Do All Your Creditors Have To Agree To A Debt Payment Programme?
No. Since 4 November 2019 a programme for an individual must be approved where not less than nine tenths in value of the creditors have consented, and on a programme covering more than one debt a creditor who does not reply within 21 days is deemed to consent.
This is the fear that stops people applying. One difficult creditor, one refusal, and the whole thing collapses.
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Free, confidential and no obligation.It does not work that way. The decision belongs to the DAS Administrator rather than to your creditors, and how the Debt Arrangement Scheme works sets out the rest of the scheme.
Two things follow from that, and both are missed by most pages on this subject. The threshold is measured by value rather than by number, and falling short of it does not end the application.
How is creditor consent measured in a debt payment programme?
Not all of them. 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.
By value, not by head count
The test is nine tenths by value, not by number. A single creditor holding more than a tenth of the total can withhold consent and put the application to the fair and reasonable test.
Five small creditors refusing may add up to nothing. One large one refusing changes the route the application takes, which what happens if a creditor objects deals with in detail.
Where the rule comes from
Regulations 23(1) and 24(1) were both substituted by the 2019 amendment regulations, in force 4 November 2019.
The unamended 2011 text still says every creditor must consent, and that text is what legislation websites display. It is out of date for individuals.
Nine tenths is not the whole test
Reaching nine tenths does not end the matter. Regulation 24(1) is subject to regulation 24(1A), in force since 1 April 2015, so a programme for an individual may only be approved in accordance with the Common Financial Tool.
AiB describes the effect plainly: at that threshold the programme must be approved, subject to the Common Financial Tool condition, regardless of the amount of the debt or the length of the proposed programme.
What happens if a creditor does not reply?
Silence counts as consent. Regulation 23(5) deems a creditor who does not respond within 21 days of the request to have consented, irrespective of any assignation of the debt.
The 21 days is the objection window
National Debtline puts it in one line: a creditor who does not respond within 21 days is treated as if they have agreed to your payment proposal and is bound by it.
The 21 days runs from the date of the request. Silence is the commonest outcome and it works in your favour.
The exception on a single-debt programme
That rule applies only to a programme providing for the payment of more than one debt. A programme covering a single debt gets no deemed consent.
So a sole creditor who never replies has not consented, and the application goes to the fair and reasonable test. Whether there is a minimum debt for the scheme covers what else changes with a single debt.
What is happening to your debts meanwhile
Interest, fees, penalties and other charges are frozen from the date the application is recorded, and it is not competent to serve a charge for payment or to commence or execute diligence while it is pending. Whether a Debt Arrangement Scheme freezes interest and charges covers the freeze.
Worried a creditor will refuse? Get free advice
Free, confidential and no obligation.What happens when creditors owed more than a tenth object?
An objection does not end the application. Where approval cannot be given under regulation 24, regulation 25(1) requires the DAS Administrator to approve a programme that is fair and reasonable.
The test that takes over
Regulation 25(2) lists the matters the DAS Administrator must have regard to, and regulation 25(3) makes that list non-exhaustive, so any other relevant factor may be weighed.
The matters include the total amount of debt, the period the programme will run, the Common Financial Tool assessment, and any comment made by the money adviser. The fair and reasonable test sets out all twelve.
Where consent sits in that list
The extent to which creditors have consented is one factor among them, at regulation 25(2)(h). It does not decide the question on its own.
Regulation 25(1) is written as a duty rather than a discretion. Where approval cannot be given under regulation 24, the DAS Administrator must approve a programme that is fair and reasonable.
The consent levels in one table
| What happens | The consequence | Where it comes from |
|---|---|---|
| Nine tenths or more in value consent, actively or by silence | The DAS Administrator must approve the programme, subject to the Common Financial Tool | Regulations 24(1) and 24(1A), the latter in force since 1 April 2015 |
| Creditors owed more than a tenth in value do not consent | The application moves to the fair and reasonable test. It does not fail | Regulation 25(1) |
| A creditor says nothing for 21 days, on a programme covering more than one debt | That creditor is deemed to consent, irrespective of any assignation of the debt | Regulation 23(5) |
| A creditor says nothing, on a programme covering a single debt | There is no deemed consent, so the fair and reasonable test applies | Regulation 23(5), read with AiB's guidance |
| A creditor you did not know about is missed | Approval is not invalid by reason only of that lack of consent, if you did not know and could not reasonably have known who they were | Regulation 23(6) |
Can one creditor block a programme on its own?
