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How to get out of debt using a Debt Arrangement Scheme

The Debt Arrangement Scheme is available to residents of Scotland who are having difficulty paying back their debts. The scheme allows the debtor to make repayments at a slower, and much more affordable, rate and still allows them to live comfortably. There are some important factors you need to take into consideration before entering a Debt Arrangement Scheme, and they include the fact that any valuable assets you may own, such as a home or car, will not be affected in any way.

This makes the scheme an attractive proposition for many Scottish residents who are finding it hard to cope with mounting debt. With a Debt Arrangement Scheme you are paying back the full amount you owed minus any interest and fees, so the amount that you owe before you enter the agreement is the final amount you will pay at the end. This means that even though you’re making smaller payments and it will take you longer to repay, it’ll be much easier to keep on top of things.

Payments on the Debt Arrangement Scheme are designed to be affordable, based on what you can contribute after you’ve covered your essential costs. This includes mortgage payments, food and household bills. A Debt Payment Programme will be drawn up to show your creditors how much you can afford to pay each month, and once accepted they won’t be able to hassle you or take you to court providing you stick to the plan.

To enter a Debt Arrangement Scheme you must first agree a Debt Payment Programme, before a DAS Approved Advisor goes through your accounts and judges your ability to make the agreed repayments. Once the terms are agreed then the debtor can pay a lump sum every month, and as the scheme is enforced by the Government then creditors can’t take any further action. If a situation arises where you suddenly have less money at your disposal, such as through the loss of a job, then you will have a good case to apply for a variation in the scheme. However, if you simply miss payments without providing any warning then the agreement could be terminated within a matter of months, and your creditors could return to charging fees and interest on top of what you owe them.

Anyone entering a Debt Arrangement Scheme will receive some respite from debt problems, and it’s a lot simpler to pay off your debts when you have one, manageable monthly fee to keep on top of. However, the scheme will have a detrimental impact on your credit score, as although you aren’t missing any repayments, you are still arranging to pay them back at a later date than originally agreed. Another disadvantage is that debtors won’t be able to take on any more unsecured debts while the scheme is in place, unless allowed to do so by the administrator.

A Debt Arrangement Scheme can prove very useful, and it’s helped thousands of people across Scotland pay back their debts. However, before entering a plan like this it’s always best to seek out free, impartial advice from experts. At Council Tax Advisors we’ll listen to your situation and we’ll be able to inform you about the best route to take next. Together we can tackle your money problems and get you on the road to financial stability.

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