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Personal Difficulties   >  Debt Arrangement Scheme - a Creditor's Guide

The information on this page is taken from a booklet produced by the Scottish Executive.

 

 

Introduction

 

Many people borrow too much but want to repay what they have borrowed. However, it is not uncommon for a person to be able to do so only if they are given more time than the normal terms of business allow.

The Debt Arrangement Scheme "DAS" is a form of debt management rather than debt relief. It is a way for individuals to avoid becoming bankrupt or signing a trust deed.

In particular, one of the key aspects of the DAS is that it is designed to allow people to stay in their home.

A debt management programme is likely to be more attractive to creditors than complete write off and, as a result it may well be in creditors' interests to agree to a scheme which gives a debt management programme a chance of success.

One of the fundamental aspects of the success of the DAS process is that creditors should always consider waiving, or freezing, interest and/or charges. In some cases, creditors may also have to consider discharging/waiving part of the original debt because, in exchange, creditors should be paid more than they will receive if a payment plan is not agreed, or fails. This is likely to be the case even when administration charges are taken into account.

The Debtors (Scotland) Act 1987 introduced the concepts of a time to pay direction (which a court can make when it grants decree) and a time to pay order (which a court can make when a creditor attempts to enforce a decree). Time to pay orders and time to pay directions are only available through court, and only apply to single debts. Thus, they are of little value where an individual has multiple debts. The DAS does not require immediate court intervention and hence, is a viable alternative for consideration.

The Scottish Parliament approved the Debt Arrangement and Attachment ( Scotland ) Act 2002 "the 2002 Act" and the detailed rules set out the Debt Arrangement Scheme ( Scotland ) Regulations 2004 "the DAS Regulations".

The DAS process involves five parties: an individual with debt problems, creditors, an approved money adviser, a payment distributor, and the Scottish Executive "the DAS administrator".

The money adviser applies to the DAS administrator for approval of a debt payment programme "DPP" proposed by the individual. If the programme is approved, the payments distributor selected by the money adviser divides the monies available amongst creditors in an appropriate and regular manner.

A standard debt repayment plan and a DPP are similar because:

  • the individual must want to repay his debts.               
  • the money adviser works out the surplus income and makes a pro-rata offer of payment to all creditors.                       
  • the individual and the creditors can reach whatever agreement suits them. Once the creditors agree to the situation, a DPP is approved by the DAS administrator.             
  • debts and interest can be written off in a DPP by prior agreement with each creditor.

However, a repayment plan and a DPP differ in a number of important ways and it is these differences that may make DAS an effective tool:

  • DAS is a statutory scheme and has the force of law.             
  • if a creditor says nothing they are presumed to agree (deemed consent).         
  • DAS is flexible:  
    • a DPP can be varied whether or not creditors agree.
    • a 'fair and reasonable' test applies where there is incomplete agreement and means that a DPP can, in principle, match any circumstances.
  • Creditors will find it difficult to block a fair and reasonable DPP from progressing:
    • a single dissenting creditor must be owed more than one half of the total debt.
    • a group of dissenting creditors must be owed more than 60% of the total debt.  
  • When a DPP is approved the individual is freed from the threat of:
    • arrestment, attachment and other diligences.
    • bankruptcy.

This guidance does not have the force of law and legal advice is always encouraged before specific action is taken.

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Overall approach

 

If an individual owes money and finds that he cannot pay all his creditors, he might seek advice. Accredited money advisers will consider all the options available. A DPP under DAS is one of these options if the person has surplus income after he has paid his essential outgoings e.g. mortgage, fuel, food costs etc.

Anyone considering a DPP must consult an accredited money adviser approved by the DAS administrator. Information on how to do this is available at www.moneyscotland.gov.uk . Individuals considering this process should not follow advice from any person or company who cannot demonstrate proper accreditation.

