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- What is the difference in one table?
- Who has to agree before the arrangement starts?
- What happens to interest and charges under each?
- Which debts can go into each arrangement?
- What does each one cost, and who pays for it?
- Who sets each one up, and how is the payment worked out?
- Is either arrangement on a public record?
- Related guides
- Frequently asked questions
One is a private arrangement your creditors can refuse. The other is a Scottish statutory scheme that binds them once a Debt Payment Programme is approved.
Under the Debt Arrangement Scheme the freeze on interest is automatic and statutory from the day you apply. On a debt management plan there is no freeze at all unless the creditor agrees.
Part of your pay is protected by law
The deduction is set by statutory tables, not the creditor
An arrestment can be stopped or replaced
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StepChange says many creditors do agree. None of them has to.
The second difference is enforcement. Approval of a programme recalls an arrestment of your wages, and a debt management plan does nothing to one.
What is the difference in one table?
One is a contract and the other is a statutory scheme. The Financial Conduct Authority’s own definition calls a debt management plan a non-statutory agreement.
Side by side
| The point | Debt management plan | Debt Payment Programme under DAS |
|---|---|---|
| Legal character | An informal arrangement, and not a statutory scheme | Statutory, under the Debt Arrangement and Attachment (Scotland) Act 2002 |
| Where it is available | Across the United Kingdom | Scotland only |
| Must creditors take part? | No. Each one decides for itself | Yes, once the programme is approved |
| Interest and charges | Nothing is frozen unless the creditor agrees | Frozen from the date of application, and they cease to be owed if the programme completes |
| Effect on diligence | None at all | Approval recalls any arrestment of your income or property |
| Who applies | Any authorised firm, or you can negotiate direct | An approved money adviser must apply for you |
| Cost to you | Nothing with a charity provider. A commercial firm may charge | Nothing. The fees come out of what creditors receive |
| Public record | None | The DAS Register, which is free to search and open to anyone |
| Ending it early | You can stop at any time | Revocation is a formal process with consequences |
The scheme itself comes from the Debt Arrangement and Attachment (Scotland) Act 2002, and our Debt Arrangement Scheme page sets out how a programme runs.
The two differences that decide it
The first is interest, and it is the reason the advice sector in Scotland leans one way. The second is what happens if a creditor moves to enforcement.
Approval of a programme recalls an arrestment of your income under regulation 33(1)(a), and whether a Debt Arrangement Scheme stops a wage arrestment sets out how that works.
Both look the same from the outside
One affordable monthly payment goes out and is shared between your creditors until the debts are cleared. Neither writes any of the balance off.
What differs is what happens underneath. What a debt management plan is covers the informal side in detail.
Who has to agree before the arrangement starts?
Every creditor, on a plan. On the statutory route it is nine tenths in value under regulation 24(1).
The Scottish threshold
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.
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.
The nine tenths test was substituted by SSI 2019/315 with effect from 4 November 2019, and a creditor that does not answer within 21 days is deemed to have consented where the programme covers more than one debt.
An objection is not a veto
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.
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.
There is no equivalent on a plan
No creditor has to accept a debt management plan, and nothing requires one to give a reason for refusing.
Whether creditors have to accept a plan sets out what happens when one refuses, and National Debtline’s Scottish guidance says a debt management company cannot force creditors to accept offers.
What happens to interest and charges under each?
The scheme freezes them by force of law. A plan freezes nothing unless each creditor agrees to it separately.
The statutory freeze
Interest, fees, penalties and other charges stop under the Debt Arrangement Scheme (Interest, Fees, Penalties and Other Charges) (Scotland) Regulations 2011, running from the date the application is made.
They cease to be owed if the programme completes. If it is revoked they become payable again, which is the risk attached to a programme that does not finish.
What the rules give you on a plan instead
No creditor has to freeze interest because you are on a debt management plan. No statute requires it and no Financial Conduct Authority rule requires it.
CONC 7.3.4 is a rule and it requires forbearance and due consideration. Suspending, reducing, waiving or cancelling interest is the first example in CONC 7.3.5, which is guidance rather than a duty.
Whether a plan freezes interest goes through the provisions one by one.
And those rules stop at the Scottish priority debts
Those rules bind only firms the Financial Conduct Authority regulates. They do not reach your council for council tax, HMRC, or the Child Maintenance Service.
A programme reaches council tax where a plan usually cannot, which council tax arrears in a plan explains.
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Which debts can go into each arrangement?
A plan is built for ordinary credit debts. A programme can take in arrears of council tax, rent and mortgage payments as well.
Debt by debt
| The debt | Debt management plan | Debt Payment Programme |
|---|---|---|
| Credit cards, store cards, loans and overdrafts | Yes | Yes |
| Catalogue accounts and payday loans | Yes | Yes |
| Council tax arrears | Usually left outside a plan | Arrears can be included |
| Rent and mortgage arrears | Practice varies between providers | Arrears can be included, and it is optional |
| Ongoing rent, mortgage, council tax and utility bills | Never. They are paid as normal | Never. Only arrears go in |
| Student loans | Ask the provider, because no rule says either way | Excluded from the definition of debt since 27 June 2015 |
Student loans were taken out of the definition of debt for the scheme by the 2015 amendment regulations, so they cannot be included in a programme and are not protected by one.
Why priority debts are different in Scotland
Priority is about what the creditor can do to you, not about the size of the bill. A council obtains a summary warrant rather than raising an ordinary court action.
