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Debt advice at Thomson Cooper

Debt Alert - new DAS rules in force

With hopes of increasing the accessibility and sustainability of Debt Payment Plans (DPPs) under the Debt Arrangement Scheme (DAS) and to offer greater flexibility, the new Debt Arrangement Scheme Scotland amendment regulations 2018 (DASSA Regulations 2018) came into force on Monday 29th October.

The Scottish Government backed scheme, which was introduced in 2004, allows people to repay their debts over an extended period, while providing protection from creditors who may try to take further action against them.

Interest and charges on the debt included are frozen from the moment proposals are submitted to creditors and if the scheme is then approved will continue to be frozen for the term of the DAS and waived on full completion.

The scheme is open to both individual debtors and to legal persons and other entities. The scheme as it relates to legal persons and other entities is known as “Business DAS”.

The new changes amend the regulations to:

  • Include the option for the debtor to exclude from the DPP arrears of rent or mortgage payments in relation to the debtor’s sole or main residence.
  • Allow the option for the debtor to propose to pay a proportion of their surplus income into the DPP, not the full amount as previously.

  • Include within the DPP an offer of a lump sum payment using the proceeds of a future sale or re-mortgage of the debtor’s sole or main residence.

  • Allow individual debtors to access further credit up to a limit of £2000 (except where the debtor has existing debts outside the DPP of £1000 or more).

  • Provide the option for those at risk of violence to keep their name off the DAS Register.

  • In Business DAS, remove the requirement that the DPP applied for must provide for the payment of two or more debts.

  • Extend the existing protection from diligence and sequestration to cover related individuals in Business DAS from the date on which the application for the DPP is entered in the DAS Register.

  • Allow the debtor in Business DAS to apply for a payment break of no longer than 6 months, with the term of the DPP extended accordingly (up to a maximum term of 5 years from the date of application).

For more information on DAS or Business DAS please contact Ian Brown at Thomson Cooper on 01383 628800 or email ibrown@thomsoncooper.com