The money adviser will contact each creditor and advise that the person is unable to meet his contractual obligations. They should always provide you with a mandate signed by the person giving them authority to act. If they do not provide a mandate showing that the money adviser has authority to deal with the person's financial affairs, ask to see it. If it is not forthcoming you should inform the DAS administrator and decline to continue dialogue with the money adviser.

  

The DAS administrator can be contacted at:

DAS administrator       telephone:   0131 473 4600

George House             fax:   0131 473 4737

126 George Street       email:    das@aib.gov.uk

Edinburgh

EH2 4HH

As part of the debt confirmation process the accredited and authorised money adviser will ask you to confirm:

  • the principal debt.
  • the interest rate (if any).
  • the original term of the debt.
  • the contractual payments that the person has contracted to pay.
  • the balance outstanding.
  • the amount of arrears.
  • any charges that may be incurred e.g. penalty charges on missed payments (which must have been stated in the original contract).
  • details of any existing payment protection e.g. insurance.

It is probable that the money adviser will ask you to waive both current and ongoing interest. The Scottish Executive has stated its hope that all creditors will, as a group and in the normal course of this procees, agree to waiving interest on the basis that it will contribute to the likely success of the DPP.

If you do not waive interest, the money adviser will try and negotiate that you freeze interest or agree a fixed rate for the interest. It is important to note that if a creditor insists on a variable rate of interest no interest can be paid during the DPP because it will be too complex to calculate and factor into creditor payments. Thus, you may find that you will have to pursue the person for the accrued interest when the DPP has finished.

At this stage, neither you nor the individual are committed to a DPP. The money adviser is assessing the options such that a plan of action can be agreed with the individual in the best interests of all parties.

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Applying for a DPP

 

Before applying for a DPP, the money adviser must submit a formal proposal to you on form 4: notification to creditor of application for approval of a debt payment programme. This form is completed and sent to each creditor and is designed to provide the necessary information for you to make a decision. It provides sufficient information such that you can identify the debt and understand the payment proposal being offered. The form will state:

  • the total amount the person owes to you.
  • the amount you will receive from each instalment.
  • the frequency of the proposed payments to you, and
  • the proposed length of the debt payment programme.

If you wish to respond to the proposal on form 4 you must do so within 21 days. The 21 day period starts from the date of posting or electronic transmission to you. The form has a section called form 4a at the end which you can use for your response.

There are four possible responses from a creditor:

  • Consent - this is where you write back within the 21 day period and agree to the proposal.
  • Deemed consent - this is where you do not respond to the proposal within the 21 day period. In this case, you are deemed to have agreed to the proposal.
  • Non-consent - this is where you write back within the 21 day period and object to the proposal. Unless you object on either of the grounds noted below, you are considered to have "not consented".
  • Objection - this is where you write back and object on either of the two grounds below:
    • you consider that the person should be sequestrated (made bankrupt). You should not object on these grounds unless the person is apparently insolvent because a person cannot be sequestrated unless he is apparently insolvent. Apparent insolvency is a technical term that is explained in a booklet produced by the accountant in bankruptcy and you can obtain a copy of the booklet by writing to the accountant in bankruptcy at the same address as the DAS administrator (see 2.3 above), by telephoning 0845 762 6171 or by downloading it from the website at www.aib.gov.uk .                   
    • you believe that the person is in possession of heritable property with substantial unsecured value. If you object for this reason, you should be able to produce appropriate evidence (but see appendix 3 for future guidance).

If you object, you and all the creditors will be given notice of a court hearing. You, as an objecting creditor, will be expected either to appear or be represented at your own cost in order to give evidence in support of your objection. If you don't appear your objection is unlikely to succeed. The overall intention is for all DPP's to be approved if the accredited money adviser supports the proposal.

