can be used to consolidate debt under a new credit facility. This is typically unlikely if you’ve already been refused credit due to poor or bad credit history, with a history of missed payments and default notices. Quite often an individual may be eligible for a DAS and a Trust Deed and it will come down to the person who has the debt to then make an informed decision on which solution they want to pursue, knowing any the key facts and hopefully, taking that decision after they have been given balanced and qualified advice.

DAS or Trust Deed? What is the best option?

DAS and Trust Deeds are both formal solutions to unaffordable debt, created by the Scottish government and set up and maintained by a licenced professional insolvency practitioner, or money adviser. There are many similarities between the plans, but which one is best for you will depend upon your individual circumstances.

Trust Deeds – How They Work

Trust Deeds are legally binding solutions for people who are struggling with problem debt. Once you’re in a Trust Deed, you will make a single monthly contribution towards your debts, based on what you can afford after essential living costs have been met. At the end of the Trust Deed term, any remaining unaffordable debt will be written off, giving you a fresh financial start.

DAS – How They Work

The Debt Arrangement Scheme is a government scheme designed to help people struggling with unmanageable debt. Under DAS legislation, you will begin a Debt Payment Programme (DPP), tailored to your individual circumstances. In the DPP, you will make a single payment towards your debts each month, based on what you can afford. Any interest, fees, or charges on your debt will be frozen to make clearing your debts easier with the DAS, and you will be afforded legal protection from creditors.

Trust Deeds – Length

Trust Deeds usually last for four years, but can sometimes last for five depending on the specifics of the case.

DAS – Length

The length of your DPP depends upon how much debt you have, and how much you can afford to pay towards it each month. According to research carried out by the governing body, the AiB in 2012, the average length of a DPP is 78 months – 18 months longer than a typical Protected Trust Deed term. An individual’s Debt Payment Programme will not usually last longer than 10 years under the Debt Arrangement Scheme. A Small Business DAS, would not last any longer than 5 years typically.

Trust Deeds – Debt Amount

To be eligible for Trust Deeds you would have £5,000 or more of unaffordable, unsecured debt, owed to at least two creditors. A creditor is anyone you owe money too, in an unsecured arrangement. E.g. credit cards, bank loans and catalogues. You would be resident in Scotland, and be able to afford a monthly contribution towards your debts. The Scottish government reported that in 2019, the average debt amount for Trust Deeds was £15,200 – up slightly from 2018 when it was reported as £14,800. While this is a typical average debt amount for Trust Deeds, bear in mind that Trust Deeds can be used on debts of over £30,000 – it isn’t the only rule that determines your suitability.

DAS – Debt Amount

To be eligible for the DAS, again you must be a resident of Scotland, have one or more debts, and be struggling with your current debt repayments. You would typically have a reasonable amount of disposable income to put towards a DPP. There is no set minimum amount of debt which you need to be eligible for the Debt Arrangement Scheme. The Scottish government reported that in 2019, the average debt amount for DAS was £17,200 – again up slightly from 2018 when it was reported as £16,500. While this is a typical average debt amount for DAS, bear in mind that like Trust Deeds, DAS can also be used on debts of over £30,000 and therefore it isn’t the only rule that determines your suitability here either.

