This item was published during the term of a previous administration that ended in April 2007
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Debt Arrangement Scheme
30/11/2004
A new Debt Arrangement Scheme launched today will provide free advice to people who have multiple debts.
Debtors will be able to use a new type of approved money adviser, based in Citizen's Advice Bureaux or Money Advice Centres, who will work with them to arrange individual repayment programmes.
The Executive is already providing £3.5 million per year to support money advice services, and this is being extended by a further £2 million from next April, specifically to support the placement of approved advisers for the scheme that will be fully up and running in the New Year - a time when many Scots face increased financial difficulties after a Christmas credit spree.
Deputy Justice Minister Hugh Henry said:
"In the coming months and years this scheme will help many Scots get on top of their debts, prevent these problems spiralling out of control, and help keep them in their homes.
"The scheme will provide an alternative to trust deeds or personal bankruptcy - which clearly have major long-term implications for the individuals concerned and their families.
"The scheme is also good news for creditors who will be reassured that those on a debt repayment programme will be making regular payments to clear their debt - instead of it being written off.
"Citizen's Advice Bureaux, Money Advice Centres and local authority money advice teams throughout Scotland have joined forces to help ensure this scheme is a success and provide support for those who need it. They will also be further help offered through a new debt management website.
"While the scheme will not instantly wipe out people's debt problems, it marks a major step forward in helping them reduce their credit burden and the endless stress that this can bring through free, confidential help, tailored to their individual needs and circumstances."
Citizens Advice Scotland (CAS), the umbrella body for Scotland's Citizens Advice Bureaux, and Money Advice Scotland (MAS) work in partnership through the MATRICS project to increase the availability and quality of money advice in Scotland.
Yvonne Gallacher (MAS) and Annabelle Ridley (CAS), joint managers of MATRICS, said:
"The emphasis placed by the Debt Arrangement Scheme on getting good money advice is a major step forward.
"It provides a tremendous opportunity for the money advice sector to demonstrate the excellent free service provided to clients in helping them sort out their debt problems.
"We believe the statutory approval of money advisers will further raise standards and ensure clients get the best possible advice."
Almost 200 money advisers have already undertaken training for the new scheme, and applications for approval are now being assessed with a target of 150 in place across Scotland by early next year when the scheme is fully up and running.
Each repayment programme will last as long as it needs to and can be adapted during its lifetime, as individual circumstances change, and people in the programme will receive regular money advice.
The debtor will make only one regular payment which will be distributed among his or her creditors, and the debtor will be protected from enforcement action and sequestration while the programme is in place.
The programme can be revoked if people don't keep up their repayments or breach other conditions of the programme, and it will not compel creditors to freeze or cancel debts.
The legislation covering the Debt Arrangement Scheme is the Debt Arrangement and Attachment (Scotland) Act 2002 and the Debt Arrangement Scheme (Scotland) Regulations 2004.