At the end of the 21 day period, the money adviser and person need to consider every creditor response and whether it is appropriate to apply to the DAS administrator for a DPP. In coming to this decision they will take into account the following:

  • if all the creditors consent, or are deemed to have consented, to the DPP, the DAS administrator will approve the DPP regardless of the amount of the debt or the length of the proposed programme.               
  • the DAS administrator can dispense with the consent of a creditor where the programme is otherwise fair and reasonable, and:
    • the debt due to an non-consenting creditor is 50% or less of the total debt included in the proposed DPP, or
    • the amount due to all creditors who do not consent (this does not include those who object - see paragraph 3.3 above) is less than 50% of the total amount of debt included in the proposed programme.

In deciding whether a programme is fair and reasonable, the DAS administrator will take into account a number of criteria which are set out in appendix 1.

Where the DAS administrator cannot dispense with the non-consent of a creditor, or creditors, or a creditor objects, the administrator must refer the application to the sheriff who will decide whether or not it should be approved.

If approval is referred to the sheriff, you will be given notice of a court hearing. You should appear or be represented if you are given notice. If you do not appear the court is more likely to approve the application.

A sheriff can only make a decision to approve or not approve a DPP. He cannot sequestrate a person at this hearing.

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Approval of a DPP

 

If a DPP is approved the person subject to it will be known as "the debtor". Standard conditions with which the debtor must comply will always be attached to it. These are listed in appendix 2. Further discretionary conditions may be imposed where the debtor's particular circumstances are relevant and these conditions are listed in appendix 3. It should be noted that appendix 3 makes particular reference to a debtor retaining the family home.

When the DAS administrator makes a decision to approve a DPP, or receives notification from a sheriff that a DPP is approved, the money adviser will record this and the DAS register will be updated to shown 'an application for a programme that has yet to be approved'.

The approval of a DPP and the appropriate update of the register to show 'an approved programme' will take place automatically at midnight on the second day after the register is updated to show 'a notice that a programme is to be approved'.

On receiving confirmation of approval of a DPP, the money adviser will notify all the other parties concerned. These are:

 

  • the debtor.
  • each creditor known to the money adviser.
  • the clerk of the appropriate court if there is;
    • a conjoined arrestment order (using the appropriate form),
    • a time to pay order under either section 1 or section 5 (time to pay orders) of the Debtor's ( Scotland ) Act 1987, or
    • a time order under section 29 (time orders) of the Consumer Credit Act 1974.
  • the debtor's employer if, and only if, payments are to be made from the employer directly to the payment distributor. This must be done on form 6: payment instruction to an employer. This form must be accompanied by a signed debtor's authorisation.
  • the payments distributor. The payments distributor will require full details of the payment plan so that arrangements can be made to receive money from the debtor and to make payments to all creditors.

The DAS legislation provides that a participant in a DPP will make a single periodic payment to a single point: the payments distributor. The payments distributor will pay the amounts specified in the DPP to each creditor, taking into account each creditor's preference for method of payment.

The payments distributor will not charge more than 10% of the total payment sum for their services in distributing the money owed to you. It is anticipated that this charge will be deducted from the monies prior to distribution.

When a DPP is approved, the money adviser will give your details to the payments distributor. The payments distributor will contact you to arrange how the monies are to be paid to you.

 

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The effect of approval

 

When a DPP comes into force, it impacts on any existing arrestment against earnings or property. The approval of a DPP has the effect of a recall of such arrestments and the DAS administrator will send a notice of recall to each employer or party in possession of either funds or property arrested.

If you have attached any of the debtor's property, you can remove the attached property, but only if the debtor and anyone else in possession of the attached article has already been notified of the date of the auction. [Debt Arrangement and Attachment ( Scotland ) Act 2002, section 27(4)].

If an article has been removed, or notice has been given that it is to be removed under an exceptional attachment order, the DPP will not prevent the article from being auctioned. [Debt Arrangement and Attachment ( Scotland ) Act 2002, section 53].

The DPP means that any conjoined arrestment order is recalled. The money adviser will deal with this as noted at paragraph 4.4 above.

