LBM, advice, experiences welcome DAS

toots82

Hi all,

so....where to begin? I'm 31, married, 2 kidlets and finally had my LBM the other week.. With debts including many cc's, next acc, personal loan and overdrafts it finally all got too much, to the tune of around £34k :eek: Interest rates were high and credit score very low. To cut to the chase we have a DAS (Scotland) arranged and am happy with it all. Just need to sign the final paperwork then it will all begin. I am waiting for new bank acc paperwork ( were accepted for normal Clydesdale account and offered overdraft...emmmm no ta lol) then can move dd's and wages over.

We were stuck in an awful cycle of barely breaking even every month, more and more relying on credit cards for the shopping etc. It was horrible and scary and I looked into secured loans and extra borrowing on house but there's not enough equity. We have a house worth around 95k with 65k still due on it.

So, my questions are, is there any point in rushing to pay off das, we're looking to set it up over 5 years but could hopefully pay it back sooner, but if the defaults show on file for 6 years does it make much difference? Obviously its all the sooner you're debt free but does it go far in helping credit rating? If you settle all defaults and improve rating, can you get a mortgage anywhere with settled defaults on account? We are with Halifax at the moment, if we pay off everything in a few years and get rating back up; would it be possible to move to a bigger place therefor increase mortgage?

Any experiences or wise words would be brilliant....be gentle, its all still sinking in

JulieGeorgiana

I personally just paid what I had to and lived on what I had left. I decided to save a little on the side though for the rainy day.

But for me there was no reason/need to pay it off early.

When I met my DH though and took on his debts, because we wanted to get married, have children etc. we decided to pay it off as fast as possible by cutting back everything we could.

Truth is both ways work, the first is longer but less brutal on your day to day life. The second helps you breath easier and get what you want faster.

We're now debt free, married, bought our first home, and have baby #3 while I'm a SAHM and DH supports us. It was worth the years of living on a shoe string

Tixy

It can be possible to get a mortgage with settled defaults on file, typically though you'd need a much higher % deposit than someone with a clean file (and still likely pay slightly higher interest rates).
Thats based on the current situation - I wouldn't like to speculate on the state of mortgages in a few years!

toots82

Tixy wrote: »

It can be possible to get a mortgage with settled defaults on file, typically though you'd need a much higher % deposit than someone with a clean file (and still likely pay slightly higher interest rates).
Thats based on the current situation - I wouldn't like to speculate on the state of mortgages in a few years!

does equity count towards deposit, say I sell my house for 100,000 and by that time we only have 60,000 left of a mortgage, does the 40k count as deposit? We have had this mortgage for nearly 10 years with Halifax, never missed a payment or anything

Tixy

Sorry yes equity and/or deposit - I should have said you can usually borrow a lower ltv overall.

So you wouldn't get a 95% mortgage for example. But possibly could get an 80% mortgage.

toots82

Tixy wrote: »

Sorry yes equity and/or deposit - I should have said you can usually borrow a lower ltv overall.

So you wouldn't get a 95% mortgage for example. But possibly could get an 80% mortgage.

thank you, I'm not the brightest when it comes to mortgages etc.

National_Debtline

Hello there.

If you're under a Debt Arrangement Scheme all of the interest and charges on your debts have been frozen. Taking further borrowing to pay off the debt would actually cost you more in the long run - so from a financially perspective a DAS is your best bet.

You're absolute right in relation to the defaults on your credit file. If you were to pay the debts off they would stay - although if the debts have been settled this would also be reflected on your file.

With any form of borrowing we would always urge you to seek financial advice and to spend as much time as you can ensuring that you are getting the very best deal to suit your needs.

We have had many clients who have managed to control their debts and then go on to remortgage or move, it's very possible!

For what it's worth, I really like the DAS. I wish there was something similar for the folks south of the border!

Best wishes,

David @ NDL.

toots82

National_Debtline_representative wrote: »

Hello there.

If you're under a Debt Arrangement Scheme all of the interest and charges on your debts have been frozen. Taking further borrowing to pay off the debt would actually cost you more in the long run - so from a financially perspective a DAS is your best bet.

You're absolute right in relation to the defaults on your credit file. If you were to pay the debts off they would stay - although if the debts have been settled this would also be reflected on your file.

With any form of borrowing we would always urge you to seek financial advice and to spend as much time as you can ensuring that you are getting the very best deal to suit your needs.

We have had many clients who have managed to control their debts and then go on to remortgage or move, it's very possible!

For what it's worth, I really like the DAS. I wish there was something similar for the folks south of the border!

Best wishes,

David @ NDL.

Hi David,

thanks for reply, we're very happy with the proposed das, just hoping its all accepted ok; it certainly seems to be one of the plus sides to being up here. Excellent middle ground I guess. Avoids insolvency etc so we can get back on track.

So I think our plan is to just get it paid asap so the chances of being able to move increase. I hear Halifax are a bit more flexible than a lot of mortgage providers and so far we've been with them 10 years and never missed a payment or anything, who knows, they may be willing to allow us to borrow more with them even with settled defaults. At the moment I'm just enjoying the relief

Thanks again

billybraggtastic

I've been in a DAS since Jan 10. Due to end Aug 15.

As above, National Debt Line guy I spoke to could be more positive about it!

It can seem a bit of millstone at times, but there are options to review if circumstances change, I've just opted to keep a fairly aggressive pay back period so that I can be debt free as early as possible. I have wondered about paying early but I don't think there is any significant advantage and it has meant that any spare cash has helped us as a family to enjoy things such as eating out and holidays - we can't do everything we used to do but we do all right!

The only negative I have experienced was getting a mortgage approval. We sold our house and downsized a bit. Mortgage went form around 100k to 40k but were refused twice by Halifax (our existing lender). It was very stressful but we kept the pressure on and they relented in the end.

Hopefully by the time the DAS is settled arranging our remortgage will be easier.