Debt arrangement scheme now in force

Debt repayment programmes aim to assist people with multiple debts manage their payments

News, 1 December 2004

A new Debt Arrangement Scheme now available 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 scheme is set out in the Debt Arrangement Scheme (Scotland) Regulations 2004, made under the Debt Arrangement and Attachment (Scotland) Act 2002.

The debtor will make only one regular payment which will be distributed among his or her creditors. The debtor will be protected from enforcement action and sequestration while the programme is in place.

The programme can be revoked if debtors fail to keep up their repayments or breach other conditions of the programme. It will not compel creditors to freeze or cancel debts.

Deputy Justice Minister Hugh Henry said:

"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."

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.