The Debt Arrangement Scheme (Scotland) Amendment Regulations 2004

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Debt Arrangement Scheme (Scotland) Regulations 2004 (S.S.I. 2004/[ ]) (“the principal Regulations”), which provide for a scheme for repayment of multiple debts in Scotland.

The principal Regulations provide for procedure and forms in respect of a repayment arrangement under the scheme, which on approval is described as a debt payment programme. The DAS administrator has the main responsibility for approval or rejection of applications for approval as a money adviser or payments distributor, and for approval, variation or revocation of a debt payment programme.

Regulation 3 amends regulation 1 of the principal Regulations to provide that the principal Regulations shall come into force on 30th November 2004.

Regulation 4 amends regulation 5 of the principal Regulations to provide that fees payable in respect of inspection of the register of approved debt payment programmes shall be payable in advance.

Regulation 5 amends regulation 7 of the principal Regulations to provide that a debtor does not require to give written notice to the DAS Administrator when a money adviser ceases to act for the debtor by reason of the resignation, or revocation or suspension of approval, of the money adviser. It also clarifies and confirms the duty upon a money adviser to assist the debtor to appoint a replacement money adviser when the approval of the first money adviser has been suspended or the money adviser has resigned.

Regulation 6 inserts a new regulation 9(4) in the principal Regulations imposing a duty on the DAS Administrator to provide written notice to a debtor whenever the approval of their money adviser is suspended or revoked.

Regulation 8 amends regulation 16 of the principal Regulations by increasing the administration fee which can be charged by a payments distributor from 5% to 10% of the sum due to be paid to a creditor in a distribution by the payments distributor.

Regulation 9 amends regulation 29(2) of the principal Regulations and inserts two further standard conditions that will apply to all approved debt payment programmes.

Regulation 10 amends regulation 30(3)(a) of the principal Regulations so that only the debtor’s sole or main residence is excepted when the DAS administrator is considering whether to require the realisation of an asset.

Regulation 11 amends regulation 35 of the principal Regulations by providing–

• that attachments are recalled;

• that awards payable under the Social Contributions and Benefits Act 1992 (c. 4) are omitted from the list of circumstances where it is permissible to give credit to a debtor;

• that the reference in regulation 35(5)(a)(ii) to section 40 of the Child Support Act 1991 (c. 48), which does not apply to Scotland, is replaced with a reference to section 40A of the Child Support Act 1991;

• for the use of new forms 5(a) and 7(a).

Regulation 14 amends regulation 50 of the principal Regulations to provide that an appeal to the sheriff under paragraph (1), (2) or (3) shall be by summary application and an appeal to the sheriff principal under paragraph (4) or (5) shall be by note of appeal.

Regulation 15 amends Schedule 1 to the principal Regulations by omitting form 2 (Application for approval as a payments distributor) and form 12 (Report of completion by a payments distributor). The applications and reports which were to be made using those forms are now to be made in writing (see regulations 7, 12 and 13). Forms 3, 4, 8 and 10 are omitted and replaced with the forms set out in Schedules 1, 2, 5 and 6 respectively. A new form 5(a) is inserted for notifications to creditors of approval of a debt payment programme and a new form 7(a) is inserted for notice of recall of an attachment.

Regulation 16 amends Schedule 5 to the principal Regulations by omitting the duty on payments distributors to make and maintain appropriate arrangements for customer services.