Hi NIC

I believe the answer to your question for DAS is 1/3rd of the way down on this link:

https://www.trust-deed.co.uk/can-a-guarantor-loan-go-into-a-trust-deed.html

NIC,

One of the experts will give you further advice re, your other questions. I'm sure there will be options for you. DAS has done me the world of good but I did not have the scenario you present with.

Welcome to the forum Nicscotland.

The issue with guarantor loans is, and apologies for saying the obvious, the guarantor has promised to pay if you don’t. The lender doesn’t change their view on this because the borrower enters a debt solution.

They will get some payment from your DAS, but if it doesn’t cover the full contractual payment they’re entitled to ask your guarantor to make up the difference.

I’m afraid you can’t leave a debt out of DAS.

We’ve come across some interesting scenarios recently where the guarantor lender will in fact receive the full contractual payment in DAS or a debt management plan (or more). This tends to occur where the guarantor loan is large in comparison to the other debts. It’s tricky to explain here exactly how/when this will be the case, so I’d suggest you get some direct advice to see if it might apply to you.

Thanks for the advice. I want to protect my friend at all costs. I’ll seek specific advice in relation to whether a DAS would suit my circumstances. Maybe an informal debt management plan would be more suitable for me.

cscotland and welcome to the forum.

Having a guarantor loan can be tricky to deal with as if they don’t receive their contractual monthly repayment then they can turn their attention to the other person for payment.

How much debt do you have in total and how much do you owe to Amigo Loans?

Also how much do you think you could afford to pay per month towards a DAS or alternative plan?

This is an all too familiar problem with guarantor loans, but is unfortunately just the nature of the beast. The whole point of guarantor loans is that the person signing as guarantor is agreeing to repay the debt if you cannot. If either party is uncomfortable with that prospect then it is best to steer clear altogether.

Sorry, I know that is not particularly helpful to you at this point and sounds a bit preachy, but I do think it is worth saying nevertheless as it may deter others from using these types of arrangements if they can avoid it.

As you say, perhaps an informal plan might suit better for you.

David

I owe around £21,000 in total. £10,000 of this is Amigo. Im currently paying £1,300 a month and getting nowhere. I could comfortably afford around £600-£700 to a DAS or informal agreement. My contractual payment to Amigo is £395 so realistically I could cover Amigo and still have a couple of hundred left over for other debts.

Hi Nicscotland,

With £21,000 of debt and if it’s costing you £1,300 per month you are doing the right thing looking for options to help you.

Do you own your property or rent? Have a car or any other assets?

If the Amigo loan is £10,000 and the payment of £395 this will be paid back in approx. 25 months. The other £11,000 of debt you have, who is this to i.e. is a loan, credit cards, catalogues etc.?

Also how is your credit rating at the moment? I’m assuming as you used Amigo it’s not that great. Just in case it is good and some of that £11,000 is on high interest credit cards could you balance transfer to extend the repayment terms and then get Amigo paid back and then use the £395 to pay the £11,000.

I know you say you are paying out £1,300 per month but sometimes it can be the robbing Peter to pay Paul scenario. Ideally we would need to go over a budget with you to see how an income and expenditure looked and what was realistic to pay towards a plan taking into consideration the Amigo Loans issue.

Might be an idea to reach out to an Expert for some specific advice based on your circumstances. It’s hard for me to go into specifics over the forum but going over it all with you including the debts and also an income and expenditure could help me present you with some options. A good Expert with experience will be able to look at all options.

As you'll see from my profile, I'm personally also involved in the provision of informal debt management plans.

On that side of our activities, we're hearing from quite a lot of people with guarantor loans. The most common concern is protecting their guarantor, which is perfectly understandable. It can also be a tough thing to achieve in respect of trust deeds or DAS.

It's pretty rare that debt management gets suggested as a good idea in this forum. In most scenarios, the debt arrangement scheme provides more guarantees and more protection.

This (guarantor loans) seems to be one scenario where the greater flexibility of an informal solution can open up some possibilities for some people. Of course all creditors need to be treated fairly, but most (in our experience) are reasonable when presented with a fair plan to get the debt repaid.