You must not offer more credit to the debtor whilst they have a DPP. The only exceptions are:     

  • credit approved by a variation of a DPP (see paragraph 6 below).
  • further credit given as part of a cyclical loan agreement which was already in operation when the DPP was approved. In this case, the payment by the debtor must not vary because this credit has been given.
  • trade credit incurred by the debtor in the ordinary course of business. If the debtor applies for this credit, he must show you form 5a (short form of notification of approval of a debt payment programme).
  • credit for emergency repairs as specified in the regulations. If the debtor applies for this credit, he must show you form 5a.
  • credit for reasonable funeral expenses for an immediate family member. If the debtor applies for this credit, he must show you form 5a.

If you give credit to the debtor for any of the above reasons, the debtor must repay you at the contracted rates. The DPP may need to be varied either to reflect that the debtor has less surplus income or to include the new credit. You may not instigate any legal action to enforce payment of a debt because you have been given notice of the DPP. [Debt Arrangement and Attachment ( Scotland ) Act 2002, section 4(5)].

If for any reason credit is given to a debtor who has informed you he is in a DPP you will still be able to seek a decree against the debtor, but you will not be able:

  • to serve a charge for payment in respect of,
  • commence any diligence to enforce payment of, or
  • found on in presenting, or concur in the presentation of, a petition for the sequestration of the debtor's estate, for as long as the DPP is in force.

Thus, if you do give credit, you will not be able to take action to recover such credit until the DPP is either completed or revoked. If you have given credit because the debtor has not informed you he is in a DPP, such non-disclosure will be grounds for revocation of the DPP.

You must not try to persuade a debtor to withdraw from a DPP or make additional payments in respect of a debt included in the programme. If you are a creditor organisation e.g. a debt collection agency, that has an administrative system that generates electronic reminder letters or demands for payment, you should take care that you do not breach this provision.

You must, on request by a money adviser acting for a debtor, provide a statement of all the debtor's liabilities and must notify a money adviser of any liability where you hold a security against a co-obligant of the debtor.

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Variation of a DPP

 

There are situations where it is appropriate for a DPP to be varied and this can result in a number of changes:

  • the amount you receive might be increased.
  • the amount you receive might be reduced.
  • the length of the DPP might be reduced.
  • the length of the DPP might be increased, or
  • a new condition(s) might be attached to the DPP.

The DAS administrator, or the sheriff if appropriate, will decide whether there will be a variation. An application for one has to be made to the DAS administrator on form 8: application for a variation of a debt payment programme. Such an application may be made by:       

  • you.
  • another creditor, or
  • the money adviser on behalf of the debtor.

Before you apply for a variation, you must try and agree the change with the money adviser. The DAS administrator will not consider your application unless you can demonstrate a reasonable attempt to do so.

The DAS administrator can only agree a variation in a limited set of circumstances. Grounds for variation apply whether you, another creditor, or the money adviser is seeking a variation and are:

  • where a debtor agrees with every creditor that the programme should be varied.
  • where the debtor has an increase in surplus income. A variation can be used to increase the instalments paid to creditors and thus pay off the DPP more quickly.
  • where the debtor has a decrease in surplus income. A variation can be used to decrease instalments paid to creditors and extend the DPP whilst still allowing the debtor to pay off his debts.
  • where a debtor and a creditor agree that the debtor no longer needs to pay the creditor what is owed.
  • where the debtor and the creditor agree that the creditor will waive the interest previously demanded.
  • when a debt due at the approval of the programme was omitted from the DPP because it was overlooked, or someone made a genuine mistake.
  • where a future debt, which was not quantifiable when the DPP was approved, becomes due for payment. This might happen, for example, if the debtor has credit which they do not have to start paying off for some months.
  • where a contingent debt, which was not quantifiable when the DPP was approved, becomes due for payment. This might happen if the debtor has been a guarantor for someone else's debt and the creditor has called up the guarantee, and
  • if the debtor has an emergency and needs credit to meet an essential requirement e.g.:       
    • the debtor's house needs to be repaired in order to make it sound i.e. dry rot, leaky roof, broken window, etc.
    • a car needed for business or to get to work is in need of repair.
    • the washing machine or other essential domestic appliance breaks down.
    • there is a medical emergency that requires payment.
    • the debtor requires the services of a plumber or electrician, or
    • the debtor needs help to pay for the funeral of an immediate family member. 

