We have been asked by a few people the options when faced with large amount of debts and the prospect of bankruptcy and what options are still available to them at this bleak time. So in the blog post, we will discuss one option in particular called the Debt Arrangement Scheme. It is good to stress that this option is not bankruptcy, but a scheme for businesses or debtors to pay off their debts over a longer period of time that previously agreed, but giving them the safeguard that their assets are covered if they continue with their payments. For example, their homes or precious items will not be taken during the process, giving them some security and rest bite over their assets. The Debt Arrangement Scheme means you pay one monthly fee that is easy to understand, with interest and charges frozen when you agree to enter the plan.
Another big advantage of the DAS is that the creditors cannot take legal action against you once you agree to the deal. You then deal with another person all together and do not need to speak to your creditors at this time. Given the freedom just to pay that one payment each month gives the debtors a bit of breathing space in this difficult time and lets them focus on the important facts of the time, without worrying if they will lose their home, car or other valuable property.
There are of course some drawbacks to these types of schemes. Your credit rating will most likely be affected during the process and if the majority of your creditors do not agree to you being a part of the DAS, your application to the scheme may be rejected. Individuals cannot register to the scheme and only Scottish residents are able to apply and the scheme is not available to the rest of the UK.
After the payment is completed, all of your debts are wiped clean and the debtor will have a fresh start in life once more. Hopefully this overview of the Debt Arrangement Scheme has been helpful for any concerned on the matter.