It can stop automatic approval if it is owed more than a tenth of the total by value. It cannot block the programme, because the fair and reasonable test still applies.
The creditor that most often has that weight
A council owed several years of council tax, or a lender holding the largest single balance, is the usual candidate. Whether council tax arrears can go into a Debt Arrangement Scheme covers that case.
A creditor does not have to give a reason
There is no statutory list of grounds. Nothing in regulations 23, 24 or 25 restricts why a creditor may withhold consent, and nothing requires one to give a reason.
So a page listing valid grounds of objection is describing something that does not exist. What happens if a creditor objects sets out what actually follows.
What a creditor cannot do
Regulation 33(1)(c) prohibits a creditor from attempting to persuade you to withdraw from the programme, or to make additional payments towards a debt included in it.
Approval also recalls any arrestment of your income or property. Whether a Debt Arrangement Scheme stops a wage arrestment covers the timing of that.
Which programmes still need every creditor to agree?
Business DAS, and any programme applied for before 4 November 2019. The nine tenths rule is for individuals and it is not retrospective.
The four cases
| Who is applying | Whose consent is needed | Where it comes from |
|---|---|---|
| An individual, applying on or after 4 November 2019 | Not less than nine tenths in value of the creditors | Regulations 23(1)(a) and 24(1), as substituted |
| An individual, applying before 4 November 2019 | Every creditor | The old rule, preserved by regulation 13(1) of the 2019 instrument |
| A joint programme | The consent of the creditors of both debtors is relevant, at the same threshold | Regulation 23(2) |
| A legal person, trust or unincorporated body | Every creditor | Regulations 23(1)(b) and 24(1ZA) |
| A programme covering a single debt | That creditor's active consent. Silence is not consent here | Regulation 23(5) applies only where more than one debt is covered |
Business DAS
Business DAS kept the old rule. Regulation 24(1ZA) still requires every creditor of a legal person, trust or unincorporated body to consent.
Regulation 23(1)(b) says the same thing from the other end. What Business DAS is covers that separate route and who can use it.
Older programmes
Programmes applied for before 4 November 2019 are not affected. Those keep the unanimous consent rule and the old eight per cent distributor fee.
So if your programme has been running since before November 2019, the rules that applied to your application are the older ones. That matters when you read about the fee as well.
What do creditors receive to help them decide?
A request for consent, sent by the DAS Administrator or by your continuing money adviser, on the form provided for that purpose.
How the request goes out
Regulation 23(3) requires the request to be sent by the DAS Administrator or the continuing money adviser. AiB’s guidance for creditors describes it reaching them through eDEN or by post.
Regulation 23(4) requires the form provided by the DAS Administrator to be used. The posting requirement that used to sit in regulation 23(3) was repealed on 2 July 2013.
What a creditor is agreeing to
Payment in full over the programme’s life, out of one monthly figure split pro rata, with fees deducted before they are paid. Whether DAS fees are taken from your payment or added to your debt explains the deduction.
AiB 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, and what a Debt Arrangement Scheme costs sets out where the rest goes.
What if a creditor is missed, or the debt is sold on?
Neither is fatal. Approval is not invalid by reason only of a missing consent where you did not know and could not reasonably have known who the creditor was.
Assignation
Deemed consent operates irrespective of any assignation of the debt, since 2 July 2013. Regulation 23(8) requires a creditor who assigns the rights to notify the DAS Administrator immediately, with the assignee’s details.
So a debt sold to a collection company during the 21 days does not restart the clock. The record of consents is kept by the DAS Administrator.
Missed creditors
Regulation 23(6) is a safety net rather than a strategy. Debts have to be verified before the application is submitted, and how to apply for a Debt Payment Programme sets out what the adviser checks.
What can you do if the decision goes against you?
You ask the DAS Administrator to review the decision first. Only once that review is decided does an appeal lie to the sheriff, under regulation 47C.
