Questions on DAS Scotland and Mortgage Support Scheme

Suffol

Hi

Over last six months, OH has experienced disastrous loss of income from self-employment (lost two major clients - a third has warned of impending doom). His income has dropped from £2.2k+ (profit, after tax) per month to £1k. Likely to be only c. £450 from next month.

In light of this and poor result from massive efforts to find new business, he's decided to take up 1 year teacher training place in September. The effect on the family budget has been, and will be, disastrous. From next month I'll be looking at a shortfall of c. £800 for making repayments on about £80k of personal debt (almost all in my name). This is after drastic cutbacks all round (three kids at school, need two cars) and there is nothing obvious left to cut back on to get us past such a big shortfall - kids are already state-schooled, we run two elderly cars without finance on them and mortgage is already interest-only & has been for past two months. We have some equity in house, but single income won't allow remortgage to cover more than about 1/4 of the debt, and lender (Northern Rock) not very helpful to date.

Luckily I have a good income which is ultra-secure, and I've never missed a payment yet, but have been making only minimums for a few months now, and problems are worsened by an MBNA rate on £18k jumping from zero to 34% last year - and they won't budge on it.

Although this is a short-term problem, it seems insuperable - no rich relatives to bail us out - and I have an appointment with a council money advisor next week to advise us how to proceed. Researching in advance, I have two questions:

DAS looks attractive, particularly since after a year we'd be able to increase payments and finish it quicker. I'll have about £850 excess income to pay unsecured creditors after living expenses / priority bills - this would rise significantly after OH got teaching post from August 2010. However, we have two joint credit agreements - a NR 'together' unsecured loan of c£20k, and a BoS overdraft of £5000. The together loan is a low payment, and OH would be able to cover it from continuing some limited consultancy in evenings / weekends. the overdraft could just continue - interest is £60 / month. Could those be left out of the DAS? Or my element covered (i.e. half). How would it work?

Second question - if we were accepted onto the Mortgage Support Scheme, and we might qualify if I read the booklets online properly - we might _just_ be able to manage to continue to make contractual payments. But the woman at Northern Rock was very (a) unhelpful (b) ignorant and seemed to imply that this was 'last resort' and that if I had excess income after essential / priority expenses we'd not qualify - despite losing big chunk of income. I didn't get any feeling that she knew what she was talking about. Any experts or first-hand experience out there?

Many thanks in advance

Chris