Readers Questions

  1. Michelle

    I have been paying a DAS since May 2018 without issue. I have been furloughed 9 out of the last 12 months, I got a month payment break from my financial adviser and DAS administrator agreed a 6 month payment break which has now expired so I have had to restart payments. I am still on furlough and am likely to be for several more months yet as I work in hospitality, and my total income is around 50% of what it was when my DAS was set up. One of my creditors has now sold on a debt because of “missed payments “ despite the agreed payment break and I am being chased by debt collectors My current DAS payment is around 40% of my income. What options do I have? I am not keen to sequestrate as I have a car which I require for work as I live in rural Scotland and effectively I restart the clock on an adverse credit history for another 6 years when I am almost 3 years into the DAS.

    1. Scottish Adviser Post author

      Hi Michelle

      I would suggest you go back to you Money Adviser and ask for a further payment break.

      The Debt Arrangement Scheme Administrator is currently taking the view they will not revoke any Debt Payment Programme where the person can show they have genuinely been impacted by the Coronavirus financially.

      It sounds to me like your adviser has taken a formal approach to arranging a payment break for you, by allowing you a one month Crisis Break (your adviser can authorise two of these in any 12 month period, and they don’t need to be consecutive). They also then appear to have got you a 6 month break, which is the maximum that formally can be allowed.

      However, there is currently an informal approach being used at present also of you just not paying anything and your Money Adviser updating the Notes in the Debt Arrangement Scheme’s system to say your still affected and not able to pay.

      This isn’t a formal break, but if any creditors request your Debt Payment Programme be revoked, the DAS Administrator will be aware you have financially been impacted by Covid and as I say they are not currently revoking these DAS cases.

      This will not last for ever, but I suspect the DAS Administrator is not ready to start revoking cases yet, so may buy you more time.

      You need to speak to your adviser though. If they don’t know your still struggling they cannot help you.

      In terms of the debts being sold on, this is happening a lot at present as lots of debts are not getting paid by people impacted, so Creditors are just cutting their losses and selling on debts. Many of these debt purchasers are starting to chase people again, often because they don’t know your in a DAS but also some are doing it again as they are not receiving any money. They shouldn’t be doing this, but stopping them is another thing.

      Don’t worry, however, whilst your DAS is still protected there is not a lot they can do but send letters etc and call you. Just ignore them. Legally they are in the wrong.

      In terms of other options, there may come a point you need to consider whether the DAS is going to continue to be the right option for you.

      In terms of the Credit Rating, you are correct if you go bankrupt it may have a further impact on your credit rating.

      However, think of it another way. If you cannot return to paying your DAS, you may still owe debt longer than you expected (I obviously don’t know long your DAS has to go or how much you still owe), but an option like Bankruptcy may see you become debt free sooner.

      Also in terms of cars. If they are worth less than £3k and you own it outright, and have a reasonable use for it (you live in rural Scotland), it is protected.
      Also if it is subject to Hire Purchase, Conditional Sale or a PCP agreement, you don’t own it, so if you can still afford the payments, you may be able to keep the car in bankruptcy.

      Bankrutpcy is, however, a complex issue, especially if you own your home, so you need to get detailed advice before you go down that route and find out how exactly it will impact you. You should speak to your Money Adviser about this. You may want to see if you can keep your DAS going just now, but I would keep an open mind that there may be better options long term, especially if your circumstances have changed.

      I hope that is of help to you.

      Alan

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