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Living on a debt solution

Can you add more debts onto a debt arrangement scheme (DAS)?

Posted 21 August 2015

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What should you do if you realise you forgot to include a debt onto your debt arrangement scheme?

A debt arrangement scheme (DAS) is a way to for Scottish residents to deal with problem debt. It rolls all of your unsecured debt repayments into one and helps to make your monthly repayments more affordable. It also helps you manage your budget more easily because there’s only one payment coming out per month, instead of lots of smaller ones that might all be due at different times, making keeping track quite tricky.

And if you happen to miss one of those payments, it could land you in a whole heap of trouble. Well, with your lenders at least. This is important because missing a payment, paying late or only paying part of the amount that’s due, can cause defaults to show up on your credit file.

Defaults on your credit file can make it more difficult for you in the future, and not just for taking out more credit. It can also affect the kind of job you get, whether landlords will let to you or not and can even affect your chances of switching utilities.

So, you can see that when a DAS is used and maintained properly, it’s a really useful tool. But what if you forget to include a debt to your debt arrangement scheme, or acquire new debts whilst on it? Will you be able to add these to your debt plan? Find out in our guide.  

Adding a debt to a debt arrangement scheme

First let’s make something clear. If you are on a DAS, you should not be taking out more credit. So the debts we’re referring to here are ones that you had at the time your DAS was arranged, but that you forgot you had. Now that’s cleared up, let’s move on.

As soon as you realise that you have forgotten to include a debt to your debt payment programme, get in touch with your advisor. They will be able to apply for a variation to your plan, which, put simply, means changing the terms of your original agreement. As part of this, your advisor will get in touch with each of your lenders and let them know about the additional debt that you want to add to the DAS.   

If your lenders have no objections, then the debt will be included onto your plan. All interest rates and charges will remain frozen as well. To factor this additional debt into your payment programme, you may have to increase what you pay each month, but only if you’re able to, or you may be asked to extend the length of your payment plan. Usually, the maximum length for most DAS is 10 years, so any amount you have to repay, along with any added interest, really needs be realistically payable in this amount of time, or it’s likely that your lenders will reject the proposal.   

If you acquire new debts once you’re on a debt arrangement scheme, you may be breaking the terms you agreed to when you signed up to the scheme. You won’t be able to add these to your payment programme and could even find your DAS revoked, which means cancelled, because of this.

What about if you have mortgage arrears?  

Although a debt arrangement scheme is designed for unsecured debts, it is sometimes possible to add mortgage arrears onto your debt payment programme. Your advisor will have to run this by your mortgage lender to see whether they would accept this, as there are some cases where they’ve said no.

If they agree, you simply continue to make your monthly mortgage payments, alongside what you pay towards your debt arrangement scheme.

If you’re not able to add these arrears onto your plan, your advisor will be able to talk with you about what the alternative solutions are, and if they are appropriate for you or not. They may be able to help you get in contact with your mortgage lender or assist you in trying to set up a repayment plan – so don’t hesitate to ask!

We hope that this information has helped you, however, if you feel like you need to talk to someone, we’re always here. Simply choose how you’d prefer to get in touch from the options on the left-hand side of the page and click to get started. 

 

 

by Shelley Bowers

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.