Hi Nej and welcome to the forum.

Yes absolutely. We work out your monthly payment by going over a very thorough income and expenditure with you to see what you can afford to pay per month. The monthly payment is always based on affordability.

Before you sign any paperwork everything is confirmed from what your monthly payment will be and how any assets you might have are dealt with.

How much debt do you have?

Hi David,

Thanks for your welcome and quick reply. I have around £12k in debt with no assets. I live in rented accommodation and have a old small valued car. I'm torn between a DAS and a trust deed st the moment. I'm concerned that if I have to leave my current accommodation a trust deed might stop me renting anywhere else.

Regards
Nej

Hi Nej,

The £12,000 of debt that you have, who do you owe this to? Reason I ask is that different lenders have different acceptance criteria for Trust Deeds.

It’s a common question about renting a property whilst in a Trust Deed. In 17 years of helping clients I can’t recall a time whereby someone wasn’t able to secure a tenancy on a property. Nowadays a lot of people are financially struggling and have debt and a poor credit rating.

If you were to enter into a DAS this will also have a big impact on your credit rating as your not making your contractual monthly repayments.

The first starting point should be reaching out to an expert to go over a thorough income and expenditure to see what you can reasonably afford to pay per month. Let’s say that’s £150 per month then on a DAS that would be approx 6 years and 6 months compared to a Trust Deed or 4 years.

Apologies I should have said that all of the debt is on credit cards. Thanks for the tenancy information.

Who are the credit card companies you owe the money to?

Nej

There are a number of options to deal with your debt such as a debt payment programme under the Debt Arrangement Scheme , Protected Trust Deed and Sequestration.

In assessing your affordability, we are required to work out income less expenditure and taking into account your household circumstances.

All three options will have a detrimental effect on your credit worthiness however you need to balance up the pros and cons of each option.

DAS is a fantastic debt solution and allows you to repay your debt over a period of time. Without knowing your disposable income, its difficult to work out length of plan. However as most of your debt is based on credit card, a DAS will simply freeze the interest and charges and allow you to repay the debt back off in full - consider it like a balance transfer.

It may be that the length of the plan under a DAS is less than a Trust Deed. For example, if you can afford a contribution of £250, the length of the plan under a DAS would be 48 months. That may be the best option.

However, if the length of plan exceeded that, you may wish to consider statutory debt relief solutions such as a trust deed or sequestration. Both of which would involve a 4 year payment plan.

It would be good if you could provide further information.