Tackling your debts

Debt Arrangement Schemes: What is a Money Advisor?

Posted 02 September 2016

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Find out how a Money Advisor can help you set up your Debt Arrangement Scheme (DAS).

In some ways, dealing with unmanageable debt in Scotland is similar to if you’re anywhere else in the UK. No matter where you live, debt problems can mean a lot of stress and worry – but there are solutions to help you cope.

But when it comes to the debt solutions available in Scotland, they’re actually quite different from those in England, Wales and Northern Ireland. For example, if you’re applying for a Debt Arrangement Scheme (DAS), you’ll need to go through a Money Advisor. This is someone who can give advice and help you apply for DAS – let’s take a look at what they do.


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What Money Advisors do

A Debt Arrangement Scheme (DAS) is a formal solution for dealing with your debts in Scotland. Because it’s a formal solution, it goes through the Scottish Government, under an agency called the Accountant in Bankruptcy (AiB).

You can’t just apply for DAS on your own – you’ll need to go through an approved Money Advisor. They’re qualified to help set up a DAS for you and to give you advice about the debt solution.

If you want to apply for DAS, you’ll need to get in touch with one of these Money Advisors. They’ll be able to give you money advice and let you know if the solution is the best way for dealing with your debts. If you do decide to go ahead with a DAS application, your Money Advisor will put together a proposal for this, based on what you can afford to pay. They’ll look at what you’re bringing in each month, as well as the essential bills and expenses this goes on. Whatever you have left at the end of the month, they’ll put this towards your DAS.

When this proposal is complete, your Money Advisor will take it to your creditors and let them know how much you’re able to pay. Your payments to each individual creditor will be on a ‘pro rata basis’ so if you owe more to one, they will get a bigger share of your payment.

And it’s actually not your Money Advisor who shares your payment to each of your creditors – this is the job of the Payments Distributor. You’ll only have to make one payment every week, fortnight, four weeks or month, depending on when you get your income, and they’ll share it out for you.

Debt Arrangement Scheme

If you’re not sure of the details of a Debt Arrangement Scheme (DAS), don’t worry – let’s go through how the debt solution works. As we mentioned above, it’s only available in Scotland and to qualify, you’ll need to be ‘habitually resident’ in Scotland. That just means that your main residence must be Scotland so if you were only living there temporarily, you wouldn’t qualify.

On the debt solution, you’ll make a reduced payment towards your unsecured debts based on what you can afford to pay each month. You’ll keep making payments until you’ve cleared all of your debts. The Payments Distributor will then charge your creditors a fee for the debt solution, meaning your creditors will get at least 90% of the debts you owe them.  Your interest and charges will be frozen under DAS so your debts will always be decreasing, not increasing.

But like with other debt solutions, DAS also has some drawbacks too. It will have a negative effect on your credit history for at least six years so even after your plan has ended, you could still struggle to borrow. You usually won’t be able to take out credit while you’re on a DAS anyway, unless it’s an emergency.

While your DAS is ongoing, you’ll be on the publically available DAS register. This means that – in theory – people you know could find out about your debt solution if they searched for your full name on here. The DAS register is mainly for creditors and credit reference agencies when they’re updating their files with your information so it’s not likely that someone you know would just happen to search on here without reason, but it’s still a possibility.

Seeking help

As we explained, your first step when you want to apply for a Debt Arrangement Scheme (DAS) is to get in touch with an approved Money Advisor. After they’ve looked at your income and expenditure, it might be the case that they actually recommend a different Scottish debt solution for you.

If you’re insolvent – meaning you can’t afford to make your debt repayments and you don’t have enough assets to sell to clear them – you might want to consider a solution like sequestration, a Trust Deed or Minimal Asset Process (MAP) instead. A debt advisor will let you know which of these solutions you qualify for and which one is best for your situation.

You can get in touch with our advisors by using any of the options to the left. They’ll tell you about the different solutions available, some of which have fees attached to them, but the initial advice they give is always free. The Scottish government DAS website also has a search to help you find a Money Advisor near you.


by Emily Bancroft

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.