Nobody can apply for a variation for any other reason.

If you wish to apply for a variation, you must send a copy of the application to the money adviser, the debtor, and all other creditors. If you do not know the details of the other creditors, you can ask the money adviser to send a copy of your application to them.

If the money adviser or another creditor applies, they will send a copy of their application to you.

When the DAS administrator receives the application, it will be recorded in the DAS register as 'an application for a variation of an approved programme'. The money adviser will be advised that the application has been received. If the DAS administrator refers the application to the sheriff, the DAS register will be updated to show 'an application by the DAS administrator to the sheriff for variation of an approved programme'.

When considering an application for variation, the DAS administrator, or sheriff if appropriate, will take into consideration:

  • the total amount of debt.
  • the length of time the programme will operate under the variation.
  • the method and frequency of payments under the variation.
  • any comments made by the money adviser.
  • any of the debtor's assets which could be sold to pay off debts.
  • the views of the debtor.
  • the views of any creditor taking part in the DPP and the creditor making the application if they are not already in the DPP, and
  • any other factor the DAS administrator or sheriff considers to be important.

Thus, your view is taken into consideration whether or not you have made the application.

If an application for variation is approved, the money adviser will inform you and tell you what effect the variation will have on you. Also, the DAS register will be updated to show 'a variation of an approved programme'.

If an application for a variation is not approved, the money adviser will inform you. The DAS administrator will have given the money adviser the reasons for the decision not to vary the programme. The DPP and the DAS register will revert to the status it was before the application for variation.

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Revocation of a DPP

 

A DPP is revoked automatically if the debtor petitions for his own sequestration and the sheriff awards it. In such cases, the DAS administrator will remove the debtor's name from the DAS register and inform the money adviser who will inform you. All payments being made to you under the DPP will stop.

All other revocations follow an application to the DAS administrator for revocation.

An application for revocation can be made by:

  • you.
  • another creditor.
  • the money adviser on behalf of the debtor, or
  • the money adviser where aware that the debtor is in breach of a condition of the DPP.

The only circumstances when you or another creditor can apply for a revocation of a DPP are:

  • if a debtor does not have a money adviser without reasonable cause.
  • if a debtor fails to satisfy any condition of the DPP without reasonable cause. These include both the standard conditions (appendix 1) and any discretionary condition applied to the DPP (appendix 2).
  • a payment to be paid under the DPP becomes due and a sum due for previous payments of not less than the total of 2 payments is outstanding. This means that the debtor owes more than the sum of 2 instalments and has missed or underpaid at least 3 instalments, or
  • if a debtor makes a statement in an application, whether for approval or variation, which the debtor knows to be untrue.

The money adviser can also apply for these reasons. In addition, the money adviser must apply for a revocation if the debtor has not made any payments under the programme for 12 months.

If either you or another creditor apply for revocation of a DPP, there is no obligation to inform the money adviser, the debtor, or the other creditors. However, the DAS administrator will inform the money adviser who will contact the debtor so that the debtor has an opportunity to make appropriate representation to the DAS administrator.

Only the DAS administrator can make a determination on an application for revocation. Currently, there is no provision for referral to the sheriff.

When deciding on an application for revocation of a DPP, the DAS administrator will consider:                 

  • whether the application complies with the grounds for revocation (as set out in paragraph 7.3 above).
  • any statement made by or on behalf of the debtor.
  • the nature of any failure or untrue statement,
  • any factor that tends to indicate whether or not the programme will be successful, and
  • any other factor that the DAS administrator considers appropriate.

If an application for a revocation is rejected, the money adviser will inform you. The DAS administrator will have given the money adviser the reasons for the decision not to revoke the programme. The DPP and the DAS register will revert to the status before the application for revocation.

