1. MINISTERIAL FOREWORD
In the current financial climate many people are finding themselves in a situation where they are unable to repay their debts in full as they fall due. The Scottish Government has a responsibility to support the people of Scotland by providing mechanisms to allow them to take control of their debt. I am therefore issuing this consultation to ask you to contribute to the future of one of Scotland's debt management mechanisms, the Debt Arrangement Scheme ( DAS).
The Debt Arrangement Scheme was introduced in November 2004 by the Debt Arrangement and Attachment (Scotland) Act 2002. DAS allows those who enter the scheme time to repay their debts in full over an extended period. Currently access to the scheme is only through an approved money adviser. Debts are repaid through structured Debt Payment Programmes ( DPPs) which allow people to make regular payments without the fear of action from their creditors. In many cases, the extended repayment period will allow those people breathing space to get back on their feet. For those with mortgages, as long as they continue to service their secured debts, the family home is protected from repossession.
Since inception, the number of people participating in DAS has been lower than anticipated. As a result, changes were made to the scheme in June 2007 which allowed charges and interest on debts in a DPP to be frozen.
A review conducted last year concluded that DAS worked well for those who were able to access the scheme. However, it highlighted that access to the scheme is varied across the country thus there is a need to consider what can be done to extend access to a much wider group of people.
In order to develop the scheme I have set out a number of questions for your consideration. I invite comment from the public and interested parties to help shape the future of the Debt Arrangement Scheme and thereby contribute to a wealthier and fairer Scotland.
I look forward to receiving your comments which will greatly assist in the further development of a robust and effective debt management tool for the people of Scotland.
