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This is the place to ask questions about DAS
By Bethan29
I am struggling with about £18,000 of debt at the moment and am trying to work out my options. My husband and I are homeowners with some equity in our property which we cannot release because we cannot get a mortgage. Someone has suggested to me that I would be better off with a DAS as I do not have to release equity from my house but I am not sure. Can you offer any advice?
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By James Falla
Hi Bethan29 and welcome

If you live in Scotland there are two powerful debt solutions you can consider. The first is a Trust Deed and the second is a Debt Arrangement Scheme (DAS). Trust Deeds give the advantage of only lasting for 3 years. Then any unpaid debt is written off. However there is the significant disadvantage that you have to release 100% of the equity from your property and pay it into the Trust Deed. On the other hand, with the DAS you do not have to release any home equity, but you have to pay all of your debt back. This means that the agreement will last much longer than a Trust Deed.

Ultimately the solution you chose will really boil down to whether you would consider releasing the equity from your property and indeed if this would even be possible without having to sell.
By Bethan29
Thanks James

Well the equity in the house is c£10k and as I said we are unable to get a mortgage to release this. If we went down the Trust Deed route I am not sure how we would get our hands on this money any other way. Even if we could, this would mean that we would be able to pay back all of our debt so I think the question would be what would be the point of the Trust Deed. I think it is better for us to chose the DAS and pay the debt that way even if it takes a bit longer.....
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By Geraldine
Hi there Bethan29

Are the debts you are struggling with in your name alone or does the total include some debts in your husband's name? I ask because if they are only your debts, then only you would need to use a Trust Deed or a DAS. That would mean that you would only have to release £5k of equity from the property (half the equity). As such you could pay a Trust Deed for 3 years and then borrow the £5k from your husband (or someone else) to cover the equity. This could result in paying a smaller amount overall and resolving the debts quicker than if you chose the DAS route.
By Bethan29
Hello Geraldine. The debts are in both our names. I owe about £8000 and my husband owes about £10,000. We have a joint overdraft as well of about £750. I assume that this means that we would have to release 100% of our equity if we do a Trust Deed? As such we will use the DAS route. What is the best way to start this process?
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By Hayden
Hi Bethan29

Yes, if you both do a Trust Deed, you would need to release 100% of the equity in your property. If this is not possible then the DAS option might be a better way forward. However another option could be for one of you to do a Trust Deed (perhaps your husband as he has the higher debt) and the other to use the DAS. That way you only have to realise 50% of the home equity which might be more feasable.

In terms of how to go about getting a DAS, have a look at the BeatMyDebt.com guide to starting a DAS. However I suggest that you have a chat to one of the BeatMyDebt.com experts an talk the options through with them.
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By Amy Jellings
Hi Bethan29.

The property valuations used for trust deeds tend to come in lower than people expect. They're set at a pretty "realistic" level.

There are plenty of trust deed firms that will happily value your property in advance so that you know whether equity will be an issue.

Plenty of these firms will also offer DAS as an option as well, so if the equity does exist the DAS option remains available.

Do you know how much you can afford towards your debts each month? That's a pretty important factor in assessing whether the debt arrangement scheme will be viable.
By Bethan29
Thanks for the link about starting the DAS Hayden. This has been very useful. In terms of the amount that we can pay back each month Amy, it is about £300 a month. I undestand that it will take us about 5 years to repay our debt at this rate using a DAS which is longer than the Trust Deed route. However it does avoid the home equity issue.

On previous advice we did get a recent quick sale valuation and that brought the equity down to £10k. I initially thought it would be about £25k..... On refection we now feel that DAS will be the way forward as we wi not have to touch this and hopefully house prices will start to rise again so in the long run this will be an advantage.
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By James Falla
Hi Bethan29

From what you have said, I would agree that a DAS sounds like the right solution for you and your husband. It will mean that you will not have to touch your home equity thus protecting it for the future. And as you say, if you can pay c£300 a month overall you should be debt free in the 5 year period. If you need any help with contacting an appropriate IP or money advisor please let us know.