Welcome to the forum fqviii.

Car finance providers often have contractual clauses about insolvency (trust deeds or bankruptcy) but I've not heard much in this respect about the debt arrangement scheme (which is not insolvency).

Even where these insolvency clauses exist, most finance providers are happy for people to keep the vehicles so long as payment continues to be made (though there are some few exceptions).

With regard to this particular provider, the only answer I think you can reply upon is the answer that they give you. I appreciate this must be frustrating if you're struggling to get a reliable answer from them currently.

How much do you expect you'd be able to pay into DAS? This would be the amount of income you have left after covering your bills and other household expenses?

How much is your car finance payment?

How much debt do you have in total?

The answers to these questions will help us to provide some thoughts on the second part of your questions.

I very much doubt you will experience the issues you are worried about here, though of course I couldnt give any guarantees. As TDA says, even in insolvencies it is often possible to continue to pay car finance a and retain a vehicle, and DAS is not an insolvency procedure. I doubt that the lender would even realise that you have entered into a DAS payment programme to be honest.

In terms of whether the car payment would cause any problems in getting your DAS proposals approved, that will undoubtedly most likely sepend upon what you can offer and how long the debts will take to repay as a result. As long as the timescale is reasonanle then I doubt your car payment would scupper your chances.

Hi fqviii and welcome to the forum.

Sorry to hear that you have found yourself unemployed and especially at this time of year.

Hopefully this is a short term problem and you find suitable employment soon. It’s good that you have the income protection policy to help a little.

As TDA and Kevin has has advised car finance providers have these types of clauses in their agreements and ultimately you will need to go on what they advise you.

What I can say is that over the last 17 years of doing debt advice and having dealt with over 1000+ cases it’s rare for a finance company to take the vehicle back. If they do that they will lose money as the level of finance is normally more than the cars value.

I’ve probably had 4-5 clients in that time that the finance provider has taken the car back and in these cases some clients have been behind with the finance so it’s the ideal opportunity for them to take the car. Problematic payers. As long as payments are maintained then normally there isn’t an issue.

TDA has asked some important questions about the finance payment, total debt level and also do you own a property? If you could let us know this we can give you some further advice.

Try to remain positive, there are solutions to help you deal with the debts, it’s just working out which one best suits your circumstances.

Hi fgviii,

Selling your house I would view as an absolute last resort if that’s not what you want to do. If you are happy in your house and see it as the long term house for life we want to try and ensure you keep it.

How much equity do you think you have in the house? If you have enough equity to clear the 63k of debt you could consider a sale and effectively start again, no debt, building a deposit and buying another house. As I said though, this might be your last report.

Is a payment of £1,050 per month to a DAS based on you returning to work at a certain salary level? How likely is it that you will find a job at this level to pay the payment and also afford to pay all your living costs along with a PCP of £850?

The PCP payment of £850 is on the high end of what we normally deal with and could be a factor in the lenders accepting / rejecting a DAS. Having said that, if you do enter a DAS and pay it back in 5 years then it might be something that is accepted. The average length of time for a DAS is around 7 years so it’s under that.

If the vehicle is an issue, an option could be returning the vehicle to the finance company and in the meantime before your credit rating becomes too bad with any missed payments source a cheaper vehicle with a more affordable payment per month.

Are you now at the point you are going to miss the contractual monthly payments to the debts?

Hi David, thanks for getting back. The £1050 DAS payment is based on my current circumstances. I have an income protection policy but it is only 65% of my previous salary.

Handing back the car is my preferred option, but with the figure the car buyer will give me it will leave me with another 17k loan which would need be secured on the mortgage. It would then prevent me from finding a much cheaper place unless I sold and rented, but that would all need to happen fairly quickly as late payments will start happening from the start of the month so not sure if the timescales are realistic.

I also dont want to go down the DAS route if it would end up with the car potentially being taken back off me, landing me with the 17k (plus whatever extra they decide to charge) with absolutely no way to pay it. I'm hoping to secure a job within 6 months but obviously 'hoping' doesn't butter my lenders bread in the mean time.

Hi,

Can I check, how much equity do you think you have in your property?

You could allow the car to go back and the shortfall could go as another debt within your DAS plan. To do this you would need to speak with Alphera and then probably miss some payments. They would recover the vehicle, sell it then send you the balance to pay which could be entered into the DAS.

As I said you could look at another car finance deal at the moment and that way you have a cheaper car if/when the more expensive one goes back.

If your debts are £63,000 and let’s say that the car goes back and you owe £17,000 it would take it to £80,000. On a DAS you could pay this back over an extended period of time. It might be an idea to set up a DAS over slightly longer period and if/when you return to work and can afford to pay more, increase your payments and reduce the timescale.

In terms of securing a loan against your house I’d urge caution about this. You would be taking unsecured debts and turning them into secured debt. You’d also need to pay attention to how much interest you would pay back for borrowing the money.

A DAS can be viewed as an interest free loan if you set this up via a non-fee charging organisation.

It’s probably a good idea to reach out to an Expert for some specific advice based on your circumstances. That way we could work through a thorough income and expenditure with you, go over your debts, the equity in your house and then give you specific tailored advice on your options. Balance up all the pros and cons.

Do you have debt with the bank you have your current account with? If so I’d recommend opening up a new bank account with a bank you do not have any debt with.

Might be worth mentioning that from Monday ALL DAS advisers will be non-fee charging organisations for the people who are going into DAS.

Absolutely candlewick.

Updated DAS page and draft forum announcement ready to go!

quote:

---

Originally posted by TDA (Debt Adviser)
[br]Absolutely candlewick.

Updated DAS page and draft forum announcement ready to go!

---

Thanks TDA! [:)]

Hi, just a personal update on my current circumstances. I spoke on the phone and met with David Tannock in December and we agreed a proposal to put forward to my creditors which involved keeping the vehicle PCP. This was agreed by all the creditors and my DAS was approved.

If anyone is reading through the forums and is put off pursuing a DAS because you dont just have x amount in loans etc and you need to keep certain financial commitments in order to do your job (such as PCP), its certainly worth trying this route, and remember ultimately, the banks are getting their money back anyway.

Thanks again.

It's great to hear that everything has worked out for you fqviii.

DAS is an excellent solution for a lot of people.

Hi fqviii,

Glad to have been able to help you deal with your debts in a positive way and via the Debt Arrangement Scheme.

I’ve been doing this a long time and your case was the first with a PCP payment at that level but the lenders were happy to accept it and ultimately like you said are going to get all of their money back.

Sometimes people think that there isn’t any solutions available to help them with their debts but actually it’s very rare that there isn’t an option. It’s just working through things to see what best suits a client.

Here’s to a straight forward DAS for you.