Being in debt is the most devastating situation. It’s a maze where you cannot find any way out. However, there is a solution for this and that is, ‘The Debt Arrangement Scheme’ (DAS). It’s the most effective as well as a popular way of repaying debt, helping you to get back on your feet quickly. Mentioned below are the advantages that you will get by the DAS system so that you can apply for the debt arrangement scheme.
Advantages of Debt Arrangement Scheme (DAS)
Debt Arrangement Scheme or DAS is a government-tool as well as an alternative to insolvency for many with big debts. Launched in 2004, it allows a debtor to pay back whatever the amount they owe to the creditors, over an extended time. Moreover, if the payments are controlled, the lenders cannot sue the debtors.
Following are the benefits of the system –
- Makes all debts one
As per the system all your credit card bills, unsecured loans and bank overdrafts are combined into a single as well as cost-effective monthly payment which you can pay to the DAS administrator.
- Provides extra time to repay the debts
It gives you an extended time period to pay the debt, helping you to focus on other aspects of life. Getting a prolonged time period of repayment releases stress giving you moral confidence for paying the debt.
- You will get free advice
This is the biggest benefit of the system! You will get a well-trained monthly debt advisor for free. The debt advisor will help you set up debt payment plans (DPP) basing on your financial circumstances of that time and get it approved from the creditor. The creditor will get a time period of 21 days to approve or disagree with the terms, however, it will not affect your DPP approval.
- No chance of threat of creditor’s legal action
This system disables the lender or creditor to take you to the courtroom if you are successful in making your monthly payments. Once your DPP is approved, the creditor cannot take any kind of action for sequestration of you, your earnings as well as your property attachments.
- Changes with your circumstances
The repayment system changes with your financial situation, but do not increase as long as you strictly follow the repayment arrangement. If your income goes down due to job loss or any kind of illness, the DAS administrator might call for a payment break or extend the payment period.
- Freezes all interests, charges and fees
During the phase of repayment of the debt, all the interest, fees and charges are cancelled and no more charges are added.
- Enables you to repay the full amount
It gives you time to rebuild your financial condition and gain confidence in yourself to pay the debt. Thus, help you to pay the full amount that you owe.
- Your assets are not included in the debt
Unlike other systems your assets are not considered as a part or way to repay your debt, hence you can have authority over your property solely.
Due to the high level of administration efforts needed in processing a DAS case the scheme has is being recently overhauled to make the process more easier and efficient. At present in DAS, AiB appoints a panel of payments distributors (PDs) who are contracted to facilitate the payment process between a debtor and their creditors. In most cases, the PD organisation and the money adviser organisation are different.
This can be confusing for creditors and debtors, who may in any event prefer to deal with one organisation to obtain advice, support and information about their case rather than must discuss personal information with more than one adviser. For a more holistic approach, AiB proposed that private sector money advice organisations or free-to-client advice organisations (known as a Continuing Money Adviser – CMA) with appropriate FCA permissions will manage the entire DAS process for their clients.