WIREDGOV

Issued on behalf of Accountant in Bankruptcy.

Debt Arrangement Scheme extended to small and medium businesses.

Measures to allow small and medium businesses in Scotland continue to trade while dealing with debts have been introduced by the Scottish Government.

As of Thursday, December 11, 2014, the existing Debt Arrangement Scheme (DAS) regulations which allow individuals and sole traders some breathing space from creditors are being extended to partnerships, trusts and small to medium unincorporated businesses.

Administered by the Accountant in Bankruptcy (AiB), DAS freezes interest, fees and charges to prevent debts mounting up while allowing those applying for the scheme to commit to repaying their debts over a period of up to five years.

Extending the scheme to small and medium businesses means these outfits will access an early intervention mechanism which delivers advice, guidance and debt management solutions.

It is anticipated the measures will help prevent unnecessary business insolvency.

Business Minister Fergus Ewing said: “A thriving business sector is pivotal to the growth of the Scottish economy and these changes to the Debt Arrangement Scheme will help small businesses continue to trade and retain jobs.

“Since AiB introduced the Debt Arrangement Scheme in 2004, thousands of people in Scotland struggling under the burden of debt have benefitted by allowing them to tackle their debts in a dignified way.

“By extending this initiative to small and medium businesses and other eligible entities, we are ensuring the lifeblood of Scotland’s economy receives the same protection and stops otherwise sound businesses collapsing.”

A range of other amendments to the DAS regulations have also been introduced yesterday.

As part of the introduction of the Debt Arrangement Scheme (Scotland) Amendment Regulations 2014, provisions for the application of the Common Financial Tool to individuals using the DAS scheme will come into effect in April 2015.