DAS - advice needed!
Hi, looking to hopefully get some advice on here about my DAS. It's been running now for 5 years with another 12 to go - started at £64,000 and now at £44,000.
In the summer I moved area for family reasons and in doing so gave up my job. I'm 60 next year but genuinely thought I'd find it relatively easy to find another job with my experience. I was provisionally offered a job but was told that I didn't pass the pre-employment credit checks which has left me totally demoralised. I took a temporary Xmas supermarket job but suffered a panic attack on day 3 and didn't go back.
My claim for Jobseekers Allowance has now ended and I'm now living completely off a small monthly private pension and my savings - I have £13,000 left from the sale of my old flat.
I asked my Money Adviser about a payment break and ended up offering £10,000 as partial settlement - I received an automated message via eDEN on Saturday to say it had been rejected. My Money Advisor was one of the experts on here but my case has been sold on to another company.
My problem now is that I don't know how to proceed. I'm considering coming out of the DAS and dealing with my creditors myself. Once my savings are gone it'll be revoked anyway but at least just now I have something to offer them. If I cancel my direct debit to the distributor and standing order to the Money Advisor then presumably the process would start?
My situation just seems so hopeless and I don't know how it will ever get better - I'm now at the stage where I rarely leave home except with family and any confidence I had is gone.
Thanks for reading and apologies for waffling. If anyone has any advice I'd be very grateful.
Hi elljay. I can totally understand your feeling of hopelessness about your situation - things have certainly not worked out well for you recently and it would be enough to cause anyone to feel the way you are. The good news is that there is almost always a solution to be found - it is possibly just that DAS may not be the most suitable one for you any longer. Hopefully we can help find the best route for you given your change in circumstances, if you don't mind giving us a little bit more information.
Why was it you chose DAS over such a long period of time in the first place? Was it because you owned the flat you mentioned and didn't want to lose it at that point? Do you own other assets or property still, such as your current home?
Hi Kevin, thanks for your reply.
It was originally to run for 12 years, paying £400 per month, but 2 years ago I applied to have it reduced to £300 due to reduced income - I therefore pay the £300 plus £30 for the Money Advisor.
At the time I owned a property jointly with my ex husband which was sold when my youngest child turned 18. This was why I didn't consider a trust deed at the time but a DAS. I then purchased a small flat to live in which was sold this year and the proceeds used to buy a similar property in my new area. I'm now living off what is left. I have considered selling, paying off my debts and renting but think it would be impossible to find a rental property with no job.
Do you think it a good idea to exit the DAS? Do you have any advice re dealing with my creditors myself?
It is usually unwise to come out of a DAS without another plan in place, for a couple of reasons.
1) Your creditors would have the right to add on any interest/charges that have been frozen over the whole period of your DAS so far.
2) You would no longer have protection against creditors taking legal action against you, such as arresting funds in your bank or seeking to make you bankrupt instead.
In your case, it might not be quite so clear cut given that you are paying £30pm to your money adviser - that is going to add up to a lot of money over the full term. Fees like this cannot be charged for DAS payment programmes that are set up now - the rules changed in 2019 after yours was arranged, but weren't retrospective unfortunately.
Was the payment break you asked for ever arranged? It seems a good idea to me as a temporary solution at least, to give you time to try and make other arrangements or to hopefully find work.
Your settlement offer may have been rejected, but it may be possible to get some creditors to accept an improved settlement offer so that your total debts are reduced. If you offered 50p in the £ instead then you might get some takers and your £10k could at least reduce your debts by £20k. if there is any room in your budget to be able to afford a lower monthly payment then it might be possible to make the DAS sustainable again on that basis due to the lower debt level.
Hi, I'm not sure if a payment break was ever applied for - I've had no further contact with the Money Advisor since the partial settlement offer went in last month and was informed via eDEN that it had been rejected. She did say that by applying for a payment break I was saying I have no funds when I do ie the £15,000 and this would be "awkward".
Would I deal with the creditors myself and offer a larger percentage or do it through the Money Advisor? It's my understanding that they all have to be treated equally so would I offer them all the same and see if anyone accepted it?
I fully understand what you're saying about exiting the DAS and will ask the Money Advisor again about applying for a payment break. I wish now I'd just gone with this and not made the partial settlement offer at all.
Thank you again for your advice Kevin. You were my original Money Advisor 5 years ago and I always found you very approachable and helpful!
I don't see why there should be any problem applying for a payment break. The criteria are clearly set out in the regulations: you can apply for a payment break of up to six months where the money you have left over each month has reduced by 50% or more as a result of a period of unemployment. The funds from your property sale shouldn't come into this.
In terms of an improved settlement offer, if you are still in the DAS then it needs to be made via your money adviser. There is no reason they can't make the offer to all creditors equally and then see who accepts.
That's very encouraging - I sent over my revised income and expenditure when I made contact last month so hopefully a request for a payment break will be straightforward.
Just a quick update to say that my payment break was approved - unfortunately my direct debit for this month had already been taken so it looks like it will be in effect a 5 month break rather than the 6 but hopefully that will be long enough to find a new job and get back on my feet.
One other query - is it possible to change my Money Advisor midway through a DAS? It has already been done once when the original firm who dealt with my DAS sold on that side of their business to the current firm but this would obviously be at my request. Given that I pay £30 for the service I'm assuming I must have some say in the matter?
Again, thanks for any advice.
I think it should be up to you who your continuing money adviser is, so it should be possible to switch to another if you wish. However, I must admit I am not certain on this so I will query it with the DAS Administrator and let you know once I have a response.
Hi again elljay. I checked with the DAS Administrator and it is possible to switch from one money adviser to another very quickly but only if you and both Money Advisers all agree to the transfer. An email would be needed from each party confirming this.
Thank you for the info Kevin. Quite how I'd get my current Money Advisor to agree I'm not sure - given that I'd be removing an income stream - albeit a tiny one in the scheme of things!
I'll have a think about the situation during my payment break.
The other option would be to request your debt payment programme is revoked and then set up a new one with the new money adviser.
The upside of this is that you would no longer have to pay the extra £30pm as these fees cannot be charged on DAS DPPs set up since the end of 2019 (or you add it in to the payment towards your debts instead, therefore reducing the outstanding term).
However, there is a risk that some creditors may be adding interest/charges which they would no longer have to write off if your DAS is revoked. It might be worth checking the balances your creditors say you owe against what is left to pay to them according to your DAS payment programme, to see if there is a significant disparity. Does that make sense?
Thanks Kevin but I think that would be a non-starter - at least until I have a job and a regular income again. I presumably wouldn't be eligible for a new DAS with no income. This was touched upon by the money advisor via email - "you can only apply for a payment holiday if your circumstances are going to improve and you can get back into payment".
I have a few months to consider my options. if I'm going to end up losing my home through her suggested sequestration I'd rather just sell it first myself and look to rent but hopefully it won't come to that.
That's true, I guess I was just being optimistic and assuming that you will get back into work.
Are you going to try again with improved settlement offers in the meantime?