Draft Regulations laid before the Scottish Parliament under section 62(4) of the Debt Arrangement and Attachment (Scotland) Act 2002 for approval by resolution of the Scottish Parliament.
2013 No.
Debt
The Debt Arrangement Scheme (Scotland) Amendment Regulations 2013
Made    
Coming into force    

The Scottish Ministers make the following Regulations in exercise of the powers conferred by sections 2(3)(d), 4(5), 5(4), 7, 7A and 62(2) of the Debt Arrangement and Attachment (Scotland) Act 2002 and all other powers enabling them to do so.
2002 asp 17 (“the Act”). The Act was relevantly amended, and section 7A inserted, by the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), sections 173, 209(1), 211 and 212 and schedule 4, paragraph 10, schedule 5, paragraph 30 and schedule 1, Part 1. Section 9(1) contains a definition of “prescribed” relevant to the exercise of statutory powers under which these Regulations are made.
A draft of these Regulations has been laid before and approved by resolution of the Scottish Parliament in accordance with section 62(4) of that Act.
The powers to make these Regulations are exercised together by virtue of section 33(2) of the Interpretation and Legislative Reform (Scotland) Act 2010 (asp 10). The Regulations are subject to the affirmative procedure by virtue of section 33(3) of that Act.

1 Citation and commencement
1 These Regulations may be cited as the Debt Arrangement Scheme (Scotland) Amendment Regulations 2013.
2 They come into force on the day after the day on which the Regulations are made.

2 Interpretation
In these Regulations—
“DAS” means the Debt Arrangement Scheme; and
“the DAS Regulations” means the Debt Arrangement Scheme (Scotland) Regulations 2011.
S.S.I. 2011/141.

3 Amendment to the Debt Arrangement Scheme (Interest, Fees, Penalties and Other Charges) Regulations 2011
1 The Debt Arrangement Scheme (Interest, Fees, Penalties and Other Charges) (Scotland) Regulations 2011 are amended in accordance with paragraphs (2) to (5).
S.S.I. 2011/238.
2 In regulation 2 (interpretation), for the definition of “the DAS Regulations” substitute—

““the DAS Regulations” means the Debt Arrangement Scheme (Scotland) Regulations 2011;”

.
3 In regulation 4(1)(a) (moratorium on interest, fees, penalties or other charges), for “date on which a debt payment programme is approved” substitute “date on which a debtor applies for a debt payment programme (which is subsequently approved)”.
An application is made under regulation 20 of the DAS Regulations.
4 After regulation 4(1) insert—

“1A Paragraph (1) applies to a debt in respect of which an offer of composition is accepted, or deemed to be accepted, under regulation 46B(1) or (2) of the DAS Regulations as it applies to a completed programme.
Regulation 46B(1) and (2) is inserted by regulation 15 of these Regulations.”

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5 For regulation 5(1) (appeal to the sheriff on point of law), substitute—

“1 As regards any debt included in a debt payment programme the debtor for the debt payment programme or creditor may apply to the DAS Administrator for review of a determination of the DAS Administrator under regulation 4(3) in accordance with regulations 47(4) and (5), 47A and 47B of the DAS Regulations on any ground which may be raised in an appeal under paragraph (1A).
Regulations 47(4) and (5), 47A and 47B are inserted by regulation 17 of these Regulations.
1A A debtor or creditor may appeal to the sheriff on point of law against a decision of the DAS Administrator under regulation 47B of those Regulations as it applies to paragraph (1).”

,
and for the heading to regulation 5 substitute “Reviews and appeals”.

4 Amendment to the DAS Regulations
The DAS Regulations are amended in accordance with regulations 5 to 18 and 19(1) and (2).

5 Correction of accidental errors
After regulation 4, insert—

“4A Correction of accidental errors
1 The DAS Administrator may correct an accidental error in any determination, made by the DAS Administrator under these Regulations.
2 The DAS Administrator must notify the correction in writing to any person notified of the determination.
3 A correction has effect—
(a) as if the determination was made in corrected form on the date on which the original determination was made; and
(b) where a debt payment programme was revoked in error, to restore that programme as if it had not been revoked.
4 A correction under paragraph (1) may not be made—
(a) after 28 days from the date on which the error was made; or
(b) where an application for review has been made under regulation 47 and a decision has not been made by the DAS Administrator.”

.

