Debt Arrangement Scheme

Gill1985

Hi, I'm just looking for some information about a DAS ? I recently found out my husband had racked up £24500 across 2 overdrafts (that was some conversation).

I've since let my husband move back in and we are looking at how to pay everything off. There is 52k in debt of total going across loans, car, credit cards and the overdrafts. Our house currently has around 20k equity, I really don't want to lose our house. I've spoken to the debt helpline who were very helpful and have advised a DAS would be the best option as I have £921pm disposable income, With overdraft daily fee's at £192 across 2 accounts I cant get the debt down at all. I've not missed any payments on anything yet but it's getting to that stage now.

I contacted my local welfare rights and they have taken my details and a money advisor will be in touch, however the girl taking the details seemed to think bankrupty would be the best option.

I was advised by debt helpline that if I went bankrupt my disposable income could be taken for up to 6 years, the debt would be cleared within 4.5yrs on the DAS and house saved. I'm waiting to hear from the money advisor to hopefully apply for a das.

I've opened a safe bank account as advised which has no links with creditors, Awaiting getting wages and everything moved over. I'm so worried about everything right now, not been able to sleep and my panic attacks have started again

Can anyone advise what the process is for applying for the DAS ? Will they require bank statements ? how long does it take to get approved ? How long do you have from when it's accepted to make the first payment ? Are bank accounts closed when you enter a DAS ? Thanks

lizzy23

Do you mean a Debt Management plan, where you pay as much as you can afford to your creditors? if so you will need to open a new bank account which isn't connected with your debts, mine was set up pretty quickly

Lensman_2

Gill - do you live in Scotland?

A Debt Arrangement Scheme applies in Scotland and it is a formal Debt Management Plan. Scottish law provides protection from a court claim or bankruptcy proceedings.

More info from Stepchange here:
http://www.stepchange.org/Debtinformationandadvice/Debtsolutions/Debtarrangementscheme.aspx

Personal bankruptcy in Scotland is called Sequestration. The rules for this are different to those for bankruptcy in England and Wales and I don't know enough about Sequestration to comment further.

coolcait

If you go bankrupt, with that amount of disposable income, you will be asked to pay a substantial amount towards an Income Payment Agreement (IPA). If you don't 'agree' to the IPA, then you can be taken to court and have an Income Payment Order (IPO) imposed.

With the amount involved (nearly 1,000 quid a month) I think it's pretty certain that you'd find yourself in court, and end up with an IPO.

An IPA/IPO lasts for three years from the dated it is signed/imposed.

You'd also have to find a way to raise the equity in your home, or risk having it sold.

With DAS, you don't have to pay anything towards the equity. If you can pay 900 pounds per month, you could clear the debt in under six years. Interest and charges are frozen from the date the DAS is approved.

It makes sense to get a bank account with a bank where you have no debt, just because there's no way of knowing how a particular bank will react to a DAS. Most of them seem to be OK with it, although some of them will ask you to move to an account with no overdraft.

The sooner you get to see a money adviser, the better. They will have to sort out the paperwork, and put in your application to the DAS Administrator. After the DAS Administrator accepts it, the proposal will go to your creditors, and they have 21 days to accept or reject it.

If they don't reply, then that's taken as 'acceptance'. If any of them reject it, then the DAS Administrator will decide if it's 'Fair & Reasonable', and can still approve it.

If it's rejected, you haven't lost out on anything, as you can still go for another option. Whereas, once you are made bankrupt, you are bankrupt (unless you can gather enough money to pay off all of your debts, and the bankruptcy trustee's fees).

It's important for your money adviser to make sure that they get the correct creditor information, as it can slow things down if the proposal has to be sent out - again - to the right organisation.

Once it's approved, you are expected to make the first payment within 30 days. Keep that money to one side, so that you can make a one-off payment within the 30 days, while allowing yourself time to set up a direct debit/standing order for a day of the month which suits you best (just after payday!).

HTH, and good luck.

Gill1985

Thanks, I've been doing alot of research on a DAS and think this is the best option for us, I really don't want to go down the route of banrupty (Sequestration) as I would lose my job (work at bank) and our house, with 2 kids under 8 it would be alot of stress on them for our errors. Fingers crossed we are accepted for the DAS then we can cut back for a few years and look forward to a debt free future.

Just managing to make payments to everything at the moment, it's just with the overdraft fee's the £25k debt never goes down. Going to keep paying everything till I see the money advisor not sure when that will be as local council told me there busy at the moment, giving them till Thurs before I chase them up.

Fingers crossed creditors don't refuse most the loans which is about half the debt will still be paid off just a couple of months behind when they should have cleared if they ran there course, so hoping they accept.

Lensman_2

Glad you have looked in to it and chosen your path. I wish you good luck on it.

Perhaps you can up date this thread from time to time so that others in a similar situation can see what to expect?

DS4215

So your husband has run up at least £25k of debts and you are making arrangements to pay it back? - are the debts in his sole name, your sole name or joints names?

Be very careful with this if they are in his sole name. If you go forward like that then you could end up paying the debts back while he just runs it up again at some point in the future.

If you need advice quicker, speak to National Debtline or Stepchange over the phone when you get chance.

National_Debtline

Hello there.

If you would like any further information with regards to the DAS, there is a very good website which you can find here:

http://www.dasscotland.gov.uk/

If you would like to discuss anything with ourselves please do consider giving us a call or drop us a line right here.

Best wishes,

David @ NDL.