If you’re struggling to make your repayments on credit cards and loans, a debt arrangement scheme could help you to manage your finances and get out of the credit hole you find yourself in.
What Is a Debt Arrangement Scheme?
With a debt arrangement scheme, your money adviser will help you set up a Debt Payment Programme (DPP) to make lower monthly repayments and repay your debt over a longer period. Once your DPP is approved, all interest, fees and charges will be frozen but, unlike a trust deed, you’ll pay back 100% of your debt.
How Does It Work?
First, we’ll contact your lenders and conduct a full financial review. Then your money adviser will help you to work out an affordable monthly repayment scheme. If your lenders agree, you can start right away.
If your lenders don’t agree, we can look at other options like a trust deed or a debt management plan. In some cases, the DAS administrator has the power to make them agree.
Am I Eligible?
If you have one or more unsecured debts and you live in Scotland, you’re eligible for the debt arrangement scheme. You’ll also need to have sought advice from a DAS approved money adviser and have enough income to make your repayments.
What are the Advantages of a DAS?
Once the DPP has been approved, your creditors won’t be able to add any more charges, or take any legal action against you. You’ll only have to make one regular monthly payment and your home will not be at risk, unless you cannot keep up with your mortgage repayments.
Your credit score will be affected and you’ll be placed on the DAS register, meaning you’ll be unlikely to get further credit. If you regularly miss payments, the DPP can be revoked and you’ll be liable for all interest, fees and charges on your debt. You may also have to pay a fee to your money adviser.