Scenario 1


Ruth is a 26 year old married mother of one.

While on 9 months maternity leave from her hairdressing job Ruth relied heavily on credit cards to subsidise her basic maternity pay.  When one card maxed out Ruth would move onto another, choosing cards with long interest free periods, and only ever paying the minimum amount required.  This lead to Ruth owing £10,000 over 3 credit cards.

Ruth planned on being able to up the payments when back in employment, on returning to work part-time Ruth found that half her income was taken up with childcare costs. 

A few months into being back at work Ruth found she was struggling to repay her debts, as the interest free periods had now ended and the interest being added on was almost cancelling out the minimum payments she was making.  With the pressure caused by the amounting interest  Ruth began to ignore the bills and stop paying them altogether. 

After months of ignoring correspondence from her creditors Ruth decided to seek advice from her local Citizen’s Advice Bureau.  She talked through her situation with a money advisor and discussed various options to ease her debt problem. 

Ruth’s £10,000 debt would require £500 per month minimum payments, and having gone through her monthly income and expenditure with the money advisor this was deemed impossible.  Ruth and the money adviser calculated that she had £300 per month surplus income was available for paying to her debt, however if Ruth paid this figure, it would barely cover interest charges and only continue to accrue more fees.

Discussions with Ruth lead the money advisor to recommend Ruth enter DAS.   A debt payment programme (DPP) in DAS allows a debtor time to pay their debts without fear of diligence from creditors.  A key point of the scheme is that interest, fees and charges to the debt are frozen at the point of approval, allowing payments made in the scheme go directly to the capital owed.

The money advisor drew up Ruth’s DPP proposal based on her £300 monthly surplus income with a total debt figure of £10769.50.  Ruth’s DPP would take her 36 monthly instalments of just under £300 to complete.  These repayment terms were offered to Ruth’s 3 creditors as required in DAS, all creditors consented to the DPP and Ruth commenced payments the following month.

Ruth is set to complete her DPP in 3 years time.


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