 

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Completion of a DPP

 

A DPP reaches completion in the following circumstances.

  • At the end of the agreed term of the DPP. If the debtor makes all the payments he has contracted to do, completion of the DPP will be at the time specified when the DPP was first approved, or if it has been varied, at the most recent variation. In this case, the debt in the DPP will have been paid in full.
  • At the end of the agreed term of the DPP. If the debtor has missed or underpaid a few times, but this has not warranted a variation, completion will be when the debt in the DPP has been paid in full. This will be slightly later than the time specified when the DPP was first approved, or if varied, at the most recent valuation.
  • If the debtor makes an offer of composition which is accepted by you and all the creditors remaining in the DPP.
  • If you and all other creditors in the DPP agree in writing to completion before the scheduled end of the programme.

The money adviser will send you written notification of completion.

 

Appeals

 

Appeals can be made as follows:               

  • to the sheriff by:
    • a debtor against the DAS administrator's decision not to approve a DPP.
    • by a creditor named in a DPP application against a decision by the DAS administrator to either dispense with their non-consent or to approve a DPP.
    • by a debtor or a creditor who has applied for a variation on the grounds in regulation 38(1)(d)(e) against the DAS administrator's decision to:
      • attach a discretionary condition (appendix 2).
      • approve, or refuse to approve, a variation of a programme, or
      • revoke a programme.
  • to the sheriff principal with the leave of the sheriff by:
    • a debtor against a decision by the sheriff to refuse a DPP, or
    • a creditor named in a DPP application against a determination of a sheriff to approve a DPP.
 

If you wish to appeal, it must be on a point of law i.e. a mistake in fact. However, not all factual mistakes will constitute a point of law and you may wish to obtain legal advice before considering an appeal.

Appeals to the sheriff are either by note in a court process or summary application. The procedure is set out in the rules of court and legal advice is recommended.

All appeals to the sheriff principal must be made by note of appeal and can only be made with the leave of the sheriff. The procedure is set out in the rules of court and again, legal advice is recommended.

In any appeal, the decision of either the sheriff or the sheriff principal is final. This means that only one appeal is allowed. It is not possible to appeal to the sheriff against a decision of the DAS administrator and then appeal the sheriff's decision to the sheriff principal.

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Register

The DAS administrator will maintain a web based register which will be accessible on payment of a fee. The fees note(s) can be provided by contacting the DAS administrator.

The DAS register will contain the following information:

  • application for a programme that has yet to be approved.
  • application by the DAS administrator to the sheriff for determination of a programme.
  • details of whether programme is to be approved.
  • approved programme.
  • application for variation of an approved programme.
  • application by the DAS administrator to the sheriff for determination of a variation of an approved programme.
  • a variation of an approved programme, and
  • an appeal to the sheriff, or sheriff principal.

The DAS register will also include for each debtor who has applied for approval of a debt payment programme, or who is taking part in a programme, a record of the debtor's:

  • name, including any former name(s).
  • age.
  • home address or addresses, and
  • business address (if any).

It will also include the business address of the debtor's money adviser or the money advice body for that adviser.

You can find guidance on who can gain access to the DAS register and in what circumstances on the website at www.moneyscotland.gov.uk .

 

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Optional payments

 

In the list of standard conditions to be found at appendix 1, reference is made to continuing liabilities. These are defined in DAS regulation 2 and relate to sums such as rent, utilities and council tax which are deducted from income when calculating the surplus remaining available for distribution amongst creditors to pay debts. Normal payments of this type are not included in a DPP, although arrears can be included.

 

Provision is also made for payment of continuing liabilities to be made through a payments distributor. Some debtors may consider it useful to pay their ongoing liabilities by automated means at the same time as their debts. This may only be done where the debtor and the recipient of the essential payment have agreed to it and reached agreement on who will be liable for the payment processing administration charge.

 

If you wish the debtor to pay a continuing liability due to you, you must negotiate with them although the money adviser should be able to help in this regard. The payments distributor can charge you an extra 10% for this service. You may ask the debtor to meet this extra cost.

