Do You Have To Live In Scotland To Use The Debt Arrangement Scheme?
Yes. Regulation 20(1) of the Debt Arrangement Scheme (Scotland) Regulations 2011 says that a debtor who is habitually resident in Scotland may apply, and that is the one condition in the entry test with no flexibility in it.
There is no minimum debt, no maximum debt and one creditor is enough. The geography is the hard part.
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Living in Scotland and weighing up a DAS? Get free advice on whether you qualify.
Free, confidential and no obligation.The question comes up in two ways. Someone who has recently moved to Scotland wants to know whether they qualify yet, and someone already in a programme is thinking about a move south, which the eligibility rules do not address on their face.
Nationality plays no part in it. Habitual residence is about where your life is based from day to day.
What does habitually resident in Scotland mean?
It means Scotland is where you are actually based. AiB describes it as having your main residence in Scotland, being registered to vote there, and normally having your bank account there and paying your bills there.
The regulations do not define it
Regulation 20(1) uses the phrase and leaves it there, so advisers work from AiB’s client eligibility guidance.
No single document settles it. Your adviser looks at the overall picture of where your home, your finances and your registrations sit.
Why there is a residence test at all
The scheme is a creature of the Debt Arrangement and Attachment (Scotland) Act 2002, administered by the DAS Administrator, and what an approved programme stops is Scottish diligence.
A statute of the Scottish Parliament reaches debtors in Scotland. That is the whole of the reason, and it is why no equivalent exists over the border.
There is no qualifying period
Nothing in regulation 20(1) asks how long you have lived in Scotland. That is worth saying clearly, because the test for Scottish bankruptcy does contain a look-back and the two get mixed up.
How do you show where you are habitually resident?
Through the ordinary evidence of where your life is: your address, your registrations and your everyday finances. No single document settles it on its own.
What the guidance points at
| What is looked at | What AiB's guidance says, or what the regulation does not say |
|---|---|
| Your main residence | The Accountant in Bankruptcy's guidance puts this first: your main residence should be in Scotland |
| The electoral register | You are registered to vote in Scotland |
| Your bank account | You normally hold your account in Scotland |
| Your bills | You normally pay your bills in Scotland |
| Nationality | Irrelevant. The test is about where your life is based, not where you were born or which passport you hold |
| How long you have been there | No qualifying period appears in regulation 20(1) |
If you have only just moved to Scotland
There is no waiting period to serve. What an adviser is looking for is whether Scotland is now where you are based, on the ordinary evidence.
A recent move means the picture is thinner, not that the door is shut. Get the electoral registration and the address changes done, and take what you have to the first appointment, which how to apply for a Debt Payment Programme sets out.
Where the answer is recorded
Your home address goes on the DAS Register, along with your full name including any former name and your date of birth, under regulation 19(3). What the DAS Register is and who can search it covers that.
Since 29 October 2018 information may be left off the register where the DAS Administrator considers that including it would be likely to put someone at risk of violence or otherwise jeopardise their safety or welfare.
What happens if you move away while your programme is running?
Regulation 20(1) is a condition of applying. Leaving Scotland is not one of the grounds for revocation in regulation 42(1), which is a closed list.
What the grounds actually are
They are failing a condition without reasonable cause, making a statement you know to be untrue, falling far enough behind, and, on a joint programme, the relationship conditions ceasing to apply. Why a Debt Arrangement Scheme is revoked sets them out in full.
None of them is about where you live. What does apply to you is the duty to keep your adviser informed.
The duties that do bite when you move
| What changes | What you have to do | Where it comes from |
|---|---|---|
| You change address | Notify your continuing money adviser or the DAS Administrator within 7 days | Regulation 27(2)(f)(i) |
| Your circumstances change materially | Notify them within 7 days of becoming aware of the change | Regulation 27(2)(f)(ii) |
| Your income changes | A material change in your financial circumstances is a ground for varying the programme | Regulation 37(1)(d) |
| They ask for evidence | Provide information on your income, assets or liabilities within 10 days of a written request | Regulation 27(2)(g) |
| You stop paying | A sum equal to the payments due in a two-month period going unpaid is a ground for revocation | Regulation 42(1)(c) |
A move usually changes your income or your outgoings as well, and that is a ground for varying the programme. How to vary a Debt Payment Programme when your income changes covers the route.
The protection you have is Scottish too
The pre-application protection people rely on is the statutory moratorium under sections 195 to 198 of the Bankruptcy (Scotland) Act 2016, which is six months and available once in any twelve.
It is not the same thing as the Breathing Space debt scheme and the periods are different. Anything you read quoting sixty days is written for England and Wales.
Ask before you go, not after
No published source sets out what a move out of Scotland does to a programme already approved. Raise it with your continuing money adviser before you commit to it.
Not sure where you stand? Get free, confidential advice
Free, confidential and no obligation.Does it matter where your creditors are based?
The residence condition is about you. Regulations 20 and 21 set no condition about where a creditor is based.
What the entry test does look at
It looks at where the debtor is habitually resident, at how many debts the programme covers, and at the bars in regulation 21(2). Which debts can and cannot go into a programme deals with the debts themselves.
A lender with a head office in England is still a creditor for these purposes. If you are unsure about a particular debt, put it to your money adviser before the application is submitted.
Why that matters in practice
Most people in a Scottish programme owe money to UK-wide lenders. Regulation 20(2A) requires the programme to cover every debt you owe at the date of the application that a programme can cover, so they go in with everything else, and how to apply sets out how they are verified.
How does residence work for a couple, and for a business?
Each person in a joint programme has to meet the individual criteria in their own right. A business has a different test altogether.
A joint programme
AiB’s eligibility guidance says both parties must independently meet the individual eligibility requirements, so both have to be habitually resident in Scotland.