6 Money adviser fees
1 In the definition of “continuing liability” in regulation 2(1) (interpretation: general)—
(a) after sub-paragraph (i) omit “and”; and
(b) after sub-paragraph (j) insert

“and;
(k) a fee charged to a debtor by a money adviser;”

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2 At the end of regulation 3(2)(b) (interpretation: debt), insert—

“;
(c) as a fee charged by a money adviser for the money adviser’s services in the debt payment programme in respect of which the services are provided”

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3 In regulation 12 (functions and duty of a money adviser), in paragraph (3)—
(i) after sub-paragraph (a) omit “and”; and
(ii) at the end of sub-paragraph (b) insert—

“; and
(c) provide, as required by the DAS Administrator, information about the amount charged as a fee to a debtor for the adviser’s services in a debt payment programme”

.

7 Approval of a money adviser
In regulation 9 (approval of a money adviser), for paragraph (3) substitute—

“3 An applicant is to be a fit and proper person if, but not only if—
(a) the person has undergone training on the matters specified in Schedule 3; or
(b) the person works for an organisation which is working towards accreditation at Type 2 level or above against the Scottish National Standards for Information and Advice Provision.”

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8 Payments distributors
1 In regulation 16(1) (functions and duty of a payments distributor)—
(a) after “payments distributor” where it first occurs, insert “on behalf of the debtor”;
(b) in sub-paragraph (a), for “DAS Administrator and any continuing money adviser” substitute “money adviser”; and
(c) in sub-paragraph (c), for “, any continuing money advisor, and to creditors”, substitute “and any continuing money advisor”.
2 In regulation 17(2) (charges by a payment distributor), after “fee” insert “, including any VAT incurred,”.

9 Information on the DAS Register
In regulation 19(2) (information on the DAS Register)—
(a) after sub-paragraph (h), insert—

“(ha) correction of an accidental error under regulation 4A;
(hb) variation of an approved programme under regulation 46D;
(hc) an application for review under regulation 47;”

; and
(b) in sub-paragraph (i), for “ 47” substitute “47C”.

10 Joint debt payment programme
In regulation 22(1) (joint debt payment programme)—
(a) for sub-paragraph (a) substitute—

“(a) if each of the debtors is liable for a debt which the programme would provide for the payment of; and”

; and
(b) in sub-paragraph (b), omit “and” where it appears before “they”.

11 Creditors
1 In regulation 23 (consent of creditors)—
(a) in paragraph (3), omit “, and if posted must be sent to the creditor by first class recorded delivery post”;
(b) at the end of paragraph (5), insert—

“, irrespective of any assignation of the debt by that creditor,”

; and
(c) after paragraph (7), insert—

“8 Where the rights to one or more debts included in the debt payment programme are assigned, the creditor must immediately notify the DAS Administrator in writing—
(a) that the creditor has assigned the rights; and
(b) of the details of the assignee.”

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2 After regulation 23 (consent of creditors), insert—

“23A Creditor’s authorised representative
Where a creditor authorises another person to act on behalf of the creditor in relation to the debt arrangement scheme—
(a) the authorised representative must, provide evidence of authority to act on behalf of the creditor to the DAS Administrator and any continuing money adviser; and
(b) the creditor must notify the DAS Administrator and any continuing money adviser where the representative is no longer authorised.”

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12 Standard conditions
In regulation 27 (standard conditions), in paragraph (2)(a), for “one month” substitute “42 days”.

13 Variation
1 After regulation 36, insert—

“36A Proposal for variation: discharge of liability on compensation
1 The DAS Administrator may propose a variation of a debt payment programme where a liability, or part of a liability, of the debtor is discharged by a creditor applying compensation between that debt, or part of that debt, and a liability owed by the creditor to the debtor.
2 The DAS Administrator may not do so unless it has made a reasonable attempt to agree a variation between the debtor and creditor.
3 The proposal must be intimated in writing to those mentioned in regulation 36(4)(a) to (d).”

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2 In regulation 37 (grounds for variation)—
(a) after paragraph (1)(e), insert—

“(ea) under regulation 36A where liability of a debtor is discharged by a creditor applying compensation;”

; and
(b) in paragraph (1)(h)—
(i) for “of 6 months” substitute “not exceeding 6 months”; and
(ii) for “an equal period” substitute “a period equal to the period of deferment”.
3 In regulation 39 (notification of approval or rejection of a variation) after paragraph (1)(c), insert “(ca) where there is a payment instruction under regulation 32, to the employer;”.

14 Revocation of debt payment programmes
1 After regulation 40(a) (revocation on sequestration in debtor application), insert—

“(aa) on an award of sequestration of the debtor’s estate where a creditor presented, or concurred in the presentation of, the petition for sequestration before approval of the programme;
A debt payment programme is approved from midnight on the day immediately before that on which the notice under regulation 26 of the DAS Regulations is entered in the DAS register (see regulation 26(2)).”

