Write Off Unaffordable Unsecured Debts
With A Scottish Trust Deed...
Debt Arrangement Schemes in Scotland
Debt Arrangement Scheme Scotland (DAS) first went into effect in 2004 and was upgraded on 1 July 2011. It is a legislated debt arrangement program. The debtor makes payments, through a debt payment plan (DPP) to satisfy creditors.
The DPP allows a person who is burdened by bills to repay them over a period of time, with the payments adjusted to their income. It offers protection from creditors who might otherwise take legal actions, such as making it illegal for them to sequestrate (bankrupt) or use diligence (enforcement) against the debtor. The length of time a DPP is in effect can be any that is reasonable.
A great advantage of this plan is that it allows a person to honourably pay their obligations. As a rule, there is no charge for DAS by approved money advisors at the Citizens Advice Bureau or local authorities.
DAS Benefits For Debtors
There are other benefits of DAS as well. The debtor has the advice of people who are experienced in money management and can repay obligations while retaining money for regular expenses. This relieves a great deal of anxiety and strain that is produced by harassing mail and phone calls. In addition, after the debts are paid, it will help the debtor to regain a good credit record.
DAS Benefits For Creditors
It also has benefits for the creditors. Knowing that the debtor has sought advice and the fact that a knowledgeable money advisor will assess the income and expenditures, assures them that they will be paid at least 90% of the debt. In addition, they will not have to expend any more debt recovery costs, and they will have confidence in the knowledge that a Debt Arrangement Scheme Administrator is overseeing the DPP.
Setting Up A DAS
It is very simple to set up a Debt Arrangement Scheme. This debt management tool is the answer to someone who finds themselves with more liabilities than they can pay. A number of things such as illness, lowered wages or other circumstances may cause this situation. There is no shame in owing more than can be paid. The shame is when a person does nothing to relieve the situation.
Money Advisor Assistance
A experienced money advisor will assist anyone in this situation develop a DPP (debt payment plan). The affordability of the plan will be calculated by analysing the amount owed and the amount of income. When making this assessment, allowances will be made for ordinary expenses such as household necessities, council tax, transport, utilities, personal needs and so forth. Rent, mortgage, benefits, and child support arrears payments, cannot be included in the DPP.
Once the expenses and the income have been identified, the amount of money left, known as "disposable income", is what will be paid the creditors. They have 21 days to respond to the determined payment plan. Since the repayment is usually less than what was contracted for, some might disagree. Even if this happens the money advisor can still present the program to the DAS administrator for approval. If it is approved, then one payment a month is made to a payment distributor. If a creditor objects and it is found that the debtor cannot pay the monthly payment and should be sequestered, or if they have other assets, such as property, that can be liquidated, their objection may be upheld.
When Circumstances Change
The DAS is constructed in such a manner that it is realized that a person's circumstances may change. The money advisor can adjust the payment to increase, such as getting a raise, or decrease, such as becoming ill, job problems, the payment. In this regard, it is very flexible and is beneficial to the debtor. There have been changes to the original debt arrangement scheme Scotland enacted, which was written in 2004.
1 July 2011 Changes
Effective July 1, 2011 changes allow debtors with only one obligation to use the plan, formerly it was two or more. Insolvency Practitioners can now make application for DPP approval, a debtor can take a payment break if their income drops 50%, and it makes it possible to use a web-based approach, rather than the previous paper one. These debt arrangement scheme Scotland changes make it much easier for a person to repay their debts.