DMP or DAS - which is best?

nma92

So I’ve found myself in a bit of a situation with a fairly large sum of debt. I have a little over £12,000 worth of debt, spread across credit cards and one catalogue.
I have recently had a change in my financial circumstances, in that I have had to move out of my parents and into rented accommodation, and I have lost hours in one of my jobs. So I am faced with more outgoings and less incomings than before.
I am now struggling to pay my debts. I don’t want to start defaulting on payments, as this is an issue I had several years ago as a student and they finally came off my credit report a year or so ago. So I am looking into some sort of debt payment plan.
I have gone to Step Change and used their online tool to find the solution they recommended and they have come back with either a DMP or DAS.
My question is, which one of these do people think is a better solution? I know the DAS is legally binding and protects me, but I’m unsure if I am able to get things on credit, such as a car or new phone (my car has non-stop issues and I think a new car may be needed in the future). I also would like to choose a solution which isn’t going to have a massive impact on my credit score in the future as I would like to buy a house in the future.

[Deleted User]

nma92 said:

So I’ve found myself in a bit of a situation with a fairly large sum of debt. I have a little over £12,000 worth of debt, spread across credit cards and one catalogue.
I have recently had a change in my financial circumstances, in that I have had to move out of my parents and into rented accommodation, and I have lost hours in one of my jobs. So I am faced with more outgoings and less incomings than before.
I am now struggling to pay my debts. I don’t want to start defaulting on payments, as this is an issue I had several years ago as a student and they finally came off my credit report a year or so ago. So I am looking into some sort of debt payment plan.
I have gone to Step Change and used their online tool to find the solution they recommended and they have come back with either a DMP or DAS.
My question is, which one of these do people think is a better solution? I know the DAS is legally binding and protects me, but I’m unsure if I am able to get things on credit, such as a car or new phone (my car has non-stop issues and I think a new car may be needed in the future). I also would like to choose a solution which isn’t going to have a massive impact on my credit score in the future as I would like to buy a house in the future.

If you enter into either a DMP or a DAS you will be paying back less each month that you contractually agreed to so in both cases you will default.  

With the DAS it will be recorded on your credit files and you will be put on the DAS register. You are also limited to taking out an extra £2000 credit whilst on a DAS but you’d probably struggle to find a lender in the first place and almost certainly the rate would be astronomical if you did. A DMP won’t prevent you from taking out further credit but again with a bunch of defaults on your credit files you’ll struggle to find anyone willing to lend you money. Why you’d want to get into further debt when you’re struggling with the debts you already have is a bit strange though.  

https://www.nationaldebtline.org/fact-sheet-library/debt-arrangement-scheme-s/?

https://www.moneysavingexpert.com/loans/credit-rating-credit-score/

sourcrates

A DAS is a Scottish form of insolvency, a regulated DMP if you like.
Both options would require your accounts to default at some stage, with a DAS as already mentioned, you would appear on the DAS register for the duration, so both options would give you problems of one sort or another.

Why the rush to jump in here, slow down, and take your time, save up some money to buy a car with, use the money that would have gone to your creditors, debt collection can take a very long time, how old are your debts, are they all enforceable ?

If you can put up with phone calls and letters, then nothing else will happen for at least a year, as long as you keep your eye on the post, to intercept any court claims, you need not rush into anything here, yes accounts will get sold on, or passed over to debt collectors, but all of that can be dealt with and managed.

Whatever you choose to do about this, after 6 years, you credit files will heal themselves, so don`t be too quick to go insolvent here.

[Deleted User]

nma92 said:

ItLover_of_Lycra said:

nma92 said:

So I’ve found myself in a bit of a situation with a fairly large sum of debt. I have a little over £12,000 worth of debt, spread across credit cards and one catalogue.
I have recently had a change in my financial circumstances, in that I have had to move out of my parents and into rented accommodation, and I have lost hours in one of my jobs. So I am faced with more outgoings and less incomings than before.
I am now struggling to pay my debts. I don’t want to start defaulting on payments, as this is an issue I had several years ago as a student and they finally came off my credit report a year or so ago. So I am looking into some sort of debt payment plan.
I have gone to Step Change and used their online tool to find the solution they recommended and they have come back with either a DMP or DAS.
My question is, which one of these do people think is a better solution? I know the DAS is legally binding and protects me, but I’m unsure if I am able to get things on credit, such as a car or new phone (my car has non-stop issues and I think a new car may be needed in the future). I also would like to choose a solution which isn’t going to have a massive impact on my credit score in the future as I would like to buy a house in the future.

If you enter into either a DMP or a DAS you will be paying back less each month that you contractually agreed to so in both cases you will default.  

With the DAS it will be recorded on your credit files and you will be put on the DAS register. You are also limited to taking out an extra £2000 credit whilst on a DAS but you’d probably struggle to find a lender in the first place and almost certainly the rate would be astronomical if you did. A DMP won’t prevent you from taking out further credit but again with a bunch of defaults on your credit files you’ll struggle to find anyone willing to lend you money. Why you’d want to get into further debt when you’re struggling with the debts you already have is a bit strange though.  

It’s not that I want to get into more debt, it’s that I am currently applying for jobs, most of which require a car. Should I not be able to sell my car with all its problems, I would need to look at getting a cheap one on HP. Which is the only reason I would take out further credit.
I have been reading up a lot on DAS and have seen that some people find that because they are on them, they are not able to rent privately as landlords will not accept them. This is something that worries me, as the jobs I am applying for would require me to relocate. So I’m trying to weigh up the pros and cons.

I’ve spoken to Step Change and they have started the process of a DAS, I’ve not yet signed anything. But I’m having second thoughts about which would be best.

You can't afford to service the debts you've got so a car on HP isn't going to help your situation assuming you can find someone willing to give your car finance.

The DAS will appear on your public credit files and will mean you are registered with the AiB so any future landlord will be able to see that if they go looking.  Defaults on the other hand a landlord cannot see as those are not on your public credit files.

@sourcrates is right.  There's no need to dive into either a DMP or a DAS straightaway.  You could write to your creditors asking for breathing space whilst you save up an emergency fund, a deposit and first month's rent for a new rental, and for a cheap second hand car or to fix your current car.  The forum has a Motoring section where several posters are knowledgable about bangernomics.

https://forums.moneysavingexpert.com/categories/motoring

JessyRM

I'd advise against making such a big decision when you are feeling overwhelmed. Have you looked at your entitlement to benefits? A sensible solution is what Sourcrates has suggested. 

sourcrates

Remember, unsecured credit debts are all non essential payments, if you can’t afford them, don’t pay them, a simple letter explaining your circumstances, sent to all your creditors, is all that’s needed for the short term.

The world doth not end because you can’t pay your credit card bill.