Sheriff officers can then move to an earnings arrestment, and our council tax debt advice page sets out the sequence.
What does each one cost, and who pays for it?
A programme costs you nothing, because the fees come out of what creditors receive. A plan costs nothing with a charity provider and can cost a share of every payment with a commercial one.
Who pays what
| Who is running it | What it costs you | How it is funded |
|---|---|---|
| A charity plan provider | Nothing to you | Funded by creditor contributions or by donations |
| A commercial plan provider | A fee out of your monthly payment | No cap exists, and the fee must not undermine your repayments from the first month |
| A Debt Payment Programme | Nothing to you | The payments distributor may make no charge of any kind to a debtor |
| The money adviser | Nothing to you | A money adviser may not charge an individual for Debt Arrangement Scheme work |
On the statutory side the distributor fee is set by regulation 17, and how much a Debt Arrangement Scheme costs works through the figures.
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.
On a plan there is no cap
A commercial provider may charge, and there is no cap on what it may charge.
CONC 8.7.2 is a rule, and it says a firm’s fees must not undermine your ability to make significant repayments to lenders, starting with the first month of the plan.
Guidance adds that allocating more than half of your monthly payment to the firm is likely to break that rule, which is not the same as permission to take half. Whether plans are free or charge fees goes through it.
Who sets each one up, and how is the payment worked out?
A plan can be arranged by any authorised firm. A programme cannot, because regulation 20(2)(a) requires an approved money adviser to apply for you.
The budget tool is not the same
For the statutory routes the tool is prescribed. Regulation 15(1) of the Bankruptcy (Scotland) Regulations 2016 names the Common Financial Statement as the common financial tool.
The Debt Arrangement Scheme provision is a different one. Regulation 24(1A) says a programme may only be approved in accordance with the common financial tool.
Most sources name the Standard Financial Statement, which is the tool used elsewhere in the United Kingdom. Regulations that would have moved Scotland to it were drafted in 2018 and never made.
Nothing prescribes which budget tool a plan provider uses, and which budget information you need sets out the figures you will be asked for either way.
Authorisation on the plan side
A firm running plans as a business needs permission for debt counselling and debt adjusting. How to check a firm is authorised explains what to look for on the register.
CONC 8.3.2 is a rule requiring the advice you are given to be suitable, and CONC 8.2.2, which is guidance, tells firms to give appropriate advice to customers in the different countries of the United Kingdom.
Is either arrangement on a public record?
A programme is. A debt management plan appears on no register anywhere.
The DAS Register
The DAS Register is free to search and open to anyone, and it is kept by the Accountant in Bankruptcy.
The Accountant in Bankruptcy says an entry is removed 14 days after a programme is revoked.
No statutory period governs how long an entry stays after a programme completes. The Accountant in Bankruptcy says details are removed on completion without giving a timescale.
Credit files are a separate question
StepChange says nowhere in your credit report shows you are on a debt management plan, and that each account in the plan can show payments are being made through one.
No credit reference agency publishes a retention rule for a Debt Arrangement Scheme. Experian, Equifax and TransUnion all publish what they hold and for how long, and none of them lists a Debt Arrangement Scheme at all.
Whether a plan affects your credit score and whether a programme shows on your credit file deal with each side.
What is not published for either
No figure is published for how many people in Scotland are on a debt management plan. The Accountant in Bankruptcy leaves informal arrangements out of its statistics altogether.
Numbers for approved programmes are published every year. That difference in visibility is itself one of the differences between a statutory scheme and a private arrangement.
Which route the advice sector prefers
National Debtline’s Scottish guide says a Debt Payment Programme is usually a much better option than a free debt management plan in Scotland.
Whether that holds for you depends on your income and on who you owe. Moving from a plan to the Debt Arrangement Scheme sets out what switching involves, and our debt solutions page compares the wider options.
Frequently asked questions
Is a Debt Payment Programme the same as a debt management plan?
No. A programme is statutory under the Debt Arrangement and Attachment (Scotland) Act 2002 and binds creditors once approved, while a plan is an informal arrangement that binds nobody.
Which one stops a wage arrestment?
Approval of a Debt Payment Programme recalls any arrestment of your income or property under regulation 33(1)(a). A debt management plan has no effect on diligence at all.
Do all my creditors have to agree to a Debt Payment Programme?
Not since 4 November 2019. A programme for an individual is approved where creditors holding not less than nine tenths in value consent, and an objection sends it to the fair and reasonable test.
Does interest stop on both?
Only on the statutory route automatically. Interest, fees, penalties and charges are frozen from the date of application on a programme, and a plan freezes nothing unless each creditor agrees.
Can I include council tax arrears in either?
Council tax arrears can go into a Debt Payment Programme. They usually sit outside a debt management plan, which is built around ordinary credit debts.
Do I need a money adviser for both?
Only for the Debt Arrangement Scheme, where regulation 20(2)(a) requires the adviser to apply for you. A plan can be arranged by any authorised firm or negotiated yourself.
Will everyone be able to see I am on a Debt Payment Programme?
The DAS Register is free to search and open to anyone. A debt management plan appears on no register, though the accounts inside it are still reported by your creditors.
Can I move from a plan to the Debt Arrangement Scheme?
Yes, and an approved money adviser makes the application for you. Your budget is reassessed with the common financial tool, and the interest freeze runs from the date of application.
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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.