Two details carry most of the confusion on this subject. It starts at application rather than approval, and it holds only while the programme does.

Here is when the freeze bites, what it reaches, what happens at the end, and what happens if a programme is revoked before it finishes. Our guide to how the Debt Arrangement Scheme works covers the scheme itself.

On the date the application is recorded on the DAS Register, not the date it is approved. The Accountant in Bankruptcy tells creditors to freeze all interest, fees and charges on the debts in a programme from that date.

The two names for the same date

Recording is the event regulations 19(2)(b) and 30(1)(ba) both turn on, so it is the precise way to put it. AiB’s creditor guidance calls the same date the date of submission.

Why the start date matters

Approval is not instant. A creditor has 21 days to answer the consent request, and where consent falls short the application goes to the fair and reasonable test.

Dating the freeze to the application means a slow decision costs you nothing. The balance you eventually repay is the one you had when your adviser pressed send.

The gap before the application goes in

Nothing is frozen while your adviser is still preparing the paperwork. That is one reason advisers usually run a statutory moratorium alongside the work.

A statutory moratorium lasts six months. The period was six weeks until section 23(2) of the Coronavirus (Recovery and Reform) (Scotland) Act 2022 substituted six months in section 198 of the Bankruptcy (Scotland) Act 2016, with effect from 1 October 2022.

A moratorium stops enforcement rather than interest, so the two do different jobs. How a statutory moratorium protects you sets out what it does and does not reach.

Interest, fees, penalties and other charges on the debts inside the programme. Anything outside it carries on under its own terms.

The provision

The freeze comes from the Debt Arrangement Scheme (Interest, Fees, Penalties and Other Charges) (Scotland) Regulations 2011, which is a separate instrument from the main DAS Regulations.

Regulation 3(1) of those main Regulations defines debt widely. It takes in judicial and contractual interest, default charges under a contract and enforcement expenses.

In and out

Student loans were taken out of the definition of debt by the 2015 amendment regulations, and the exclusion bites on applications made from 27 June 2015.

mygov.scot’s list of debts you can include is the source for the position on court fines, and which debts can and cannot go in goes through the rest.

They cease to be owed. Regulation 4(1) of the 2011 interest regulations says the frozen interest, fees, penalties and other charges cease to be owed or payable if and when the programme is completed.

What that leaves

A Debt Payment Programme is not an insolvency solution. You repay the debt in full, and what changes is the pressure rather than the balance.

The Accountant in Bankruptcy’s completion guidance for creditors puts it plainly: you cannot be held liable for further payments towards the debts in the programme, including interest or charges that would have accrued after the application date.

What completion looks like

• You have made all the payments, or a lump sum equal to the outstanding ones, or every creditor agrees in writing to finish early.
• The payments distributor sends written notice of completion to the DAS Administrator, any continuing money adviser, you and each creditor.
• Where a payment instruction was in place, your employer is told in writing that the programme is finished.
• Your details come off the DAS Register.

What you get is a notice of completion under regulation 46, sent by the payments distributor. There is no completion certificate.

What happens when a programme ends runs through that sequence, and paying a programme off early covers the lump sum route.

The freeze falls away. Regulation 4(1) makes those sums payable if and when the programme is revoked, so a creditor can charge what would have been payable had you never started.

The pause before that happens

The Accountant in Bankruptcy’s revocation guidance says creditors cannot take enforcement action until 14 days have elapsed from revocation, and can apply interest, fees and charges once those 14 days have passed.

Where a review is requested, creditors wait a further 28 days. That is time to talk to your adviser about a variation instead.

The grounds

The DAS Administrator must give written notice of a proposal to revoke, and cannot implement it until at least 4 weeks after that notice. Revocation on sequestration or a protected trust deed is the exception, because it is automatic.

One narrow rule preserves the freeze. Where a joint programme is revoked on eligibility grounds, regulation 4(4) keeps the frozen charges off if the debtor applies for an alternative programme within 21 days, and why a programme is revoked covers the rest.

No. A Debt Payment Programme repays the principal in full, and what stops is the growth on top of it.

The distinction that gets blurred

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.

Where a page advertises a percentage written off by a Debt Arrangement Scheme, it is describing a different solution. The scheme has no write-off mechanism except composition, which needs twelve years and seventy per cent first.

Whether a Debt Arrangement Scheme writes off any debt takes that apart, because the percentages advertised on this subject belong to a different product.

The one exception, and its conditions

Composition needs both twelve years from approval and seventy per cent of the debt paid, under regulation 46A(1). It is a long stop for very long programmes rather than something you can ask for.

Where an offer of composition is accepted, the frozen interest and charges cease to be owed just as on a completed programme. That is a long stop rather than a plan.

Creditors do. For an individual the fees total 22 per cent, and every penny of it comes out of the money on its way to creditors rather than being added to your debt.

The two fees

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 DAS Administrator’s fee is 2 per cent of any sum due to be paid to a creditor in a distribution. Regulation 5 says it may not be charged to the debtor.

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.

A payments distributor may make no charge of any kind to a debtor. You pay one figure and it is split between the creditors.

What creditors actually receive

The Accountant in Bankruptcy’s creditor guidance puts it at 78 per cent of the debt for applications made on or after 4 November 2019, when the 2019 amendment regulations raised the distributor fee to 20 per cent.

Creditors have to write off the sums paid as fees, so they cannot come back to you for the difference. Applications made before that date keep the older eight per cent fee.

How much a Debt Arrangement Scheme costs sets the figures out, and whether the fees are taken from your payment or added to your debt answers the question people actually ask.

A debt management plan freezes nothing by itself. Each creditor decides whether to hold interest, and can change its mind.

Side by side

In Scotland that difference has a hard edge, because a wage arrestment or a bank arrestment can carry on while an informal plan runs. Choosing between a Debt Arrangement Scheme and a debt management plan compares them properly.

What to weigh against the freeze

A programme is a public entry on the DAS Register and a commitment measured in years. AiB says a programme approved in the last three financial years is expected to last between 5.1 and 6.1 years.

So the payment has to be one you can hold, not one that looks good on paper. Our Debt Arrangement Scheme page sets out how we help, and whether rent or mortgage arrears can go in covers the housing side of it.