If you are in a Debt Arrangement Scheme and struggling to make a payment because of a drop in income due to coronavirus, speak to your money adviser and they can arrange a payment break for you. If, for whatever reason, you cannot access your money adviser Citizens Advice Scotland has developed a helpful guide which outlines the steps you can take to request a payment break yourself.
This guidance is aimed at people who are in a Debt Payment Programme (DPP) under the Debt Arrangement Scheme (DAS).
If you are experiencing difficulty in maintaining payments due to Covid 19 then please do not worry. There are a number of things that can be done to help you and this guidance will talk you through it.
In the first instance, if you think that you are going to miss your payment or have to cancel it due to Covid 19 please try and contact your original money adviser. They can apply for a short term payment break on your behalf that can give you up to 2 months’ breathing space.
If you find that you cannot access your adviser either because they are unwell or you cannot get through to them, you can make an individual application for a longer payment break of up to 6 months from the DAS Administrator (Accountant in Bankruptcy). This process requires a little more work but here is what you need to do:
First, you must match the criteria to be eligible for a longer payment break. These are:
1. Your disposable income (i.e. the money you are currently paying to your debt payment plan) has reduced by more than 50%
2. That you have been affected by a change in circumstances. The most likely that relate to Covid 19 would be:
a) The onset of unemployment or change in employment, this would include being furloughed (i.e. sent home from work under the government scheme to pay employees 80% of their wages during Covid 19) or changes to wages
b) Leave from employment for maternity, paternity, adoption or to care for a dependant.
c) A period of illness
d) Death of someone that you share care with includes caring and financial responsibilities
Second, here’s how to apply:
Step 1. Check your payments
Your bank statement or DAS paperwork should tell you what payments you are currently making to your debt payment plan.
Step 2. Work out how much your income has reduced
Take away the income you are now getting from the income you had before things changed.
This will give you the shortfall in your overall income.
Step 3. Work out how much your disposable income has decreased
Divide the shortfall you worked out in Step 2 from the payment you make to your DPP (step 1) and multiply by 100 to get a percentage.
If the answer is more than 50% and you have had one of the changes of circumstances mentioned above (i.e. unemployment, leave to care, a period of illness, death of someone you share care with), then you qualify for a payment break of up to 6 months.
Step 1: Current payment is £300 per month
Step 2: Was getting £2,000 per month but now getting £1,800.
£2,000 - £1,800 = £200 difference in income
Step 3: Use a calculator to divide the difference in income by your payment and then multiply by 100
I.e. £200/£300 x 100 = 66%
In this case the decrease in income is greater than 50% so you will qualify for a payment holiday if you have had a change in circumstances (I.e. illness, change in work, leave to look after a dependent, death of someone you shared caring or financial responsibilities with).
Step 4. Apply in writing to the Accountant in Bankruptcy
You should apply in writing, via post or email to email@example.com
You could say:
I am writing to request a payment break of up to 6 months under regulation 37(h) of the DAS regulations. I have had a change of circumstances due to Covid 19 (delete as appropriate):
- I am experiencing a period of illness.
- I am caring for a dependent who is ill
- I have lost my employment
- My employment has changed
- Someone I share caring and financial responsibilities with has died
My disposable income has also reduced by more than 50% and therefore I need a payment break.
Don’t forget to add your DAS reference number, name and contact details
Send copies of any paperwork confirming your changes in income for example letters from employer, benefits agency, council, wage slip, or bank statement. DO NOT under any circumstances send the originals. Preferably try and do everything by email rather than post. Note if or when things return to normal, then you may be asked for evidence of the changes therefore it is important to keep records of your bank and any other payment related statements.
Any request for a payment break has to be agreed by your creditors. They have 3 weeks to approve the break. If they don’t agree it the DAS Administrator will look at the decision and decide whether it is fair and reasonable. Once this process has been completed the DAS administrator will contact you and let you know the outcome.
More information on what the AiB is doing for DAS clients during the pandemic is here https://www.aib.gov.uk/aib-covid-19-business-continuity while specific information on DAS with regard payments and accessing money advisers can be found here https://www.aib.gov.uk/das-covid-19-emergency-information