Trust Deeds – Pros and Cons

When you’re weighing up an answer to the question of Is A DAS worth it, the pros and cons of DAS vs Trust Deeds are a great starting point. The important thing to remember is that it will come down to your own circumstances and what’s best for you depending on what you can afford to repay each month, your assets and really what you want to achieve from it at the end, as obvious as that may seem. Whether you qualify for a DAS, a Trust Deed, an alternative, or all of the above; it’s essential that you get balanced debt advice from a qualified debt advisor and that the advice is given to. Trust Deed Scotland® also provide a personalised illustration and our advice team will explain the pros and cons of any solutions and what they mean to you. There are unfortunately some debt advice company firms operating without the correct regulatory approval. Or that may try and force you into a solution without explaining the differences. Trust Deed Scotland® have earned thousands of 5-star reviews, as a result of our ongoing commitments to training and compliance, and a desire to put our clients’ best interests at the forefront of our service.
Trust Deeds – Pros
Once Trust Deeds become protected, your creditors can no longer take legal action against you and this means, as long as you keep up repayments during the Trust Deed, you cannot be Sequestrated (made bankrupt in Scotland). Your lenders are also prevented from contacting you to chase you for payment, putting an end to the hassle of persistent telephone calls and letters from the people you owe money to, which can make having unaffordable debt so stressful. Another strong aspect in the favour of Trust Deeds is that a significant amount of your unaffordable debt is written off, allowing you to become debt-free in a relatively short period of 4 years.
Trust Deeds – Cons
The main disadvantage of a Trust Deed is that it will have a negative impact on your credit score, which can take some time to rebuild. This means accessing further credit once your plan has ended can be challenging. Another disadvantage is that, if you are a homeowner, you may be expected to release equity to put towards the Trust Deed. Although Trust Deeds do allow for some flexibility if you do not keep up with your payments you run the risk of the plan failing, and could face Sequestration (Scottish equivalent of Bankruptcy). Find out more about the advantages and disadvantages of Trust Deeds and how Trust Deeds work.

DAS – Pros and Cons

Now, when considering if a DAS is worth it, or whether a Trust Deed is a good idea, it is necessary to then evaluate the pros and cons of DAS.
Debt Arrangement Scheme – Pros
Like Trust Deeds, the Debt Arrangement Scheme is legally binding, meaning that during your DPP term, creditors can no longer harass you for payment or take legal action against you. You will also make a smaller monthly contribution to your debts, making it easier to meet your essential living costs and pay the bills that matter most. All of your assets including any equity you might have in your home or other property are entirely protected. Lastly, the main advantage which a DPP has over an informal debt management solution is that all interest and charges on your debts are frozen.
Debt Arrangement Scheme – Cons
As with Trust Deeds, and any formal debt solution, entering into a DPP will have a negative impact on your credit rating, making it more difficult to access credit in the future. If you do not keep up with your DPP payments, it could be revoked, leaving your creditors free to take legal action against you and resume charging interest and fees on your debt. Lastly, unlike Trust Deeds, none of your unaffordable debts is written off under the terms of your Debt Payment Programme. This ultimately means that repaying your debts may take longer than in a Trust Deed, and potentially make it a more expensive process. Find out more about the advantages and disadvantages of the Debt Arrangement Scheme.

DAS vs Trust Deeds – Joint or Single Application?

  Trust Deed Scotland® are also asked about the opportunity for two persons to do a joint DAS or a joint Trust Deed. It’s possible for a couple, married or otherwise, to apply for a joint Debt Arrangement Scheme however it’s not strictly possible to have a joint Trust Deed however, it is fairly normal for both parties to have individual Trust Deeds. Aa situation that arises in many residences across Scotland where the household have amassed unaffordable debts. The key is to ensure that you do get the correct debt advice, and you can trust us that we’re in the best position to offer you that advice, as the No.1 rated debt advice company in Scotland; as per our independent Trustpilot debt advice reviews.  

DAS vs Trust Deeds – Where to Get Debt Advice

As a final thought – whether you want to understand whether a Trust Deed is a good idea, or is a DAS worth it; we would always advise that you seek tailored advice which can be tailored to your situation and your circumstances. You can get this advice from a licensed debt charity, or you can get expert advice, right now from Trust Deed Scotland® by calling us on 0141 221 0999. you can contact us, or try out our Debt Repayment Calculator.

What Is A Debt Payment Programme in Scotland?

