Scottish Government announces £200m is repaid through DAS

28th March 2018

The Scottish Government has announced that over £200 million of debt has been repaid since the reform of the Debt Arrangement Scheme (DAS) in 2011, Minister for Business, Innovation and Energy Paul Wheelhouse has announced. More than 6,000 people have now completed a debt payment plan through the scheme.

Wheelhouse also announced a raft of improvements to DAS which seek to make the scheme even more of an appealing product to those in Scotland struggling with problem debt. DAS was launched by the Scottish Government in 2004 and is administered by Accountant in Bankruptcy. Since the process was reformed in 2011 to widen access to the scheme, over £200 million has been repaid through DAS.

The Minister said: “The Debt Arrangement Scheme is currently the only statutory debt management plan in the UK and has proven to be a valuable tool for helping people suffering from unsustainable debt back onto their feet. It is a testament to the remarkable success of DAS that the UK Government is looking to introduce a scheme which freezes interest rates and charges on debts and gives debtors much-needed breathing space across the whole of the UK, very much modelled on DAS. This demonstrates that Scotland continues to lead the way when it comes to issues of personal debt management and debt relief.”

“Over £200 million has now been repaid through DAS since the new regulations opening the scheme up to more people who need help were introduced seven years ago. But we refuse to take the success of DAS for granted, which is why we’re introducing changes to exclude housing debts from debt payment plans should debtors wish, and remove the requirement for debtors to contribute every penny of their surplus income.These changes make DAS more flexible, helping encourage more people to consider the scheme as a viable method for bringing their finances back under control and one that creditors can have confidence in.”

Debt charity StepChange is helping around 2500 people in Scotland repay their debts through DAS. Head of StepChange Scotland Sharon Bell said: “We welcome the announcements today. Scotland is pioneering responsible debt repayment programmes that give people with problem debt a fair chance to repay. The Debt Arrangement Scheme offers our clients an opportunity to regain control of their finances and provides breathing space protections from unfair charges, harassment or repossession, which lead the way in the UK.”

“Every pound repaid represents a burden lifted from the shoulders of those who are responsibly trying to repay their debts and make ends meet. 2017 saw nearly 20,000 people in Scotland contact StepChange for help, the vast majority as a result of life events such as illness or unemployment they could not have expected or planned for.”

AiB carried out two consultations into DAS during 2016 and 2017 to review the changes to the legislation made in 2013 and 2014. Responses to these consultations broadly agreed the changes introduced in recent years had met their intended outcomes. However, some industry respondents also recommended a number of improvements. Feedback suggested that the compulsory inclusion of mortgage and rent arrears could result in debtors facing difficulties in their housing situations and proposed debtors should be able to exclude these debts if they so wish.

The consultations also highlighted the requirement for all surplus income to be included in a debt payment programme be removed.In future, to strike the right balance of fairness to both creditors and debtors, debtors will be able to choose the level of payment they offer to the scheme and creditors will be able to consider this sum when choosing to accept or reject the proposal.