Debt Arrangement Scheme (DAS)

sgx.saint

Hey.

Read a few posts, and researched the Debt Arrangement Scheme, but still have a few questions which I hope you experts can help me with!

First question, are assets taken into account i.e. a car.

Second question, who calculates the monthly repayment amount? i.e. Me, or a Money Advisor?

Third question, is the length of time for a DAS based on the monthly repayment amount and how long it takes to clear the outstanding balance, or is it based on a fixed period?

Any information and guidance would be appreciated!

beanielou

Depends on value of car & any assests.

The repayment is calculated by MA in consultation with you.

Maximum term for DAS has just increased to 12 years.

HTH

sgx.saint

beanielou wrote: »

Depends on value of car & any assests.

The repayment is calculated by MA in consultation with you.

Maximum term for DAS has just increased to 12 years.

HTH

Hi Beanielou, thank you for replying to my posts!

So, in repayment terms, its fairly flexible, and I would have a large amount of input?

Does the MA arrange the DSA on my behalf, how much input/work is required from me?

The car is worth £2500, but on all the website relating to DAS, none mention whether a car is taken into account. I have no other assets.

12 years, is quite a long time, however, when my inheritence is received, I can obviously then make arrangements to have the outstanding balance cleared.

If I agree and enter into a DAS, if my circumstances change, can I terminate a DAS agreement and say enter a Trust Deed?

Thanks again for all your help.

beanielou

Sorry not sure on car.
DAs can be terminated at any time AFAIK.
THe MA has guidelines to follow on figures for DAS but it can be flexible within that IYSWIM.MA does all the formal arranging.
They seem to work quite well & give you protection from creditors taking further actions which is of course good.

coolcait

DAS generally takes no account of your assets. It doesn't matter if you have a car, a house, a yacht or anything else. You wouldn't be refused a DAS simply because you had all of those things. And you wouldn't have to make any payments to 'buy out' the value of those assets.

(The only exception to the above would perhaps be a case where you were looking at paying the DAS over more than ten years, but could bring that length of time down by selling an asset to reduce your total debt).

In a Trust Deed, as in bankruptcy, your assets would vest in the Trustee, who can ask you to 'buy out' the value of your car or any other asset. You will find other people's experiences of Trust Deeds and of DAS - both good and bad - on this forum.

I know there has been a lot of talk about planned changes to DAS, but I was under the impression that they'd fallen through. AFAIK, there is still no maximum length for a DAS under the legislation, but the 'DAS Administrator' is unlikely to approve anything over 10 years. However, if all creditors agree to the DAS, then the DAS Administrator has to approve it, no matter how long it lasts. So you do hear of programmes lasting for longer than 10 years. It's down to the individual to decide if that's the right thing for them.

Your money adviser will work out your income and expenditure with you, and agree the monthly payment with you. They don't get a fee based on the level of your payment. You would pay the agreed amount to a payment distributor each month. They would then pay your creditors, taking off a 10% fee (max). The end result would be that you pay the full amount you owe, and your creditors get 90% of the debt.

It will affect your credit rating, of course, just as a DMP does. But it is not insolvency. Trust Deeds and (of course) bankruptcy are counted as insolvency.

You can't just walk away from a DAS - just as you can't just walk away from a Trust Deed or from bankruptcy, but it can be terminated. You can't sign a Trust Deed while you're in a DAS; you can't go onto DAS while you're in a Trust Deed.

If you receive an inheritance while in DAS, you can ask your money adviser to arrange for a variation to the programme to enable all of your debts to be cleared. You would pay the outstanding balance on the debts owed; the payments distributor would discount their 10% fee; your creditors would get 90% of the debt owed to them. Say you inherited £30,000. So, if you'd started off owing £20,000, and had already paid £5,000 through the DAS, you'd pay £15,000 from your inheritance to clear your debt. The payments distributor would take their 10% fee, so your creditors would end up with 90% of what you'd owed them. you'd have £15,000 left from your inheritance, and official confirmation that you'd completed your DAS. If, at any time in the future, you happen to be completing a form which asks you 'Are you, or have you ever been personally insolvent?' you can truthfully say 'No'.

If you receive an inheritance while in a Trust Deed then, as in bankruptcy, it would vest in the Trustee. The Trustee would also firstly pay their own fees and costs, then pay your creditors. It is possible that if you owed, say, £20,000 and inherited, say, £30,000 that all of your creditors could be paid off in full, but you got significantly less than £10,000 back after your trustee's fees had been paid. Even if you'd already paid contributions worth £5,000. You would get a letter from your Trustee confirming that you were discharged from your Trust Deed. If, at any time in the future, you happen to be completing a form which asks you 'Are you, or have you ever been personally insolvent?' you cannot truthfully say 'No'.

If you are in a DAS, your creditors are prohibited, by law, from taking any kind of legal action against you; they cannot ask you to pay more per month than has been agreed in the DAS - they cannot ask you to make extra payments; they should contact your money adviser to discuss payments, not you; they must, by law, freeze interest, fees and charges - and these will be written off when you complete the DAS.

In short, DAS offers much the same protection from creditors as a Trust Deed or bankruptcy does, without you having to go bankrupt.

Given that this is something of a treatise already, I will not cover the 'Trust Deed v DAS' angle. Also, there are others on the forum who will give Trust Deeds a more positive spin than I ever could .

I would note that I gain no personal financial advantage whatsoever from any person's decision on how best to deal with their financial issue - whether that be opting for DAS or Trust Deed or bankruptcy.

sgx.saint

Thank you for that insightful post coolcait

I've decided to go ahead with a DAS after much research and thought.

I do have another question which I would be grateful if anyone can answer.

If I took out a mortgage whilst in a DAS, would my home automatically be protected, or would I have to enter a new DAS?

Sososad

Hi, I hope you dont mind me popping in on this, but i have applied to CAB to go into the DAS Scheme and they are looking at it for me, to cut a long story short at the end of last year i signed to go into a trust deed, five weeks later it failed to become protected, i opted to go into a dmp rather than bankruptcy, my ip sent me a letter saying he resigned and all debts were re-vested back into my name. Do you think this means i am not in a trust deed and can go into the DAS scheme? sorry so many questions just a bit confused as i am now in a position to pay more money.

sgx.saint

Hi Sososad,

Did you get any further with your DAS?

I've not had much look unfortunately as either I have too many creditors, or the repayment term is too long for my DAS application to be accepted.

Does anyone know of any DAS administrators that would accept a DAS with an approximate repayment term of 12 years?

I wonder if CAB would be my best bet?

beanielou

AFAIK the maximum term for a DAS was 10 years but it may have gone up to 12 recently.
BUt you do need to check with a DAS accredited person.

sgx.saint

beanielou wrote: »

AFAIK the maximum term for a DAS was 10 years but it may have gone up to 12 recently.
BUt you do need to check with a DAS accredited person.

Hi beanielou,

Thanks for the reply.

I've contacted a few DAS advisors, and got differening response. Most recently I was told the maximum term for this particurlar company was five years.

Strange, you would expect and industry standard so to speak.

I might see if I can get in touch with my local CAB, as they usually have advisor who are DAS qualified.

Be good to see if anyone else has any ideas?

beanielou

AFAIK DAS's can only be offered through accredited money advisors & again my understanding is that it is a standard time frame through the industry.