What goes in is the arrears. The ongoing payment and the rest of the mortgage balance stay outside whatever you decide, and which debts can and cannot go into a programme covers the wider list.

The choice is real and it has consequences on both sides. This is what each one actually changes.

Only the arrears. A sum due under a lease or tenancy agreement is a debt for these purposes, and so is a sum secured by a standard security to the extent that it is arrears of a periodic payment due under the loan.

Rent

Arrears under a tenancy fall inside regulation 3(1)(a)(iv), whether you rent from a council, a housing association or a private landlord. The missed payments are the debt.

Mortgage

Regulation 3(1)(b) is deliberately narrow. It brings in arrears of a periodic payment due under the loan and nothing else, and regulation 3(2)(a) excludes the rest of the sum secured.

So the programme can deal with the payments you have missed. The rest of the loan stays outside it, and the monthly payment carries on being due.

Who your landlord is does not matter

The definition looks at how the sum arose rather than at who is owed it. Arrears to a council, a housing association or a private landlord are treated alike.

The same goes for a lender. A high street bank and a specialist lender are ordinary creditors in the programme.

The whole picture in one table

Rent and mortgage arrears on your sole or main residence are the exception. Regulation 20(2AA), which has applied since 29 October 2018, lets an individual leave them out rather than requiring it.

It is an exception, not the default

Regulation 20(2A) requires the programme to provide for every debt you owe at the date of the application that a programme can cover. Regulation 20(2AA) is the one carve-out, and it applies only to an individual and only to the sole or main residence.

mygov.scot puts the same point in plain terms, listing rent and mortgage arrears as debts you can choose whether to include.

Why people leave them out

An arrangement with a landlord or lender that is already working does not have to be disturbed. Keeping the arrears outside leaves that arrangement in place.

Anything left out sits outside the programme’s protection as well as outside the programme. Interest and charges on those arrears are not frozen, and diligence for them is not recalled.

Excluded arrears are also disregarded in the £2,000 further-credit calculation, which is covered below.

Why people put them in

Inside the programme the arrears stop attracting interest, fees, penalties and charges, and they are paid out of the same monthly figure as everything else.

There is one payment to budget for rather than two, and the landlord or lender is bound by the programme like any other creditor in it.

Arrears on any other property

A second property, a let property or a former home is outside regulation 20(2AA). Arrears there are ordinary debts and regulation 20(2A) requires them to go in.

They carry on exactly as before. Your current rent or mortgage payment is a continuing liability, and paying it when it falls due is a standard condition under regulation 27(2)(c).

Why they cannot go in

A programme deals with what you already owe. Putting this month’s rent into it would mean paying the same liability twice over the life of the programme.

The assessment builds the ongoing payment into your expenditure before the surplus is worked out. How a Debt Arrangement Scheme payment is calculated explains that.

If you fall behind again

New arrears are not covered by the programme, and failing a standard condition without reasonable cause is a ground for revocation. Why a Debt Arrangement Scheme is revoked sets out the grounds and the notice you get.

Tell your adviser before the payment is missed rather than after. How to vary a programme when your income changes is usually the answer.

It brings the landlord or lender inside the programme as a creditor, with interest and charges frozen and payment made pro rata out of your single monthly figure.

The two choices side by side

What the creditor gets

Fees come out of what is distributed to creditors rather than being added to your debt, and the Accountant in Bankruptcy puts a creditor’s recovery on a completed programme at 78 per cent of the debt, for applications made on or after 4 November 2019.

Creditors on programmes applied for before that date receive at least 90 per cent. The older distributor fee was no more than 8 per cent rather than 20.

The fee comes out of what is distributed to creditors rather than being added to your debt. Your creditors fund the scheme out of what they receive.

Whether DAS fees are taken from your payment or added to your debt explains the mechanism, and what a Debt Arrangement Scheme costs sets out the figures.

How the money is split

You make one payment to an approved payments distributor, which shares it out pro rata. A landlord owed a tenth of your total debt receives a tenth of each distribution.

Adding large arrears to the programme therefore changes what every other creditor receives each month, without changing what you pay.

What you get

Interest, fees, penalties and other charges stop being owed on the debts in an approved programme, under the Debt Arrangement Scheme (Interest, Fees, Penalties and Other Charges) (Scotland) Regulations 2011. Whether a Debt Arrangement Scheme freezes interest and charges covers what happens to those sums at the end.

Leaving the arrears out means none of that reaches them. You are then running a separate arrangement on top of the programme payment.

Arrears you keep out under regulation 20(2AA) are disregarded when the £2,000 further-credit limb is worked out. That is a genuine advantage of excluding them and almost nobody mentions it.

The rule itself

An individual may take credit up to £2,000 without a variation, but not where they already owe £1,000 or more outside the programme, disregarding excluded rent and mortgage arrears on their home.

The permitted credit is £2,000. The disqualifying figure is £1,000 of other debt, and the two are easy to transpose.

Why the disregard matters

Without it, excluded home arrears would sit outside the programme and count towards the £1,000, which could shut off permitted credit for someone who had done nothing wrong.

Regulation 33(1)(b)(ia) says so expressly, and it came into force on the same day as the exclusion itself. Which debts can and cannot go into a programme sets out the rest of the permitted credit.

For a debt inside the programme, it is not competent to serve a charge for payment or to commence or execute diligence to enforce it. Approval also recalls any arrestment of your income or property.

What the protection attaches to

It attaches to the debts the programme covers. Arrears you keep out are not debts the programme covers, so the protection does not reach them.

Approval recalls any arrestment of your income or property, and notice of the recall goes to the employer or to whoever is holding the arrested funds.

The one that is not settled either way

Inhibition is not named anywhere in the recall provisions, and no source settles whether one already registered is recalled on approval. Ask your money adviser what applies to yours.

What no source settles

What is prohibited is a charge for payment and the commencing or executing of diligence. Whether a creditor may still raise an action is not settled by any source.

Nothing we can rely on addresses what an approved programme does to eviction or repossession proceedings. Anyone facing either should take housing advice alongside money advice, and should not assume a programme is a defence.

Your home is an excepted asset

A dwellinghouse or mobile home occupied as your sole or main residence is an excepted asset under regulation 28(3)(a), so a condition to realise it cannot be imposed on you.

Since 29 October 2018 regulation 28(4) allows such a condition at the debtor’s own option, and whether you will lose your home in a Debt Arrangement Scheme covers what that does and does not mean.

Whether the property is your sole or main residence, whether the ongoing payment is affordable, and what a separate arrangement with the landlord or lender would look like.

The questions worth asking

Timing

The application takes the arrears as they stand on the day it is submitted. Anything that accrues afterwards is a new liability outside the programme.

Get both kinds of advice

Money advice and housing advice answer different halves of this. Citizens Advice Scotland and National Debtline both publish guides to the scheme, and neither charges.

Once you have decided, the application takes the arrears as they stand at that date. How to apply for a Debt Payment Programme sets out the timetable, and our Debt Arrangement Scheme page explains how we help.