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2 After regulation 40, insert—

“40A Death of a debtor
1 A debt payment programme must be revoked by the DAS Administrator on intimation to the DAS Administrator of the death of the debtor.
2 In paragraph (1), “the debtor” in relation to a joint debt payment programme refers to either debtor.”

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3 In regulation 42(1)(c) (grounds for revocation), for “the aggregate of two such payments” substitute “the aggregate of payments due in a period of two months, beginning after the last payment is made”.
4 In regulation 44 (notification of revocation)—
(a) in paragraph (2)(a) omit “and”;
(b) in paragraph (2)(b) omit “to”; and
(c) at the end of paragraph (2)(b) insert—

“(c) the debtor; and
(d) the payments distributor.”

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5 After regulation 44, insert—

“44A Effect of revocation
1 The revocation of a debt payment programme is to have no effect for 14 days immediately following the date on which the programme is revoked; and
2 Where there is an application for review of a determination of the DAS Administrator to revoke a programme under regulation 47(3), the revocation of the programme is to have no effect for 28 days after the date on which the application is made.
Regulation 47(3) is substituted by regulation 17 of these Regulations.”

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15 Composition
After Part 9 insert—

“PART 9A COMPOSITION

46A Offer of composition
1 The DAS Administrator or a continuing money adviser may, with the consent of the debtor, make an offer of composition to each creditor taking part in the debt payment programme—
(a) after a period of 12 years beginning with the approval of the debt payment programme; and
(b) where 70% of the total amount of debt due under the programme when the programme was approved, has been paid.
2 An offer under paragraph (1) must be made in form 6.
Inserted by regulation 18 of these Regulations.
3 The period of 12 years in paragraph (1)(a) must not include any period of during which payments by the debtor were deferred under regulation 37(1)(h).

46B Acceptance of offer by creditors
1 Where a creditor accepts the offer of composition, in respect of a debt or debts due to that creditor and included in the debt payment programme, the liability of the debtor to repay that debt is discharged.
2 A creditor who is made an offer of composition under regulation 46A(1) and who does not respond to that offer within 21 days after the date of the offer is deemed to accept the offer.
3 The DAS Administrator must maintain a record of acceptances by creditors.

46C Notice of completion on composition
Where every creditor accepts (or is deemed to accept) the offer in respect of all of the debts in a debt payment programme the DAS Administrator must send notice in writing of completion of the programme—
(a) to the debtor;
(b) to any continuing money adviser;
(c) to the payments distributor; and
(d) to the employer where there is a payment instruction under regulation 32.

46D Variation on composition
1 Where regulation 46C does not apply, the debt payment programme must be varied by the DAS Administrator in accordance with the acceptances (and deemed acceptances) made under regulation 46B.
2 The DAS administrator must intimate in writing the effect of the variation—
(a) to the debtor;
(b) to any continuing money adviser;
(c) to the payments distributor;
(d) to all creditors continuing to take part in the programme; and
(e) to an employer if there is a payment instruction under regulation 32.”

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Reviews and appeals
16 1 In regulation 2(1) (interpretation: general) after the definition of “the 1986 Act”, insert—

““appeal” means an appeal under regulation 47C;”

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2 For regulation 12(1)(c) (functions of a money adviser: assistance and advice) substitute—

“(c) assist a debtor with, and advise on an application—
(i) for approval, variation or revocation of a debt payment programme; or
(ii) for review of a determination under regulation 47.”

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3 In regulation 30 (diligence or sequestration in the period before a debt payment programme is approved), for paragraph 2(b), substitute—

“(b) that occurring 14 days after the date on which notice of rejection of the debt payment programme, sent under regulation 29(1), is so entered;
(ba) where an application for review has been made under regulation 47(1), that occurring 28 days after the date on which the application is made; and”

