In Scotland, if you're struggling in debt, you could qualify for debt help from a government-run debt management tool. Residents of Scotland who qualify for DAS, the Debt Arrangement Scheme, could lower their monthly repayments.
DAS is a scheme for struggling borrowers that can protect them from legal action from their lenders before things get too serious. On a Debt Payment Programme (DPP) under DAS, you could repay your unsecured debt at an affordable rate, lowering your monthly payments, without spending money you need for essentials.
Lowering repayments does impact your credit record for six years, making it tougher to borrow money for that time. DAS is still a practical solution to some debt problems, though. For example, on DAS, interest and charges on unsecured debts are frozen. That gives borrowers a better chance of repaying their debt in full and more quickly than they could if it was still growing.
Why DAS freezes interest and charges
When you're in debt, interest and charges can quickly add up - and the longer the repayment period, the more they'll normally cost. Charges mount up when payments are missed for any reason. Debt can snowball this way far too easily. If someone can't afford their payments anyway, extra charges and interest can make it even harder.
The Scottish government introduced DAS to give borrowers statutory protection from their lenders, as well as relief from interest and charges. That gives struggling borrowers a fighting chance to get back in control of their payments and begin working towards a debt-free future again.
Do I need DAS or a different Scottish debt solution?
If you can't afford your unsecured debt, it's time to get debt help. DAS may be suitable, or another debt solution might be better, depending on your circumstances.
Two other debt solutions that are only available in Scotland are Trust Deeds and the LILA route into bankruptcy.
A Trust Deed may be more suitable than DAS if you cannot afford to repay what you owe. A Trust Deed is more formal than DAS, usually lasts for three years and borrowers sign a formal agreement to repay whatever they can afford every month. Like DAS, Trust Deeds freeze interest and charges, but can also write off part of a debt, if you successfully pay back what you can afford for three years. However, Trust Deeds have a greater impact on your credit record than DAS and can require homeowners to release equity from their property.
While it's still possible to go bankrupt the 'traditional' way in Scotland, the LILA route into bankruptcy can help struggling borrowers who want to go bankrupt, but don't want to wait for their lenders to make them bankrupt. Bankruptcy is more suitable than DAS if the borrower has no real chance of repaying what they owe. However, it comes with some serious consequences - including the chance that homeowners will lose their property.