Two people can apply together. Since 2 July 2013 the test is that each debtor is liable for a debt the programme would pay, rather than that both are liable for the same debt.
Both of you also have to consent to the application, under regulation 22(2), and whether you can do a joint programme with your partner covers the rest of the test.
Business DAS uses a place-of-business test
For a legal person, trust or unincorporated body, regulation 20(4A) reads habitual residence as having an established place of business in Scotland, or being constituted or formed under Scots law and at any time carrying on business in Scotland.
Business DAS is for a legal person, trust or unincorporated body. A sole trader uses the ordinary scheme.
So a self-employed person applies on the ordinary residence test, and what Business DAS is explains who the business route is for.
Is the DAS residence test the same as the one for Scottish bankruptcy?
No, and they should not be read across. Sequestration, including the Minimal Asset Process, uses a wider test with a one-year look-back that the Debt Arrangement Scheme does not have.
The three tests side by side
| Route | The test | Where it comes from |
|---|---|---|
| Debt Arrangement Scheme, individual | Habitually resident in Scotland | Regulation 20(1). No look-back period and no business limb |
| Business DAS | An established place of business in Scotland, or constituted or formed under Scots law and at any time carrying on business in Scotland | Regulation 20(4A), in force 11 December 2014 |
| Sequestration, including Minimal Asset Process | Habitual residence in Scotland or an established place of business here, at any time in the year immediately before the application | Section 15 of the Bankruptcy (Scotland) Act 2016 |
The test is habitual residence in Scotland or an established place of business here, at any time in the year immediately before the application. Whether you are eligible for Minimal Asset Process bankruptcy deals with that route on its own terms.
Why the difference matters
Someone who left Scotland eight months ago may still be within the bankruptcy test and outside the Debt Arrangement Scheme one. That is a real difference rather than a drafting accident.
The two tests sit in different statutes and were written at different times. Nothing in the Debt Arrangement Scheme regulations picks up the section 15 wording.
So do not take a residence answer from a bankruptcy page and apply it here. Whether you qualify for the Debt Arrangement Scheme sets out the rest of the entry test.
What are your options if you live in England, Wales or Northern Ireland?
The Debt Arrangement Scheme is Scottish and is not available elsewhere in the United Kingdom. The routes on offer where you live are different products with different rules.
Do not read across in either direction
A Debt Management Plan in England and Wales is informal and not binding on creditors. A Debt Payment Programme is statutory, freezes interest and charges, and binds the creditors it covers.
The difference is not a matter of degree. One is an arrangement a creditor can walk away from, and the other is a statutory scheme with a public register behind it.
The reverse trap catches Scottish readers too. The Breathing Space debt scheme is England and Wales only, and Scotland’s equivalent is the statutory moratorium, which how a statutory moratorium protects you explains.
Breathing Space in Scotland is the name of a mental health helpline, which is a different service entirely. The debt scheme and the helpline share nothing but a name.
What a Scottish programme would still be doing
An approved programme freezes interest, fees, penalties and other charges on the debts it covers, and it recalls any arrestment of your income or property. Neither of those depends on your creditors being Scottish.
Where to get advice
Free help is available wherever you are. National Debtline and Citizens Advice Scotland both publish their own guides to the Scottish scheme.
If you are in Scotland, mygov.scot sets out how to apply, and our Debt Arrangement Scheme page explains how we help.
Frequently asked questions
Do you have to live in Scotland to apply for a Debt Payment Programme?
Yes. Regulation 20(1) allows an application by a debtor who is habitually resident in Scotland, and there is no equivalent scheme elsewhere in the United Kingdom.
What does habitually resident in Scotland mean?
AiB describes it as having your main residence in Scotland, being registered to vote there, and normally having your bank account there and paying your bills there.
How long do you have to live in Scotland before you can apply?
Regulation 20(1) sets no qualifying period. The one-year look-back that people remember belongs to the test for Scottish bankruptcy, not to the Debt Arrangement Scheme.
Can you move to England during a Debt Payment Programme?
Leaving Scotland is not one of the grounds for revocation in regulation 42(1). No published source sets out the wider effect, so raise it with your continuing money adviser first.
Do you have to tell anyone if you change address?
Yes. Regulation 27(2)(f) requires you to notify your continuing money adviser or the DAS Administrator of a change of address, and of a material change of circumstances, within 7 days.
Can you include a debt owed to a lender based in England?
The residence condition applies to you, not to your creditors, and regulations 20 and 21 set no condition about where a creditor is based.
Does your nationality affect whether you qualify for DAS?
No. The test is habitual residence, which is about where your life is based rather than where you were born or which passport you hold.
How does residence work for a business applying for Business DAS?
Regulation 20(4A) reads the test as having an established place of business in Scotland, or being constituted under Scots law and at any time carrying on business in Scotland.
Related guides
- 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.
- 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.
- 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.
- Are You Eligible For Minimal Asset Process Bankruptcy? The eight conditions in section 2(2), how the income and benefits routes differ, and how your assets are measured against the limits.
- What Is The DAS Register And Can Anyone Search It? What the public register holds about you, which events are recorded, how long an entry stays, and why it is not the same as your credit file.
- Why Would A Debt Arrangement Scheme Be Revoked? The automatic grounds, the ones the DAS Administrator decides, how many missed payments it takes, and what happens to the frozen interest.
- How Do You Vary A Debt Payment Programme When Your Income Changes? The material change ground, the 21 days creditors get to comment, and what a creditor's silence counts as on a multi-debt programme.
- Is There A Minimum Debt For The Debt Arrangement Scheme? Why no threshold exists in the regulations, what changes when you apply with one debt, and what decides whether a small programme is approved.
- 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.