Court Orders – Changes to Scottish Debt Arrangement SchemesWednesday, June 17th, 2009
The Debt Arrangement Scheme (DAS) was introduced by the Scottish Parliament in November 2004 to provide a means for debtors to repay their debts in full over a period of time without the threat of legal action or diligence (e.g. the use of earnings arrestments, the Scottish equivalent of attachment of earnings orders). The scheme allows debtors to make a single regular payment, by credit card, direct debit, standing order, or by payroll deduction. If the payments are to be made by deduction from wages, employers are obliged to make the deductions if they are served by the employee with a Payment Mandate.
An important requirement of the Scheme as it was originally introduced was the involvement of a “money adviser”, who would advise and assist the debtor in preparing a “debt payment programme” and liaise with the creditors.
A review of the DAS in November 2008 indicated that, although the Scheme was effective for those who were able to make use of it, the requirement to involve a money adviser was affecting the take-up of the Scheme. As a result, the Scottish government decided to remove the role of the money adviser completely from the procedures, although individuals may still consult an adviser if they wish.
The change, which is effective from 1 July 2009, involves a considerable number of amendments to the Debt Arrangement Scheme (Scotland) Regulations 2004, to remove references to money advisers from the procedures and forms, and transfer most of their duties to the DAS Administrator, to whom online applications to join the Scheme will now be made.
The changes, as they affect employers, are as follows:
- form 6, the Payment Mandate issued by the debtor to the employer, no longer includes a money adviser’s name and address
- the employer must make the payments as instructed until the mandate is recalled by the debtor (because payments are to be made in some other way) or a notice is issued by the DAS Administrator (no longer by the money adviser).
The Debt Arrangement Scheme (Scotland) Regulations 2004
The Debt Arrangement Scheme (Scotland) Amendment Regulations 2009
Executive Note to the Debt Arrangement Scheme (Scotland) Amendment Regulations 2009
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