A payments distributor may make no charge of any kind to a debtor, and the DAS Administrator’s fee may not be charged to you either. What a Debt Arrangement Scheme costs sets out the whole cost picture.

What the fee does change is what your creditors receive. That is the part almost nobody explains, and it is the part below.

It is taken from the sum due to each creditor in each distribution, before that creditor is paid. For an individual the rate is fixed at 20 per cent, including any VAT incurred.

The rate, and the date it changed

Twenty per cent for an individual, under regulation 17(2) as substituted by SSI 2019/315 with effect from 4 November 2019. For Business DAS it is a ceiling rather than a rate, because a distributor may charge no more than eight per cent.

The substituting instrument was the 2019 amendment regulations, in force 4 November 2019. Legislation websites showing 8 per cent for an individual are displaying the original 2011 wording.

What the fee is charged on

It is charged on the sum due to a creditor in a distribution, not on your total debt up front. So it arises as each payment is shared out.

Descriptions along the lines of 22 per cent of your total debt land in roughly the same place arithmetically, but they are not the mechanism the regulations use.

It is a rate, not a ceiling

For an individual the regulation says the distributor must charge the fee and that it is 20 per cent. For a legal person, trust or unincorporated body it says the fee may be charged and must be no more than 8 per cent.

A programme applied for before 4 November 2019 is not affected, and keeps the old eight per cent distributor fee. What a payments distributor is covers who they are and what they do.

To the Accountant in Bankruptcy, as the fee for considering an application for approval or variation. Regulation 5(2) says it may not be charged to the debtor and is charged to all creditors taking part.

How it is measured and collected

Regulation 5(3) puts it at 2 per cent of any sum due to be paid to a creditor in a distribution, and requires it to be paid from the sum due to each creditor. The payments distributor remits it.

So it moves with your payment rather than sitting as a separate bill. AiB’s guidance on fees applied to a DPP says the fees are sent at the same time as the distribution to creditors.

The order in which the money moves

Not while the programme runs. Your creditors receive 78 pence in every pound, so the balances they hold come down by that, and the fee element is written off at the end.

What the creditor sees

AiB tells creditors that on a completed programme they will receive payment of 78 per cent of the debt, and that the client does not pay the fees because they are borne by the creditors.

That is the arithmetic of a 20 per cent and a 2 per cent deduction from each distribution. It is not a discount you have negotiated, and it is not a shortfall you owe.

A worked example

On a payment of £260, which was AiB’s median monthly contribution for 2025-26, £52 goes to the payments distributor and £5.20 to the DAS Administrator. Your creditors share £202.80.

You have still paid £260 that month, and £260 comes off what you have to pay in total. Nothing has been added anywhere.

What you owe

You repay the debt in full. The fee is the creditors’ cost of using the scheme rather than an extra sum charged to you.

A Debt Arrangement Scheme writes off none of the money you owe. Interest, fees, penalties and charges stop, so the balance stops growing, but the principal is repaid to the last penny.

Whether a Debt Arrangement Scheme writes off any of your debt deals with the advertised percentages.

AiB’s guidance for money advisers directs that creditors must write off the sums paid as fees to the DAS Administrator or the payments distributor. On completion the client cannot be held liable for further payments towards the debts in the programme.

The provision behind it

Frozen interest, fees, penalties and other charges cease to be owed if and when the programme is completed, under the 2011 interest, fees and charges regulations. Whether a Debt Arrangement Scheme freezes interest and charges covers the freeze itself.

Completion is marked by a notice of completion under regulation 46, sent by the payments distributor. What happens when your Debt Payment Programme ends covers what you receive and what should follow.

What a creditor may not do meanwhile

Regulation 33(1)(c) prohibits a creditor from trying to persuade you to withdraw from the programme, or to make additional payments towards a debt included in it.

So a creditor unhappy about receiving 78 pence in the pound has no route to you for the difference while the programme runs.

Completion is the trigger

The write-off is expressed to operate if and when the programme is completed. A programme that is revoked is a different position.

That is a good reason to ask for a variation rather than to stop paying. Why a Debt Arrangement Scheme is revoked sets out the grounds.

The distributor’s fee for an individual’s programme went from a ceiling of 8 per cent to a fixed 20 per cent, so a creditor’s recovery on a completed programme moved from at least 90 per cent to 78 per cent.

Which programmes each rule applies to

What the scheme returns to creditors

AiB’s annual statistics for 2025-26 record around £68.9 million repaid through DAS in the year, of which £54.7 million was repaid to creditors.

That is the fee structure in aggregate. It is also why the scheme does not need a charge to the debtor to run.

The other thing that changed on the same day

Since 4 November 2019 a programme for an individual is approved where not less than nine tenths in value of the creditors consent, under regulations 23(1)(a) and 24(1) of the Debt Arrangement Scheme (Scotland) Regulations 2011. Whether all your creditors have to agree covers the threshold and what happens below it.

The fee change and the consent change were made by the same instrument. Neither of them touches a programme applied for before that date.

Not to you. Whoever distributes, the regulation forbids any charge of any kind to a debtor.

Where AiB is the distributor

AiB’s fees guidance describes applying a 5 per cent fee for administration costs in that case, with the remaining 15 per cent able to be returned to the adviser organisation or remitted to the Scottish Government for advice provision.

That split appears in guidance and not in the regulations, which state a flat 20 per cent for an individual. It changes nothing on your side of the arrangement.

Substitute distributors

A programme can move to a different payments distributor during its life. Regulation 13(2) of SSI 2019/315 carves regulation 4(3) to (5) out of the general saving for transfers made on or after 4 November 2019.

None of that creates a charge to you. Regulation 17(1)(a) prohibits a payments distributor from making a charge of any kind to a debtor.

Who approves a distributor

The DAS Administrator approves who may act, and your money adviser nominates one when the application is made. What a payments distributor is explains the role, and how your payment is calculated explains the figure they collect.

A trust deed also takes its fees out of what creditors would otherwise receive. A Debt Management Plan is informal, and a provider may charge the debtor directly.

The three side by side

The trust deed comparison is worth understanding properly, because the products do different things. What a protected trust deed is sets out the insolvency route.

Why the comparison matters

In the statutory scheme the fee is a deduction from a creditor’s recovery, and the regulations forbid any charge to the debtor. In an informal plan a provider may charge you directly.

That is the difference the question is really about. In a Debt Payment Programme every pound you pay is a pound off what you owe, and the fee never reaches your side of the ledger.

The practical test

If someone quotes you a fee for arranging a Debt Payment Programme, ask which product the fee is actually for. Choosing between a Debt Arrangement Scheme and a Debt Management Plan covers the difference.

Free advice is available from Citizens Advice Scotland and National Debtline, and our Debt Arrangement Scheme page explains how we help.