What happens if you can't keep up your DAS payments?

A Debt Arrangement Scheme (DAS) is designed to help you repay your debts through a series of affordable monthly payments, with interest and charges frozen for the duration of your Debt Payment Programme (DPP). But what happens if your financial situation changes during the period of the DAS and you can no longer afford to keep up?

The good news is that a DAS has flexibility built into it. If your circumstances change, there are steps you can take to adjust your monthly payment amount, but it's essential that you act quickly rather than missing payments and hoping for the best.

What happens if you miss a DAS payment?

If you miss a payment on your Debt Payment Programme, it won't necessarily result in further action being taken immediately. However, if you continue to miss payments without taking action, your DPP may eventually be cancelled by the Accountant in Bankruptcy (AiB).

Cancellation of your Debt Payment Programme comes with significant consequences:

• You lose creditor protection. One of the key benefits of a DAS is that your creditors cannot contact you or take legal action against you while your DPP is in place. If it's cancelled due to missed payments, then that protection disappears and your creditors are free to pursue you for the outstanding debts you still owe them.
• Interest and charges can start again. While your DAS is in place, interest and fees on your debts are frozen. This allows you to pay down the balance of your debts much quicker. If the DAS is cancelled, however, creditors may backdate interest and charges to the original amounts, which could leave you owing significantly more than you were paying through the DAS.
• Legal action becomes possible. Without the protection of a DAS, creditors can take steps to recover their debts through the courts, which could include wage arrestment, bank arrestment, or other enforcement action.

In short, the cancellation of your DAS due to missed payments puts you back to square one. In many cases it can even put you in a worse position than before you entered the DAS, because of backdated interest and the loss of legal protection.

Can you change your DAS payments?

Yes it is possible to change your monthly DAS amounts and this is the route you should take if your circumstances or ability to pay your regular amount change.

If your income drops, your essential expenses increase, or something else affects your ability to pay, you can apply to vary your Debt Payment Programme. This is done through your DAS Approved Advisor, who will review your updated financial situation and submit a variation request to the AiB.

A variation can include:

• Reducing your monthly payment to reflect your new level of affordable disposable income.
• Extending the duration of your DPP so that your debts are still repaid in full, but over a longer period with lower monthly payments.
• A temporary payment break if your change of circumstances is expected to be short-term, such as a temporary period of unemployment or illness.

Creditors will be notified of the proposed variation. In most cases, if your revised payment is based on a genuine reassessment of your income and expenditure, the variation will be approved.

What should you do if you're struggling to keep up with the payments on your DAS?

• Contact your DAS Approved Advisor as a matter of urgency. This is the single most important step you can take if you are having problems with your DAS. Your advisor can review your situation, update your income and expenditure assessment, and submit a variation request on your behalf. The sooner you do this, the more likely it is that your DPP can be adjusted before any payments are missed.
• Don't ignore the problem. It's natural to feel anxious or embarrassed if you're struggling to keep up with payments, but avoiding the issue typically only makes the problem much worse. Rest assured, your advisor has seen this situation many times before and is there to help you find a solution, not to judge. You are not the first to miss a payment towards your DAS and you won’t be the last.
• Gather your evidence. If your income has changed, have documentation such as payslips, a letter from your employer, benefit award letters, or anything else that demonstrates the change ready.

What if a DAS is no longer right for you?

In some cases, a person's circumstances change so significantly that a DAS is no longer the most appropriate debt solution. For example, if your income has dropped to the point where you can't make any meaningful contribution towards your debts, continuing with a DAS, even one with lowered monthly contribution levels, may not be realistic.

If this happens, your advisor can discuss alternative options with you:

• A Trust Deed may be suitable if you have unsecured debts of £5,000 or more and can still afford some level of monthly payment. Unlike a DAS, a Trust Deed can often result in a portion of your debt being written off.
• Sequestration (bankruptcy) may be appropriate if your financial situation is particularly severe and there's no realistic prospect of repaying your debts. While this is a more serious step, it can provide a path to a fresh start when debt problems have become insurmountable.
• The Minimal Asset Process (MAP) is a simplified route into sequestration for people on very low incomes with few assets.

Moving from one debt solution to another isn't a failure. It simply means your circumstances have changed and a different approach is now more appropriate. The important thing is that you're taking action rather than letting the situation spiral.

How can Scotland Debt Solutions help?

We help people across Scotland who are struggling with debt, whether they're considering a DAS for the first time or they're already in one and finding it difficult to keep up. We can review your current situation, explain all the options available to you, and help you find the right way forward.

If you're worried about falling behind on your DAS payments, please don't wait until things get worse. Call our confidential advice line on 0141 292 6587, complete our free debt report, or contact us via WhatsApp.