Posted on by Craig Stocks
A Debt Payment Programme in Scotland (DPP) is the term used to describe how much you pay back to your debts each month as part of a Debt Arrangement Scheme (DAS). DAS is a statutory debt management plan, introduced by the Scottish Government in 2004 to help individuals repay their debts in full. If you need a helping hand to get out of debt, DAS could be a suitable option for you. Also referred to as a Debt Payment Plan, a DPP is essentially a financially means-tested method of managing your debts at an affordable level. As well as individuals, the Debt Arrangement Scheme offers self-employed debt help to sole traders, partnerships, certain limited partnerships, trusts,  unincorporated businesses, certain categories of charities and certain corporate bodies are all eligible for the Debt Arrangement Scheme. Only a DAS-approved money advisor can arrange this on your behalf, however once arranged – it offers you a chance to restructure your unaffordable debts at a level that you are comfortable repaying each month. If you believe you fall into the category of a business rather than an individual for DAS you have to seek advice from a qualified insolvency practitioner. Once approved, the DPP offers legal protection against creditor enforcement action and freezes interest and charges. A Debt Payment Programme will protect your home and car. Only available to residents of Scotland, a Debt Arrangement Scheme – is a popular alternative to a Protected Trust Deed and Sequestration. Note, in England, Wales and Northern Ireland – there is no equivalent solution that offers the same statutory legal protection, the nearest equivalent is more widely referred to as a Debt Management Plan. A DMP is a voluntary arrangement between the individual and creditor basis only. When considering the Pros and Cons of a Debt Arrangement Scheme, a qualified debt expert should go over all your income, outgoings, debts and other pertinent information to work out what options are open to you.  

What Debts Can Be Included In My Debt Payment Programme?

  Very similar to the Protected Trust Deed, you can include most types of unsecured debts in your Debt Payment Programme. ✓ Credit Cards ✓ Store Cards ✓ Personal Loans ✓ Bank Overdrafts ✓ Payday Loans ✓ Council Tax Arrears ✓ Utility Bill Arrears ✓ Shopping Catalogues ✓ Credit Unions ✓ HMRC In a Debt Arrangement Scheme, this can further include some secured debts ✓ Mortgage, Rent + Car Finance arrears. Optional – Missed payments only, terms and conditions apply – contact us for details. Debts than cannot be included are typically Student Loans, Court Fines and CSA/Child Maintenance Arrears.  

DPP Proposal

  If DAS is appropriate for your circumstances, the money adviser will calculate an affordable monthly repayment amount and decide how long the plan should last. The adviser then makes a formal proposal to your creditors, who must either accept or reject within 21 days. If the creditors don’t respond to the DPP Proposal, it’s assumed that they agree with the terms. If a creditor doesn’t approve the DPP proposal, the plan can be put through if the money adviser believes it to be fair and reasonable under the terms of the Debt Arrangement Scheme. Once the DPP Proposal has been accepted, the interest and additional charges on your debts will be frozen as long as you abide by the DPP terms.  

Advantages of a DPP

 
  • A DPP lets you repay your unaffordable debts at a more reasonable rate, while still leaving you enough money for living costs and household bills
  • All interest or charges that are being applied to your debts will be frozen at the point when you apply for your DPP
  • Your creditors can’t contact you or take any further legal action against you
  • If your situation changes you can apply to vary your payment or apply for a payment break, although the term of the break will be added to the DPP
  • When your DPP is complete, your unsecured debts will be paid in full
  • Once your DPP becomes approved then by law any earnings arrestments currently in force have to be cancelled. Your continuing money adviser will ensure that this happens for you.
 

Disadvantages of a DPP

 
  • Unlike a Trust Deed which typically lasts a period of 48 months, the DPP lasts until the full debt is written off. Therefore, there is no unaffordable debt written off, other than frozen interest and charges
  • Once you’re on a DPP your details will be put onto the DAS register. This is an online register that your creditors can access
  • A DPP will appear on your credit file for six years
  • If you don’t keep up your payments the DPP could fail, and creditors can add interest charges, or take further action against you
 

How Can I Apply For A DPP?

  You can apply for a Deb Payment Programme under the Debt Arrangement Scheme today with Trust Deed Scotland®. There are no setup fees for a Debt Payment Programme and the cost of administering the DPP are borne by the creditors. More information available here. There are a variety of debt solutions available in Scotland to help deal with your debts. You can find out more about the solutions above or you can visit our debt advice in Scotland page. Give us a call on 01412210999 to find out more.

What’s The Minimum Level of Debt For Trust Deeds?