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17 For Part 10, substitute—

“PART 10 REVIEWS

47 Application for review
1 A debtor or a money adviser acting on behalf of a debtor may, on any ground which may be raised in an appeal, apply for review of a determination of the DAS Administrator not to approve a debt payment programme.
2 A creditor named in an application for a debt payment programme may, on any ground which may be raised in an appeal, apply for review of a determination of the DAS Administrator to—
(a) dispense with the consent of the creditor;
(b) approve a programme.
3 A debtor or a money adviser acting on behalf of a debtor, a creditor participating in a debt payment programme or a creditor who has applied for variation of a programme on the grounds in regulation 37(1)(e) or (f) may, on any ground which may be raised in an appeal, apply for review of a determination of the DAS Administrator to—
(a) attach a condition under regulation 28;
(b) approve, or refuse to approve, a variation of a programme;
(c) revoke a programme;
(d) correct an accidental error in any determination and restore a debt payment programme under regulation 4A.
4 An application under this regulation must be made—
(a) within 14 days after the date of intimation of the determination to the debtor or creditor; and
(b) in writing.
5 Where an application has been made under this regulation, the DAS Administrator must intimate the application in writing to—
(a) the debtor;
(b) any creditor named in the application for a debt payment programme;
(c) the money adviser who made the application for the programme;
(d) each creditor taking part in the programme; and
(e) any continuing money adviser for the debtor.

47A Procedure at review
Where an application is made under regulation 47, the DAS Administrator must review the determination which is the subject of the application—
(a) within 28 days of the application for review; and
(b) on the basis of—
(i) the information provided in the application; and
(ii) any written representations received from the debtor, creditor or money adviser.

47B Decision
1 Following review of a determination the DAS administrator may—
(a) confirm its determination;
(b) amend or alter its determination; or
(c) revoke its determination and substitute a new determination.
2 The DAS administrator must intimate in writing the result and the effect of the decision—
(a) to the debtor;
(b) to any creditor named in the application for a debt payment programme;
(c) to the money adviser who made the application for the programme;
(d) to each creditor taking part in the programme;
(e) to any continuing money adviser for the debtor;
(f) to the payment distributor; and
(g) where there is a payment instruction under regulation 32, to an employer.

PART 10A APPEALS

47C Appeals
1 A debtor or a creditor may appeal to the sheriff on a point of law against a decision of the DAS administrator under regulation 47B.
2 An appeal to the sheriff under paragraph (1)—
(a) is to be by summary application; and
(b) must be lodged within 14 days after the date of intimation to the appellant of the decision appealed against.
3 The decision of the sheriff is final.”

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18 Forms
1 In regulation 37(4) (grounds for variation), for “form 3” substitute “form 4”.
2 In Schedule 1 (forms)—
(a) for the following forms substitute the numbered form of the same number set out in the Schedule to these Regulations—
(i) form 1 (application for a debt payment programme);
(ii) form 2 (notification of approval of a debt payment programme);
(iii) form 4 (application for variation of a debt payment programme); and
(iv) form 5 (application for revocation of a debt payment programme); and
(b) insert form 6 after form 5.

19 Minor amendments and revocations
1 In regulation 18(1) (debt arrangement scheme register), insert “public” before “register”.
2 In regulation 46(2) (notice of completion), for “mandate” substitute “instruction”.
3 In the Bankruptcy (Scotland) Act 1985—
(a) in section 7 (meaning of apparent insolvency) omit the subsection (1)(c)(vii) inserted by regulation 46 of the Debt Arrangement Scheme (Scotland) Regulations 2004; and
S.S.I. 2004/468 (revoked). A section 7(1)(c)(vii) in similar terms was inserted by Schedule 2 to the DAS Regulations.
(b) in section 14 (registration of warrant or determination of debtor application), omit the subsection (1)(c) inserted by paragraph 1 of Schedule 3 to those Regulations.
Section 14 (and the heading to that section) was amended by the Bankruptcy (Scotland) Act 1993 (c.6), Schedule 1, paragraph 3, the 2007 Act, schedule 1, paragraph 12 and S.S.I. 2004/468 and the DAS Regulations.
S.S.I. 2004/468 (revoked). A section 14(1)(c) in similar terms was inserted by Schedule 2 to the DAS Regulations.
1985 c.66. Section 7 was repealed in part by the Drug Trafficking Act 1994 (c.37) (“the 1994 Act”), Schedule 3, and the Criminal Procedure (Consequential Provisions) (Scotland) Act 1995 (c.40) (“the 1995 Act”), Schedule 5, and amended by the 1994 Act, Schedule 1, paragraph 10(2), the Criminal Justice (Scotland) Act 1995 (c.20), Schedule 6, paragraph 185(3), the 1995 Act, Schedule 4, paragraph 58(3), the Debt Arrangement and Attachment (Scotland) Act 2002 (asp 17), schedule 3, paragraph 15(2), and the Proceeds of Crime Act 2002 (c.29), Schedule 11, paragraph 15(3). Subsection (1)(c) was also repealed in part, and sub-paragraph (iv) prospectively repealed, by the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3) (“the 2007 Act”), schedule 6, Part 1 (see SSI 2008/115) and S.S.I. 2004/468 and 2011/141 (“the DAS Regulations”).

