Friday, 20 April 2012

Das: Debt Arrangement scheme.

What you do to get out of debt can be one of the hardest decisions you will ever have to make, the first thing we always advice is to get free debt advice from a charity. Be aware of all the options that are available to you and your own personnel situation. For some there creditors start to push for the debt to be repaid if you are able to do this though need a little extra time then the Debt Arrangement Scheme (DAS) is the option that will let you do just that.

What is a DAS?

If you have two or more debts and know you could pay them back in full then this is the debt management tool for you. The reasons are varied for having to use a DAS it could be you have suffered from ill health and are just returning to work or you could have been made redundant from a well paid job as long as you are confident that things are going to better and that you are able to pay off your debt. Then a DAS is for you.

You set up a (DPP) debt payment plan with the help of a trained money advisor this will be based on your current financial situation, they will approach your creditors to get there approval. The amount of money you have available each month is split fairly between each creditor, though it is usually less than what you are contracted to pay them.

Once the offer has been put to your creditors they have 21 days to respond. If you do not hear from them you can assume they are happy to go ahead. If some of your creditors do disagree it does not necessarily mean you that that your DDP won’t go ahead. As long as your payment plan is fair and reasonable your money advisor will to the debt arrangement scheme for approval. Once it has been approved you will make one monthly payment to a payment distributer who will ensure that each payment is made on time to the creditors. At this stage your creditors cannot arrest your earnings or make you bankrupt.

A creditor’s objection would be upheld if they believed you would not be able to repay and that sequestration is the only option or if you had equity in property that could be liquidated to pay creditors.

If circumstances change what happens?

A DAS has been set up to be very flexible; if circumstances do change with more or less income then your money advisor will change the payments by either decreasing them or increasing them.

I have mortgage arrears what happens to them?

The DAS covers mortgage arrears however you must still be able to meet your regular mortgage payments. Your normal monthly payments cannot be included in your DDP.

However your creditors can still take you to court and try to force repossession, however by applying for a section 2 you can delay this process. The court will take into account your effort to pay them through your DDP. As the arrears are being paid through your DDP the court is not allowed to grant a payment order on arrears.

Will my family and friends know I am in a DAS?

It is theoretically possible for anyone to find out; there is a debt arrangement Scheme register which is publicly available. However it is not the sort of database you would just happen to find people would have to be aware how to go there and then search for your name. If you don’t tell them about it is very unlikely they would just stumble on it.

Entering a DDP will affect your credit rating.

Before entering any debt solution we always recommend that you seek professional debt advice we recommend that you contact a registered charity who will give you the best advice to suit your own personnel situation.

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