Hi Gordo

It's the Debt Arrangement Scheme, available in Scotland.

It is similar to a Trust Deed. The main difference is that you are required to repay all debts in full over a set period. If accepted it can freeze interest, stop legal action etc. But you need to be able to maintain the payments and it can be over a fairly extensive period. There is a post earlier where DAS could apply, but you'd need to be sure you could maintain the payments. What happend if you lose your employment 7 years into a 12 year plan??

Mark

What's the point in doing it if it takes so long?

Gordo

Nae Cash

Hi Gordo

Good point. I think it is best practice to look at all the options available and make the decision on which best suits the individual circumstances. There are a lot of contributory factors in making the decision ie If you were 61 and retiring in 4 years, why tie yourself into a 12 year agreement where your income will be unable to meet the payments in 4 years?

Mark

Do many people do them? Doesn't seem like a great option compared to a trust deed.

Gordo

Nae Cash

Hi Gordo

I have no idea of numbers as I can't see any register. I'm sure about a year back there were only a small number though.

Mark

I think there are only a few hundred people in DAS programmes. To be honest, I think they are generally only really the best option if there is some reason why a trust deed is not viable (eg if someone has a lot of equity in their property and no means of releasing it).

So what would happen to equity in the DAS scheme? Is it protected in any way or can the creditors come after your house?

Gordo

Nae Cash

Hi Gordo

Generally the house would be protected from creditors. The arrangement (as far as I am aware) could be set up to exclude the house, so long as there is sufficient other assets to pay debts in full.

Mark

Good morning Mark & Kevin,

For the purposes of the assets mentioned by Mark (in his last post) would this include future disposable income or does it relate just to material things like houses and cars etc?

Hi TDA.

A debt payment plan under the DAS scheme is usually set up on the basis of disposable income only. The scheme is designed so that a person who applies can protect their assets and repay their debt in full over a period of time without the threat of legal action by a creditor.

Like I said, it can be a good solution for some people, especially if there is a reason why a trust deed would not be appropriate, but as the debt is being repaid in full it would usually take a lot longer to clear your debts than a trust deed.