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Do you know what would happen if your employment changed during a DAS? Read on to find out more.
his week we’re looking at the debt solutions that are available to Scottish residents. So with that in mind, let’s get into the nitty gritty of Debt Arrangement Schemes (DAS), in particular what would happen if your employment changed whilst you were on one of these schemes. But firstly, a reminder of how these solutions work if you’re unsure.
A DAS is a solution that allows people with unmanageable unsecured debt to pay the money back with affordable monthly payments through a Debt Payment Programme.
When you start a DAS all interest and charges on the debts included in it are frozen and your DPP is legally binding so your creditors can’t chase you or take you to court. You would pay everything back that you owe and your DAS would last as long as it took to do this.
What if my income or job changes?
On a DAS, what you pay each month towards your debts is calculated by looking at both your income but also your essential spending and living costs. You may well be wondering what happens if your job changes and there’s a change in the amount of money you’re bringing in.
A pay reduction
If there’s a big change in your life, and you can see that your wages will be reduced or your living costs will rise, it’s very important you let your money advisor know about this as soon as you do. If the change is significant, for instance if you go on maternity leave or you’re made redundant, it’s sometimes possible to take a payment holiday for six months. You wouldn’t be expected to pay anything into the DAS for those six months and, after that time, your payments would resume as normal. Your DAS would last longer than you originally expected, but it might give you the financial breathing space that you need.
If you think the change is going to be long-term, and you might not be able to pay the originally agreed DAS payments again, it’s sometimes possible to apply for something called a variation. This is where the payments are lowered on the DAS altogether. You’ll need to show that you’re paying everything you can towards your debts, so you would have to provide evidence of the change in your life, and your creditors would have to agree to this variation before it went ahead. Your money advisor would look at your income and expenditure to make sure that the payments were fair to everyone involved.
A pay rise
Similarly, you might see your income rise due to a change in employment. You should discuss this with your money advisor who will look over your situation and, if there’s an actual rise in the amount of disposable income you have each month (once living expenses have been taken account of), then a variation would take place and you’d pay more each month.
So, while it’s important that all efforts are made to maintain the agreed payment at the start of a DAS, they can last for a number of years and, of course, over that period your circumstances may well change. You are able to vary what you pay into DAS, as long you can show evidence there has been a change in your circumstances and your money advisor and lenders agree to the change. For more info on DAS DPPs, or any other debt solution, make sure you check out the rest of the site and give one our experts a call, they’ll answer any questions you have.
by Christine WalshBack to blog home