20 Savings
1 Nothing in regulation 3(3), 6, 12, 13(1) or (2), 14(3) or 18(2) affects a debt payment programme in respect of which an application for approval was made (under regulation 20 of the DAS Regulations) before the date on which these Regulations comes into force.
2 Nothing in regulation 3(5), 5, 14(5), 16 or 17 affects a debt payment programme where the determination—
(a) against which a review or appeal would be made; or
(b) which would be corrected,
was made before the date on which these Regulations comes into force.
Name A member of the Scottish Government St Andrew’s House, Edinburgh Date

SCHEDULE FORMS
Regulations 15 and 18(1) and (2)

EXPLANATORY NOTE
(This note is not part of the Regulations)
The Debt Arrangement Scheme (Scotland Regulations 2011 (“the DAS Regulations”) provide a scheme for the repayment of debts in Scotland. They provide for procedure and forms in respect of a repayment arrangement under the scheme, which on approval is described as a debt payment programme (“a programme”).
These Regulations amend the DAS Regulations and the Debt Arrangement Scheme (Interest, Fees, Penalties and Other Charges (Scotland) Regulations 2011 (S.S.I. 2011/238) in order to make changes to the scheme.
Regulation 3 amends the last mentioned instrument to amend the date on which interest, fees, penalties and other charges are frozen on an application for a debt payment programme, to the date of application for the programme from the date of approval, and makes consequential changes for the introduction of composition and reviews by the DAS Administrator.
Regulation 5 inserts provision into the DAS Regulations to enable the DAS Administrator to correct accidental errors.
Further amendments are made to the DAS Regulations to provide that fees for the services of money advisers are not included in a programme (regulation 6) and to make further provision as to who can apply to be a money adviser (regulation 7).
Regulation 8 removes duties on payments distributors to assist the DAS Administrator and advise on payment distribution (insofar as the DAS Administrator administers ongoing cases in place of money advisers who do not charge), to provide reports to creditors, and clarifies the application of the limit to the amounts charged by payment distrubutors.
Amendments are made to the information to be included on the DAS Register (regulation 9).
Regulation 10 amends regulation 22 of the DAS Regulations to remove the requirement that the two debtors in a joint programme have a debt for which they are joint and severally liable. Amendments are made to regulation 23 of the DAS Regulations (consent of creditors) to remove the need to send the request for consent by first class post and to provide that the period of 21 days to respond to the request applies irrespective of assignation of a debt. A creditor has to notify the DAS Administrator of an assignation of a debt included in a programme. Further amendments are made to require a creditor’s authorised representative to provide evidence of authority to act and for notification to the DAS Administrator where a representative is no longer authorised (regulation 11).
Regulation 12 increases the time limit in which the first payment under a programme is to be made from one month to 42 days. Regulation 13 allows for variation of a debt payment programme where a creditor has applied compensation (or “set-off”) between mutual debts owed between the debtor and creditor, reducing a debtor’s debt, where debtor and creditor do not agree a resultant variation. Amendments are also made to the duration of payment breaks and notification.
Regulation 14(1) allows revocation of a debt payment programme where there have been concurrent applications to the sheriff and DAS Administrator for bankruptcy and for a debt payment programme respectively, on an award of sequestration where the petition was presented before the debt payment programme was applied for. See also section 4(3) of the Debt Arrangement and Attachment (Scotland) Act 2002 and section 12(3A)(a) of the Bankruptcy (Scotland) Act 1985. Provision is also made for revocation on the death of a debtor. New provisions are inserted into the DAS Regulations to introduce composition after the debtor has made payments in terms of the programme for a period of 12 years and 70% of the debt is paid (regulation 15). In addition, a new review and appeal procedure is introduced (regulation 16 and 17). Provision is also made in respect of the effect of determinations which are challenged.
Provision is also made for new forms (regulation 18).
Regulation 19 makes minor corrrections and clarifications and implements recommendations of the Scottish Law Commission to remove technical duplication in provisions amended into the 1985 Act.
Regulation 20 includes savings provisions in relation to programmes approved and determinations made before these Regulations come into force.
A Business and Regulatory Impact Assessment of the effect which these Regulations are likely to have on business costs has been prepared and placed in the Scottish Parliament Information Centre. Copies may be obtained from the Accountant in Bankruptcy, 1 Pennyburn Road, Kilwinning.