Hi gillian.

You can expect the income and expenditure calculation for the debt arrangement scheme to be very similar to that used for protected trust deeds.

Of course with DAS there is some incentive to make the payment as high as you can comfortably manage to keep the term to a reasonable level.

I take it there would be fees on this as well as I'll be advising him to contact one of the experts on here to deal with it. I reckon that if we were to pay £500 - £700 per month, that would be affordable. How long do you reckon that would take us to clear everything off?

Hi Gillian

Some DAS money advisers charge a fee to the client, others don't.

As a general rule, the public sector advisers (CAB, Council) give a free service. Private sector companies charge a fee to the client - it will vary from company to company.

If you go with a free sector adviser, then you can find out how long the DAS would take simply by dividing the total debt by the amount you can pay. So if the debt is 20,000, and you can pay 500 per month, it would take you 40 months to pay it off.

If your adviser charges a fee, that will change the arithmetic.

In every DAS, whether the adviser is free sector or private sector, there is a fee to the DAS Administrator (2%) and a fee to the Payments Distributor (no more than 8%). However, this comes off the money you pay into the DAS (so your creditors would get at least 90% of your 500).

You don't have to pay in any more. And your creditors can't (legally!) demand that you make up the DAS Administrator and Payment Distributor fees.

I hope that makes sense... It did when I was thinking it, but it looks odd written down! [:D]

Thanks Candlewick. 40 Months seems more than do-able. At least that puts an end point on the debt that he has. At the moment, I think he's only paying the minimum. I'm pretty sure his credit rating's knackered so I don't see the need to prolong this further. As the only financial tie that we have is the mortgage, would I be responsible for any of the payment? Just trying to get a feeling for how skint I'm going to be (again). I'll go through all the figures with him tonight and try to get him to start the ball rolling. I suppose as well if I get a bonus at work, that can always go towards the pot and pay off quicker. Is it like a trust deed where you have to declare any windfalls, bonuses or overtime payments. So many question[:)].

Hi gillian.

Candlewick has provided a great explanation of the free and paid for debt arrangement scheme options. Fees vary between the firms that charge for DAS services which would have an effect on the term of a DAS. If you visit our fees page you'll find a description of the fee model used by each of the companies represented here by Chris, Shona and Kevin.

Your share of any disposable income can remain yours to spend as you wish so things need not be too tight.

As creditors stand to be repaid in full I think you'll find that the rules about windfalls etc are less rigid than would be the case for trust deeds.

We sat down and had a chat about it all and I reckon that now I don't have to pay a trust deed anymore, I can help out but I'll look at it again in 6 months and if there hasn't been 2 of his credit cards paid back then I'll be asking him to go into a DAS. I gave him a list of things to deal with and he's done them. Gas/electric has been looked at and now a bit cheaper, Sky has been put to the basic package, mobiles have been put to minimum required. He also called the 2 card companies that have registered defaults, set up direct debits (finally) and paid some money towards them. When he spoke to Natwest, they told him not to worry about it and that his account was in order. He said that he was concerned as they'd sent a debt collector round. They said it wasn't a debt collector, it was a firm they used to give out letters when they couldn't get a hold of the account holder. Funny, I would have thought a firm called Resolve Recovery was to recover things, not act as a postman.

In terms of the income/expenditure guidelines for a DAS, there is a lot more flexibility available than in a trust deed. In fact, the offer can be whatever you want it to be - there is not even an obligation to pay as much as you can (though there may be less chance of getting the proposals accepted if a lot is being kept back).

Could DAS spell the end for trust deeds? Especially with equity being so difficult to release?

Paul

Hi Paul.

I think there is room for both. There certainly seems to be a political will in Scotland for more people to fully repay their debts via DAS rather than to see some of their debts written off by trust deeds. For example, the AIB consultation at the moment is asking for feedback on an idea that if you could fully repay your debts in eight years or less using the debt arrangement scheme that you will have no access to a trust deed. It's also proposed that income and expenditure are standardised between all debt solutions. Eight years on a really rigid budget doing DAS seems a big ask.

They are also consulting on a minimum dividend of 50p in the £ for a protected trust deed - which would make trust deeds so much less effective than sequestration that they would become very marginalised.

Having said that, this is still only a consultation and I would be surprised if the final outcome wasn't considerably different to the ideas being put forward, or at least significantly watered down.

Even though we've already signed and made payments to our TD (4 payments down!), what do you think of our chances of changing to a DAS (with the same company)?

In hindsight, we believe we'd be happier in a DAS!

It's not that easy I'm afraid pam. You are in a legally-binding agreement so can't just change your mind after the fact. Your trustee could seek his/her discharge and terminate the trust deed based on the fact that you no longer wish to comply, in which case I guess you would be free to take up a DAS DPP. This is all going to be dependent on the attitude of your trustee and of your creditors however.