Use of Debt Arrangement Scheme increases

The statistics released by the Accountant in Bankruptcy today included data on the number of people that have proceeded with a Debt Arrangement Scheme.

During the first quarter of 2011/2012, 643 Debt Payment Programmes were approved under the Debt Arrangement Scheme. This represents a really substantial increase of 35% on the previous quarter and 30% versus the same period last year.

The are a number of possible explanations for the increase in the number of people using the Debt Arrangement Scheme. However, recent changes that enabled some private providers to offer the service seem to have had a significant positive effect on public awareness and take-up. A number of trust deed providers now have DAS Approved Money Advisers on their books and are able to offer the Debt Arrangement Scheme on a commercial basis.

Adding  this commercial access to DAS has resulted in better promotion of the benefits of the debt arrangement scheme. This may have encouraged a number of people to choose this option where previously a less suitable debt management plan or protected trust deed might have been selected due to a lack of DAS awareness.

Some visitors to Trust-Deed.co.uk have previously made us aware that they were experiencing difficulty or delay in setting up a debt arrangement scheme due to restricted resources among the free-to-client resources that were previously the only way to acccess DAS. Anyone considering using the debt arrangement scheme can still do so without incurring any fees by contacting free-to-client DAS Approved Money Advisers that may work locally at a Citizens Advice Bureau or with the Local Authority team. Private-sector DAS access may have filled in some geographical gaps where debt arrangement scheme access was not very strong previously.

The number of people accessing the debt arrangement scheme may also have increased as a result of increasing debt distress being experienced by many individuals and families. As reported elsewhere in this trust deed blog today, Scots are currently taking on new debts at a more rapid rate than those elsewhere in the UK. Protected trust deed and bankruptcy statistics have also been on the rise in the past quarter.   

Who is the debt arrangement scheme suitable for?

We’d suggest that anyone with significant equity in their home may wish to review the benefits of DAS prior to going ahead with a protected trust deed.

We’d also suggest that anyone who is currently struggling financially, but who can repay their debts in full within a reasonable timescale with a bit of extra help and support, should consider the debt arrangement scheme. DAS will potentially provide relief from interest and the threat of legal action while the debts are repaid. 

Finally we’d encourage residents of Scotland who are currently in an informal debt management plan to consider switching to the debt arrangement scheme. It offers a level of certainty and protection that a debt management plan cannot.