Posted on by Craig Stocks

Do I Need A Minimum Level of Debt to be Considered For A Trust Deed?

As with all debt solutions in Scotland, Trust Deeds are specific to your individual circumstances. Typically, you would have a minimum level of debt over £5,000 to qualify for this debt solution. In 2019, with over 10,000 Protected Trust Deeds, the average total debt owed to creditors was £14,900*. However, there are many considerations selecting the correct solution for you, that’s why we need you to contact us for more information – to establish the facts and then provide you with a personalised illustration of all the options open to you. Ultimately, all debt advice is tailored to you, and any company that has your best interests at heart wouldn’t try and ‘sell’ you into a solution that is not fit-for-purpose. Trust Deeds have helped thousands of people look forward to a brighter future; however, in order for the Trust Deed to be successful for you, you would need to have an income that allows a regular repayment over that time. The more important question is not such do I need a minimum level of debt to be considered for a Trust Deed, but can I afford to make regular payments to my Trust Deed and is the Trust Deed the best solution for you, depending on your circumstances. If not, there are alternatives to a Trust Deed. Trust Deeds are only available to Scottish residents and you must have lived in Scotland for at least six months before you apply. If you are based in England or Wales, then debt solutions such as an Individual Voluntary Arrangement may be a suitable alternative for you.

Who qualifies for a Trust Deed?

To qualify for a Trust Deed you would usually:
  • Have at least one debt
  • Have over £5,000 of debt
  • Be resident in Scotland
  • Be able to repay your debt(s) after you’ve paid your living expenses
  • Have an income
Find out more about Trust Deed Pros and Cons. There is no maximum level of debt as such, however, affordability and being able to repay a contribution is important.

Do I Need A Minimum Level of Debt to be Considered For A Debt Arrangement Scheme?

There is no set minimum level of debt required to be considered, however, Trust Deed Scotland typically suggests that the Debt Arrangement Scheme may an option if you have over £3,000 of unsecured debt. Debt Arrangement Scheme is designed to help individuals, couples, and businesses repay their unaffordable debts. It also helps creditors recover debts they are due. To be eligible for DAS, a debtor must have one or more debts and:
  • Be a resident of Scotland
  • Have sought the advice and assistance of a DAS-approved money adviser
  • Want to repay their debt without the threat of creditors taking legal action against them
  • Have a reasonable level of disposable income after meeting their basic needs

Joint Debt Arrangement Scheme

Couples who are each liable for a debt which may be included in a debt payment plan. You may apply for a joint debt payment programme if you are:
  • Spouses or civil partners of each other
  • Living together as spouses or civil partners of each other
  • Both applicants must consent to the proposal

Business Debt Arrangement Scheme

Self-employed individuals, partnerships, trusts or unincorporated bodies can also seek to repay their debts over a period of time, up to a maximum of five years, through DAS. Businesses excluded from the Debt Arrangement Scheme are:
  • Limited or public companies
  • Not formed under Scots law
  • Those established or carrying on business outside of Scotland
Find out more about the Debt Arrangement Scheme Pros and Cons.

Do I Need A Minimum Level of Debt to be Sequestrated?

To qualify for Minimal Asset Process, your debts would be more than £1,500 but less than £17,000. In order to apply instead for Sequestration, your debts total more than £3,000. It will cost you £200 to apply for Sequestration via the full administration route or £90 if applying via the Minimal Asset Process route. There are no waivers or exemptions for this fee and it is non-refundable. Payment can be made by cash, cheque, debit card, or postal order. There is also an option to pay online. Find out more about the advantages and disadvantages of Sequestration.

Where Can I Get Online Debt Help In Scotland?

  You can get online debt help today with Trust Deed Scotland®. There are a variety of debt solutions available in Scotland to help deal with your debts, regardless of the minimum or maximum amount of debt that you owe. You can find out more about the solutions by visiting our online debt advice page Or, if you would prefer to speak a Scottish debt solutions specialist, you can give us a call on 0141 221 0999 to find out more. Any advice offered is tailored, balanced, and non-judgemental. *Information provided by the Scottish government