Debt Arrangement Scheme Offers Alternative to a Scottish Trust Deed

23rd July 2010

Scottish Trust Deeds have proven attractive to many thousands of Scottish residents as they face up to unmanageable levels of personal debt. However, most people remain unaware of an alternative, which in some instances could provide many of the same advantages but with fewer risks.

The Debt Arrangement Scheme (often referred to as DAS) does not benefit from the media exposure achieved by those involved in marketing Scottish Trust Deeds. This is because there’s little money to be made by private debt advice companies directing clients towards the option.

The Debt Arrangement Scheme may be of particular benefit to over-indebted homeowners who are lucky enough to have some equity stored up in their homes.

In a Scottish Trust Deed this equity would need to be released to assist in the repayment of debts to the creditors involved. That used to mean a remortgage of the home; however these are all but unavailable to those in Trust Deeds in the current lending climate. It might mean friends or family stepping in and providing the funds, but for many this simply isn’t realistic. It could also mean the sale of the home (voluntarily by the debtor, or enforced by the Trustee) if all other steps to raise funds fail.

Under the Debt Arrangement Scheme, provided creditors sufficiently agree, a home may be excluded from repayments being made towards the debt. The house would be protected from legal action or a requirement to sell, provided the Debt Arrangement Scheme payments were maintained.

Generally a Debt Arrangement Scheme will involve making payments until the debts are cleared in full, unlike the usual fixed three year period for a Scottish Trust Deed. Many worried homeowners may feel that this is a small price to pay in order to remain in their home.

More information about the Debt Arrangement Scheme is available at the Money Scotland website.

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