Changes to the debt arrangement (DAS) scheme

On 7th February 2013 the Scottish Government announced plans to alter its Debt Arrangement Scheme (DAS) the Scottish Government’s Debt Management tool.  The DAS, which is uniquely Scottish, freezes interest and assists people struggling with debt to repay their indebtedness over a longer period.

During a Scottish Parliament debate on debt Fergus Ewing, the Enterprise Minister, advised that the Scottish Government would be introducing changes to DAS in the Spring.  The changes will freeze interest and charges from the date at which a debtor’s application is submitted to creditors. The changes to DAS have cross-party support.  According to Mr Ewing they are “To provide further support to those facing the problems of debt, pay day loans, and irresponsible lending we will make changes to the scheme to freeze interest rates and charges as soon as the debtor’s application is sent to creditors.”

“This change halts the spiralling of interest payments at this point of application and thereby acknowledges and encourages the responsible action of debtors who accept they need help managing their debt repayments and then decide to reach out and apply to the Debt Arrangement Scheme.”

“This could protect the debtor from as much as two months additional interest charges – a significant saving for people in financial hardship.”

“The Debt Arrangement Scheme means that instead of turning to pay day loans or allowing debts to build up further people can regain control of their debt and their lives.”

The proposed changes to DAS are part of a package of reforms to be introduced in the Scottish Government’s Bankruptcy Reform Bill later this year.  The aim of the legislation is to ensure that Scotland is in the vanguard of the development of modern insolvency practice which balances the rights and requirements of both debtors and creditors.

Sheena Johnston 27 February 2013

www.aib.gov.uk  

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