If you are struggling with debt issues then you might find the Debt Arrangement Scheme Scotland as one of the best ways to clear off your debt issue. You should know that this scheme is made by the Scottish government in order to make the people completely debt-free.
With the help of this scheme, you will find a manageable way to clear your debts and you will not get a threat from the court and also the creditors. You can set up a Debt Management Program under the debt management scheme or DAS.
This scheme will help you not to increase debts and you won’t have to deal with the creditors. Before applying for the Debt Arrangement Scheme Scotland make sure that you gain complete knowledge regarding this scheme.
Advantages of Debt Arrangement Scheme Forum
In the Debt Arrangement Scheme, you will find various advantages as mentioned below.
Your Assets and Belongings
When you get the approval for the Debt Arrangement Scheme, you won’t have to sell your property like your car or even your home. If you want to sell your home, then you can do so. This will help you to clear off your debt and you will be able to do that more quickly than paying your monthly payments.
No More Enforcement Action
Sometimes you might want to set up a Debt Management Program under the Debt Arrangement Scheme forum. In order to stop your creditors from taking any step against you, you need to go to an Accountant in Bankruptcy. This process is known as a ‘moratorium’ and lasts for 6 weeks. When you are under this process, then your creditors will not arrest your bank account. If you are attempting to set up a trust deed, then make sure to apply for the moratorium process.
Interest and Debt Charges
When you are under a debt payment program, at that time you will not have to pay any debt charges. When this program is completed debt charges will be cancelled. This indicates at the end of this program, you will clear all your debt issues.
Jobs and Employment
Because of this debt payment program, you will not be bound to take up private jobs. Moreover, this scheme will not prevent you from taking up certain jobs. If you are taking some other scheme to clear off debt like trust deed or bankruptcy, then it will provide a negative impact on your job.
- If you are struggling with debt issues, then a debt payment program helps you to repay your debts at an affordable rate.
- When you are approved for a DPP, then all interest and charges will be stopped and your creditors are restricted to take action against you.
- Sometimes, you might need a payment break as you face a bad situation. To do so, make sure to negotiate with your creditors and if they agree, then you can take the break.
Debt Arrangement Scheme Disadvantages
There are many risks in the Debt Arrangement Scheme forum and those are mentioned below:
- When you are approved for the debt payment program or DPP, then all your personal information will be sent to the DAS register. Through this register, anyone can access your details as it is an online register.
- You need to keep in mind that a DPP can affect your credit file for six years. Hence, make the payments on time because if you fail then your credit ratings will be affected. When you fail, creditors will charge extra interest from you. They can even take you to the court and can take action against you.
- When you are under the Debt Arrangement Scheme, you will be able to borrow a limited amount of money. During DPP you find difficulty to borrow any money.
- If you have rent arrears, then your landlord has the power to take action against you. It can be possible that your home is on the mortgage. When you are not able to repay, your creditors can sell your home to get back the money that you owe.
- You need to keep in mind that a Debt Arrangement Scheme lasts for many years. If you want to pay your lump sum amount of debt slowly, then this period will be extended.
Criteria to Qualify for the Debt Arrangement Scheme in Scotland
If you are a resident of Scotland, then only you can apply for this scheme. People who are living in England, Wales and Northern Ireland also have a similar option. If you are planning to apply for debt, then first check whether you are qualified for it or not.
- You should have a home in Scotland. If you don’t have a home but you are running a business here, then you can apply for this scheme.
- After living costs have been deducted, check whether you have surplus monthly income or not. Some of the things which are included in your living costs are food costs, rent payment or mortgage loan, council tax, etc. Make sure that you have saved £50 each month after spending on your household matter.
- Assure that you have owed more than one debt. When you are in any bad condition make sure to ask help from a DAS approved money advisor.
- If you have a total balance of more than £20,000, then you will not be able to qualify for this scheme.
- Check whether you have assets more than £1,000 or not. Thus, in order to qualify for this scheme, you should not have assets more than this amount.
After applying for a DRO, an official receiver will check whether you are applicable for this scheme or not. After investigating your application if the official receiver finds the following factors, then they have the power to reject your proposal.
- If you sell your property like your home less than its worth within the last two years, then your application will be rejected.
- Sometimes, it can be possible that you paid more than other creditors then your application can be rejected.
When You are Restricted to Join DAS?
Sometimes, you might not be able to join the Debt Arrangement Scheme because of your situation. Below, we have discussed the situations based on which you can not join DAS.
- Sometimes, you might not be able to pay off your debt as you do not have a reasonable amount of money or assets left.
- When you are under a protected trust deed, then you can not join a Debt Arrangement Scheme.
- If you are bankrupted, then you can not apply for this scheme.
- When you are under bankruptcy restrictions, then you can not join this scheme.
- It can be possible that you are under a conjoined arrestment order. At that time, you are restricted to join the Debt Arrangement Scheme.
Which Debts You Can Attach in the Debt Arrangement Scheme?
You are able to attach various unsecured debts. Some of those unsecured debts which can be included in the debt payment program are credit card debt, payday loan, bank payments and many others.
There are some of the secured debts that you can not attach in the Debt Arrangement Scheme. You can not add those loans which are secured by an asset. You are restricted to purchase hire agreements.
High priority debt like a mortgage, can be included in a Debt Payment Program or DPP. In order to know which debts you can include in the Debt Management Program, make sure to go to a DNS approved money advisor.
What are the Steps to Follow to Join the Debt Arrangement Scheme?
When you are approved for a Debt Arrangement Scheme, then you just have to make one monthly payment for the total amount of debt. First, you need to check whether the debt arrangement program through the Debt Arrangement Scheme suits your situation or not.
In order to check whether it suits your situation or not, go to an approved money advisor first as they are approved by the Accountant in bankruptcy. The money advisor will first listen and then understand your circumstances. Then, they will decide which is the best option for you to clear off your debt.
What is the Role of the Creditors in a Debt Payment Program
You need to keep in mind that the Debt Arrangement Scheme is backed by legislation. Creditors must follow certain aspects like freezing fees, interest on debts. When the debt payment program is completed, then you will notice that it will be waived permanently. If your debts are listed in the debt payment program, then the creditors will not correspond with you regarding this matter.
How Much Do You Have to Pay for the Debt Payment Program?
After entering a debt payment program all the costs will be covered by the creditors. At that time you will not have to make additional payments. When your debt payment program is approved, 22% of your payments will be deducted in order to cover the cost of the running program.
You should know that this percentage is set by the law and this amount will be written off by your creditors. Make sure that you haven’t paid the fees.<