WHAT IS A BUSINESS DEBT ARRANGEMENT SCHEME (DAS)?July 11, 2017
Could a business das help one of your clients?
Business DAS was introduced by the Scottish Government to help partnerships, trusts and unincorporated bodies which are in debt.
This programme offers a solution to robust businesses who have experienced a catastrophic event, to help them trade on until they recover. It can also potentially help the so-called Zombie or JAM (just about managing) businesses which are only able to pay interest on debts, where that interest is at punitive rates. By freezing the interest, they may be able to pay the capital off over sufficient time.
This is a debt payment programme which allows a business to pay its existing debts over a period of no more than 5 years, whilst stopping all further interest and charges. In addition, this programme protects it from creditors taking debt recovery action. This means the business can deal with its debts whilst continuing to trade thus avoiding unnecessary insolvency procedures. This could protect the business and personal assets of your client as well as potentially saving businesses and jobs.
An Insolvency Practitioner (I.P.) must provide debt management advice to the business and if the I.P. can certify that the business is viable and has a genuine chance of successfully completing the process, the business entity can apply for a debt payment programme. It is a requirement of DAS that ongoing liabilities are met in addition to making the agreed payments towards the existing debt, which can be paid weekly or monthly. If the programme is not maintained, or if current creditors are not paid then the DPP may be revoked and all interest and other charges can be applied retrospectively by the creditors.