The effect of approval of a DPP on the client
A client with an approved DPP is subject to the standard conditions and any discretionary conditions imposed by the DAS administrator.
When a DPP is approved, any existing arrestment against earnings or property is recalled. The DAS administrator (or continuing money adviser (see below)) sends a notice of recall to each employer or party with possession of or property arrested. Earnings or property in the hands of a third party (arrestee) is released for the client’s use.
Continuing money advisers
A money adviser is classed as a continuing money adviser where they provide ongoing advice to a debtor and carry out administrative functions – eg, during a DPP and insolvency practitioners who do DAS work.
Where property is attached and the client has already been notified of the auction date (before the date of making a moratorium application, or the date of application for the DPP), the removal and sale of the client’s property may still proceed.
A debt adviser must include details of an arrestment order on the DPP application form. If the client has a conjoined arrestment order, the DAS administrator notifies the clerk of court. In effect, this recalls the order. Therefore, if a creditor is receiving any monies as a result of an order, these payments stop as the debt should thereafter be paid through the DPP.
If a debt has been omitted from the DPP due to oversight, it may be possible to include it through a variation to the DPP (see here).1AiB Debt arrangement Scheme Guidance for debt advisers 7.6 A creditor can apply to vary a DPP, to adjust any debt balance due to them which is incorrect. However, for cases approved from 4 November 2019, the creditor must apply to make the change no later than 120 days from the date of approval. Applications can be made after 120 days, but the creditor must show good cause as to why the application could not have been made earlier. Clients must not receive further credit while they have a DPP unless:2Reg 33 DAS(S) Regs •credit approved by a variation of a DPP;
•credit up to a maximum of £2,000, with certain restrictions;
•further credit given as part of a cyclical loan agreement which was already in operation when the DPP was approved, where the payment to the DPP made by the client does not vary because this credit has been given;
•trade credit incurred by the client in the ordinary course of business. If the client applies for this credit, they must give the creditor written notification of their DPP;
•credit for emergency repairs. If the client applies for this credit, they must give the creditor written notification of their DPP;
•credit for reasonable funeral expenses for an immediate family member. If the client applies for this credit, they must give the creditor written notification of their DPP.
If a creditor gives credit to a client with a DPP other than for reasons above, the creditor cannot take action to recover this debt, neither can they serve a charge for payment or commence any diligence to enforce payment or petition for the sequestration of the client’s estate, until after the DPP is completed or revoked.
Clients in a DPP are not permitted, under the standard conditions, to apply for or obtain credit other than in specific circumstances, as set out above. Therefore, if a client obtains credit in any other circumstances, or without informing the creditor (where required) that they are currently in a DPP, this may be grounds for the DPP to be revoked.
Creditors must not try to persuade a client to withdraw from a DPP or to make additional payments in respect of a debt included in the programme. If the client receives reminder letters or demands for payment which may have been electronically generated by the creditor’s administration system, you should inform the DAS administrator. Debt advisers should advise clients to expect an annual default statements from creditors, as this is a requirement under the Consumer Credit Act 1974.