 

 

Appendix 1

 

 

Fair and reasonable

 

In some circumstances the DAS administrator or the sheriff will only approve a DPP or a variation of a DPP if it is considered to be 'fair and reasonable'.

The factors that the DAS administrator or the sheriff will consider in deciding whether a proposal is fair and reasonable are set out in the regulations and are:

  • the total amount of debt.
  • the period over which a programme will operate.
  • the method, and frequency, of payments under a programme.
  • an earlier proposed programme that was not approved.
  • a matter specified in regulation 21(2) that would have prevented an application being made, where the matter no longer has that effect.
  • the involvement of the debtor in a
    • debt payment arrangement, including a debt payment programme under the regulations.
    • time to pay direction under section 1 (time to pay directions) of the Debtors (Scotland) Act 1987, or time to pay order under section 5 (time to pay orders) of that Act, or
    • time order under section 129 (time orders) of the Consumer Credit Act 1974.
  • the extent to which creditors have consented, deemed or otherwise, or objected to a programme.
  • any comment made by the money adviser.
  • an asset of a debtor that could be realised to pay debts and should be included in a programme.
  • the views of a creditor taking part in the programme and of any creditor applying for variation.
  • the views of the debtor, and
  • any other factor considered appropriate.

What is deemed to be 'fair and reasonable' will be flexible in order to reflect each set of circumstances. If, in the view of a money adviser, an application is fair and reasonable they should submit it. In relation to the length of a programme, the DAS administrator is likely to approve anything under 5 years in duration and refuse to approve anything over 15 years. Between these periods will be a matter for individual assessment.

The level of payment considered fair and reasonable is likely to be subject to what payment distributors will accept.

Any level of debt is likely to be acceptable because the accumulation of such debt occurred before the DPP commenced. Information on what each payment distributor offers is available on the list of payment distributors kept by the DAS administrator.

 

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Appendix 2

 

 

Standard conditions (regulation 29)

 

These conditions state that that once a DPP is approved the debtor shall:

  • make all payments under a programme as they fall due.
  • pay a continuing liability when due for payment.
  • except for a continuing liability, make no payment to a creditor taking part in a programme other than a payment under the programme.
  • not apply for or obtain credit beyond that permitted by regulation 35(1)(b), or by a variation of a programme approved under regulation 39.
  • notify the money adviser for a programme of any:
    • change of address.
    • material change of circumstances, within 7 days of becoming aware of the change.
    • within 10 days after receipt by the debtor of a written request from the money adviser for the programme, supply the adviser with such information or evidence as the adviser may request in respect of the income, assets or liabilities of the debtor.

If the debtor adheres to these conditions, the potential to secure completion of a debt payment programme should be enhanced.

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Appendix 3

 

Discretionary conditions [regulation 30]

As well as the standard conditions which apply to all DPPs, discretionary conditions may be attached.

The conditions specify that a debtor must:

  • realise and distribute amongst creditors the value of an asset of the debtor other than an asset excepted by regulation 30(3), see A3.3 below.
  • sign and deliver a payment instruction to an employer.
  • seek agreement from a creditor to pay a continuing liability under regulation 34.
  • complete and submit when due a tax or duty return or declaration.
  • maintain an emergency fund in accordance with regulation 30(4), or
  • be bound by any other reasonable condition intended to secure completion of the DPP.                     

Regulation 30(3) defines an excepted asset as:

  • a dwellinghouse or mobile home occupied by a debtor as the debtor's home, and
  • an asset that is exempted from attachment under section 11 of the Debt Arrangement and Attachment (Scotland) Act 2002 or is not a non-essential asset under schedule 2 of the Debt Arrangement and Attachment (Scotland) Act 2002.

These provisions are aimed at ensuring that a debtor will:

  • not lose his home.
  • not be deprived of the means of working, and
  • in the home, will be left with essential furniture and other equipment.
 
 

 

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