The New

Debt Arrangement Scheme

MATRICS would like to thank both the Scottish Government and the Accountant in Bankruptcy for

their continued support and funding

Policy Objectives of DAS

• Enable people to resolve serious debt problems in a dignified way;

• Reduce the need for creditors to take legal action to recover their debts;

• Extend the benefit of money advice to those people who have a particular need for it;

• Improve the quality of money advice, through training money advisers;

and• Minimise the impact of bad debt on both debtors

and creditors.

Need for Reform

• Take up-lower than expected• Coverage across Scotland-not uniform• Post code lottery• Some areas-more chance of seeing Nessie• Creditor participation-very low

butWorking for those who can access it

Protects the debtor’s homeProtects against diligence

Powerful tool for money advisers

Key changes-OverviewNew regulations SSI 2011 No 141 intend to:

• Widen the Money Advice Gateway.

• The DAS Administrator will take over the

ongoing administration of DPPs from free sector

money advisers.

• New Computer system accessible by Money

Advisers, creditors, payments distributers and

the DAS Administrator

Key Changes - Overview

• Introduce a payment holiday of six months for debtors experiencing a reduction in disposable income by 50% or more.

• Introduce Joint DPP for couples where they have a joint and several debt liable.

• Introduce Single debt DPP but not appropriate when debtor paying under a Time to Pay Direction or Order or a Time Order.

Key Changes - Overview

• Debtor must make first payment under the DPP within 30 days of approval

• Debtor must complete and submit tax or duty returns when due

• DAS Administrator will automatically revoke a DPP if the debtor grants a trust deed and it becomes protected

• Where Joint DPP revoked and debtor applies within 21 days for DPP in own name creditors cannot add interest, fees or charges – Reg 4 DAS (Fees) Regs 2011

The Advice GatewayMore individuals can be approved to be DAS

money advisers. These include:• Existing approved money advisers.• Qualified insolvency practitioners. an employee

given authority by that insolvency practitioner.• A money adviser for an organisation which is

accredited at Type 2 level or above against Scottish National Standards for Information and Advice Provision;

• Advisers working for a citizens advice bureau• Local Authority money advisers• Under Reg 9 DAS regs 2011 DAS Admin

satisfied fit and proper person to be a money adviser

The Advice Gateway (contd)

Benefits of the proposed changes:• Debtors will continue to receive face to face

advice.• Solution to the 'postcode lottery'.• More advisers can offer DAS.• Less administration for free sector advisers,

meaning advisers are freed up, to see more clients.

• Increased debt options for debtors• Holistic approach to debt solutions

The Application ProcessThe debtor: • Cannot apply for their own DPP• Can use the services of a private

or free sector Money AdviserThe money adviser:• Completes an application form which

is sent to the DAS Administrator (via the system).• A fee charging money adviser must inform the debtor

that advice and access to DAS is free elsewhere.The DAS Administrator:• Records the application In the DAS Register (allowing

protection earlier) • Submits the proposal to creditors (for free sector

applications)

DAS applicationDebtor advice

Private sector

Free sector

The DAS System

• DAS Administrator will administer all free sector DPPs.• Private sector DPPs will be administered by the private

sector money adviser• All DPP administration will be conducted on the DAS

system• Creditors will log in to the system to consent or refuse

proposals.• DAS Administrator will supervise the process and make

F&R decisions where appropriate.• Notices will be generated from the system regardless of

the party conducting administration.• A side project will be run to create a database of creditors

Payment Distribution• The regulations have changed so that AiB

have to conduct a tender exercise to approve payments distributers

• The DAS Administrator will charge an application fee which is 2% of sum distributed to creditors – collected by the payments distributers

Approved Payments Distributers

Benefits:• Appointed through open/transparent

tender exercise• Better service-reduced costs to creditors• Charge a maximum of 8%• More competition through competitive

tender for distributers.• Tendering contracts will ensure the best

returns for creditors.

Approved Payments Distributers

The AIB has awarded contracts to:

Carrington Dean,

Begbies Traynor,

MLM and

Gregory Pennington now Think Link

To be the payments distributers

Debt Arrangement Scheme Hub(DASH)

• Dedicated web portal

• Access to case management system

• Able to check status of cases

through

www.dasscotland.gov.uk

Reject?Accept?

Proposals to creditors

Dualroutes

DAS/DPP Application

AIB/DA adminin free sector

Self admin in private sector

Private Sectoradviser

Free Sectoradviser

DEBTOR

DPP approvedFair & Reasonable

Test applied

Accept?

Reject?

Payment Distribution to

creditors

DPP falls

AIB/DAS

Computer

Administration

System

The DASH Computer System

Future help and support may be found at:AIB Helplines:Open from 9:30am to 4:30pm Monday to Friday. Tel:0300 200 2770Fax:0300 200 2601PostDAS Administrator Accountant in Bankruptcy 1 Pennyburn Road KilwinningAyrshire KA13 6SA

or

Money Advice Consultancy Service:T: 0845 123 2326

E: consultancy@matrics.org.uk