It will affect your credit rating
A DAS will affect your credit rating. Unfortunately, there’s no way to avoid this, although it’s likely your credit record is already being affected if you’ve missed payments on your debts. You may also struggle to source credit during the period of your DAS and there are restrictions on obtaining credit, as well.
Your lenders can also choose not to approve your DAS. However, if they do, your DPP will be automatically referred to the Scottish Government for a ‘Fair and Reasonable’ test. All this means is that the Scottish Government will look at the DPP and make an objective assessment of the DPP and determine whether to over-ride the objections(s) received.
Only unsecured debts are covered
Only unsecured debts are covered by a DAS, so any loans secured on your home or through hire purchase agreements aren’t covered and you would continue to pay these.
Don’t miss a payment
If you fail to make a payment under your DAS agreement without first applying for a variation (via your Money Advisor), you may find the DAS could be revoked and you won’t then be able to be discharged from your debts. It’s sometimes possible to arrange payment holidays, or to extend the timeframe of your DAS and you should contact your Continuing Money Advisor in the first instance to discuss such matters.
Debt Arrangement Scheme FAQs
What’s the difference between a DAS and a Trust Deed?
You must have at least £5,000 of debt for a Trust deed, DAS has no minimum debt level.
You’ll pay a DAS until all debts are clear, whereas in a Trust Deed, you can be granted debt forgiveness. Any remaining debt is written off after the DAS is completed.
What debts are included?
You can include all unsecured debts along with rent/arrears.
Is my owned home affected?
No, your home isn’t included in a DAS. If you have equity in your home, it may be worth considering alternative methods of raising funds against your property to reduce your debts.