With inflation rising to 10.1% as of September, the cost of living crisis is putting pressure on people’s finances across the UK. Coupled with the financial difficulties already created by the COVID-19 pandemic since 2020, this poses a real challenge for people managing personal debts.


According to research from the Money Charity, the average UK household debt, including mortgages, stood at £65,346 in August 2022. This is projected to rise to £85,906 by 2025, assuming forecasts by the Office for Budget Responsibility and Office for National Statistics are correct.


If you’re worried about rising debts as the crisis continues, there are options available to make it easier to gradually repay the money you owe. 


The debt arrangement scheme (DAS) is one such scheme, available only in Scotland, which is designed to make repaying debts more manageable.


What is the debt arrangement scheme?

The DAS is a scheme set up by the Scottish Government, which allows you to manage your debts and pay them back through regular payments.


Through it, you can make one monthly payment into a debt payment programme (DPP). This payment is then divided up and sent to your creditors, who are not allowed to take any legal action over your debt.


The idea is to give people the breathing space they need to pay back what they owe, with a structured plan that makes sure they still have enough money for their essential living costs.


Who is eligible for the DAS?

To apply for the DAS, you must:


  • live in Scotland
  • have a reasonable amount of money after your essential spending to pay your debt
  • have had advice from a DAS-approved money adviser.


You can’t join the scheme if you’re already in a protected trust deed (another type of arrangement for repaying debt) or if you’re bankrupt.


Individuals can apply to the scheme, and couples can apply jointly too if they’re married, in a civil partnership, or living together as if married.


Unincorporated businesses, partnerships and trusts can apply, but limited or public companies cannot. Businesses are also excluded if they were established or carry on business outside of Scotland, or if they were not formed under Scots law.

Pros and cons of the DAS

Joining the DAS comes with several advantages, including:


    • No court action from creditors. As we mentioned, your creditors are not allowed to take legal action against you once you join the DAS,  and they can’t contact you. You can also apply to the Accountant in Bankruptcy to set up a moratorium if you’re still thinking about your debt repayment options.
  • Your interest, fees and penalties on loans will be frozen during the DPP and cancelled once it’s complete. This means by the time you complete your DPP, you’ll have cleared all your debts. 
    • You’ll only need to make one payment a month, at a set amount for a reasonable period of time. 
  • It’s normally free to apply and set up a DPP as an individual. Money advisers are not allowed to charge you a fee for helping you to apply and you don’t have to pay an administration fee.
    • You don’t have to sell your house or other assets to pay back your debts, as you might with other options like bankruptcy.
  • Your employment options are not limited by a DPP, as they are with trust deeds and bankruptcy.


However, there are some disadvantages to be aware of:

  • You might have to pay for a long time under the DAS, as it spreads out your repayments and doesn’t require you to sell other possessions or property. Bankruptcy and trust deeds might mean you can be discharged from your debts sooner, although they come with their own implications.
  • You’ll be placed on a public register when you join the DAS. Few people are likely to check this, but if someone were to search for your name, they might find you there.
  • Your credit rating is affected while you have a DPP in place, which could make it difficult to get a mortgage or a loan. In general, having a DPP could make it hard to borrow at all.
  • If you don’t meet the scheme’s conditions, your DPP can be revoked. This means you lose all the protections of the scheme, and your creditors can reapply interest and fees. It’s important that you pay careful attention to the scheme’s conditions, and if at any point you don’t think you’ll be able to meet them, contact the DAS administrator.

If you’re struggling with debt, you can find and talk to a money adviser here, or read more about the DAS in Scotland here.