The Debt Arrangement Scheme (Scotland) Amendment Regulations 2013

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.