Who Uses the Debt Arrangement Scheme?
3rd October 2011
The Accountant in Bankruptcy has released the 2011 review of the DAS . It includes some fascinating information about the circumstances in which debtors and their Debt Arrangement Scheme (DAS) approved money advisers consider the Debt Arrangement Scheme to be a viable option.
Usage of the scheme is on the increase. In 2010/11, 1,910 people went ahead with the Debt Arrangement Scheme compared to 1,417 the previous year and just 386 in 2008/9. Adviser and public-awareness of the scheme appears to be increasing. Despite this, around a third of approved money advisers who could have set up a Debt Arrangement Scheme failed to set up a single one during the 2010/11 year.
While adviser and debtor involvement in the Debt Arrangement Scheme is on the increase, creditor engagement remains limited. When asked to accept or object to a DPP (Debt Payment Programme under DAS) 87% of creditors did not reply at all. For the purposes of setting up a Debt Arrangement Scheme this isn’t an issue; a failure to respond is deemed to be acceptance of a Debt Arrangement Scheme going ahead.
The average Debt Arrangement Scheme is due to run for around eight and a half years. 15% are expected to last between ten and fifteen years and around three per cent even longer than this. How long a Debt Arrangement Scheme will run for depends on how much debt exists and how much the affordable monthly repayment is in comparison to this debt total.
The average debt total in a Debt Arrangement Scheme is £24,194. Most schemes in fact involve debts of a value of less than £25,000 but the figures are skewed upwards by a comparably small number of schemes with much higher debt totals (sometimes in excess of £100,000).
Most people starting a Debt Arrangement Scheme are aged between 30 and 59 years old. This situation is comparable with other debt solutions such as a debt management plan or a trust deed. The scheme is, however, accessed regularly by persons that are either younger or older than this.
The average monthly payment into the Debt Arrangement Scheme is £249. 74% of those using DAS pay less than £300 per month (though it should be remembered that payments are based upon affordability rather than any other form of expectation). Older debtors are typically in a position to make higher monthly contributions to a Debt Arrangement Scheme than younger debtors.
It appears likely that use of the Debt Arrangement Scheme will continue to grow in the coming months and years. The Debt Arrangement Scheme is increasingly being promoted (and public awareness of the scheme is growing) now that the private sector has become involved in the scheme. This is also one reason that the number of advisers able to set up a Debt Arrangement Scheme is increasing.
Where a debtor has the capacity to make a reasonable payment towards their debts each month, and the likely repayment term is realistic, many will consider the Debt Arrangement Scheme to be preferable to formal insolvency procedures such as a trust deed or bankruptcy. It also provides much greater protection than an informal debt management plan given the inherent guarantees of frozen interest and protection from legal debt recovery action.
To find out more about debt management options, including trust deeds, debt management plans and the Debt Arrangement Scheme, get in touch with professionally qualified debt advisers like those at www.Trust-Deed.co.uk. The team at www.Trust-Deed.co.uk is made up of experienced debt advisers who will be able to talk you through your options and help you to identify the best solution for you. To learn more about the Debt Arrangement Scheme, browse the website or use the forum to get in touch with others in similar situations to yours. Visit or call now on 0800 043 7201.
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