The two stages
| Step | What happens | Where it comes from |
|---|---|---|
| Ask the DAS Administrator for a review | In writing, within 14 days of intimation of the determination | Regulation 47 |
| The review is carried out | Within 28 days of the application, on the information provided and any written representations | Regulation 47A |
| The decision | The Administrator may confirm, amend or alter, or revoke and substitute a new determination | Regulation 47B |
| Appeal to the sheriff | On a point of law only, by summary application, within 14 days of intimation of the review decision | Regulation 47C |
| The end of the road | The decision of the sheriff is final | Regulation 47C(3) |
| Meanwhile | Protection from diligence continues for 14 days after a notice of rejection is entered, and for 28 days after a review application is entered | Regulation 30(2A)(b) and (c) |
Who else can ask for a review
A creditor named in the application may apply for a review of a determination to dispense with its consent or to approve a programme. The route runs both ways.
Everyone involved is intimated the outcome, including the payments distributor and any employer operating a payment instruction. Whether you qualify for the Debt Arrangement Scheme covers the entry test if you are starting again.
Get advice before you concede anything
Free help is available from Citizens Advice Scotland and National Debtline, and our Debt Arrangement Scheme page explains how we help.
Frequently asked questions
Do all creditors have to agree to a Debt Arrangement Scheme?
No. For an individual applying on or after 4 November 2019, the DAS Administrator must approve a programme where not less than nine tenths in value of the creditors have consented.
Is the nine tenths measured by number of creditors or by value?
By value. A single creditor holding more than a tenth of the total debt can withhold consent and send the application to the fair and reasonable test.
What happens if a creditor ignores the request?
A creditor who does not respond within 21 days of the request is deemed to consent, provided the programme provides for the payment of more than one debt.
Can a creditor refuse a Debt Payment Programme?
It can withhold consent, and it does not have to give a reason. That is not a veto, because where approval cannot be given the Administrator must approve a programme that is fair and reasonable.
Is a programme automatically approved at nine tenths?
Regulation 24(1) is subject to regulation 24(1A), in force since 1 April 2015, so a programme for an individual may only be approved in accordance with the Common Financial Tool.
Do all creditors have to agree to a Business DAS?
Yes. Regulations 23(1)(b) and 24(1ZA) require each creditor of a legal person, trust or unincorporated body to consent.
What if your programme started before November 2019?
The older rules apply to it. A programme applied for before 4 November 2019 keeps the unanimous consent rule and the earlier distributor fee.
Can you appeal a refusal to the sheriff?
Only after a review. You apply to the DAS Administrator for a review within 14 days, and an appeal then lies to the sheriff on a point of law under regulation 47C, whose decision is final.
Related guides
- What Happens If A Creditor Objects To Your Debt Payment Programme? What an objection does to an application, whether a reason is needed, the protection that carries on, and your options if it is refused.
- What Is The Fair And Reasonable Test For A Debt Payment Programme? When regulation 25(1) applies, what the DAS Administrator weighs up, the conditions it can attach, and how to challenge a refusal.
- How Do You Apply For A Debt Payment Programme In Scotland? Who makes the application, what you need ready, the protection available while it is prepared, and what to do if it is rejected.
- Do You Qualify For The Debt Arrangement Scheme In Scotland? The three statutory conditions, what habitually resident means, how your surplus income is worked out, and what can stop you applying.
- Does A Debt Arrangement Scheme Freeze Interest And Charges? When the freeze starts, what it covers, and what happens to the frozen charges when a programme completes or is revoked.
- How Much Does A Debt Arrangement Scheme Cost? Why a debt payment programme costs you nothing in fees, who pays for the scheme instead, and how your monthly payment is worked out.
- Are DAS Fees Taken From Your Payment Or Added To Your Debt? How the 20 per cent and 2 per cent fees are taken from money on its way to creditors, and what that means for your balance.
- Can You Do A Joint Debt Arrangement Scheme With Your Partner? Who can apply jointly, whether you have to owe the same debts, how creditor consent works, and what happens if you separate.
- What Is Business DAS And Which Businesses Can Use It? Who qualifies, why a sole trader uses the ordinary scheme, what a declaration of viability is, and what an approved programme protects you from.
- How Does The Debt Arrangement Scheme Work In Scotland? One monthly payment, interest and charges frozen, creditors blocked from diligence, and an arrestment already running recalled on approval.
Written as general information about Scottish debt law rather than regulated financial or legal advice, and your own circumstances may change the answer. Free, impartial help is available from Citizens Advice Scotland, StepChange, National Debtline and Advice Direct Scotland.