Debt Arrangement Scheme
Debt is one thing that has been getting people into trouble since the dawn of time. The difficult thing about it is that it cannot really be outlawed. Some people need to borrow money, while others have a bit in excess, so there the business begins. Some people, with careful planning and proper execution, are able to establish businesses, pay of debt and then proceed to make a collection of wealth on their own. Others, with bad planning and perhaps a bit of bad luck, just lose everything and get stuck in a hole deeper than when they first started out.
Due to the recognition that debt is a need, the Scottish government made rules that would allow people with bad debts to get out of the rut that they are in. The first movement, a prelude to the Debt Arrangement Scheme, started in 1987. At this time, certain actions were dictated by the courts, covering when the debtor when to pay and when the collector can collect. The only down side of the rules was that they covered single debts alone. Those with multiple debts did not get the luxury of governmental support. That all changed in 2004, when the Debt Arrangement Scheme was introduced. This scheme allowed people who had multiple debts to get help without going through court.
In 2007, the Debt Arrangement Scheme underwent a couple more changes. This was mainly in the way the debtor indicated that he planned to apply for the Debt Arrangement Scheme (now widely known as DAS), and how the interest rates, fees, penalties and charges for those loans were frozen so that the debtor could get some leeway in the payment of his debt.
As the economic landscape has been changing over the past years, the Scottish government has been looking for ways to make sure that their people are able to cope with the tough times. The DAS has seen a few more changes as a result, and this includes those debts that involve the use of assets of the debtor as a guarantee. Even those with collateral will be able to apply for DAS if they are unable to pay their loan. Also, under the new DAS agreement, the interest rates and penalties become frozen as soon as the DAS administrator submits the application to the creditors.
The adjustments made to the Debt Arrangement Scheme were not just in the area of economics. Recently, joint applications could be made on debts that had more than one liable person. A good example of this would be the debt shared by a couple such as a husband or wife. This is not an exclusive right to married people though, as civil partners could also claim the same as well as those who lived together as husband and wife but are of the same gender.
Payment breaks are now available for people certain people, but they are only allowed under specific circumstances. A payment break can extend for as long as six months, but this also meant that the same amount of time will be added to the payment timeframe (let us say a person is granted a three month break on a six month payment scheme. The said person will not pay for three months, but will still need to complete the six month term afterwards). This can only be granted if the debtors disposable income (this is the amount of money a person has after all necessary expenditures are deducted) is suddenly slashed by half, and for the following reasons:
- The person goes through a time of unemployment
- The person goes through an illness
- The debtor goes through a separation
- The person who shares the debt with the debtor suddenly dies
In short, the DAS was conceptualised and then modified to make sure that it helps all the people who are in need. Also, it is not one sided as it makes sure that the debt is still paid. It only gives the debtor time to get back on his feet and get himself together so that he would be better equipped to settle whatever debts he has.