Making Changes

What happens if circumstances change?

If a debtor's circumstances change and they can no longer afford the agreed payments, or if they want to increase the level of payment, they can apply for a variation to their debt payment programme (DPP).  Debtors should discuss this with their money adviser first.  

What is involved in a Variation?  

An average DPP can last for over eight years, therefore there may be times when people’s circumstances change, within the lifetime of the DPP.  The DAS legislation allows the debtor, creditor or a money adviser acting on behalf of a debtor, to apply to the DAS Administrator to change or vary the approved DPP.   Variation can result in one or more of a number of changes:

• the amount paid to creditors might be increased
• the amount paid to creditors might be reduced
• the length of the DPP might be reduced
• the length of the DPP might be increased
• a new condition might be attached to the DPP

The DAS Administrator will only agree to a variation if one of the following circumstances can be applied:

• where all parties agree that the DPP should be varied
• where there has been a material change of circumstances which may include an increase or decrease in the debtor income
• where the debtor and creditor agree that there is no longer a debt to be repaid
• where a debt due at the date of the agreed DPP was omitted or overlooked
• where a future debt, not quantifiable at the date the DPP was agreed, becomes due
• the debtor required emergency credit to pay for emergency repairs or funeral costs etc
• where the debtor is granted a payment holiday for a period of 6 months.

An application for a variation to a DPP for any other reason will only be considered under exceptional circumstances by the DAS Administrator.   On receipt of the application, the DAS Administrator will consider the request, taking into account the views of the debtor, creditors, money advisers or any other relevant factors and make a decision to approve or reject the variation.  The DAS Administrator will then notify all parties, in writing, of the decision and the reason(s) for this decision.  

What is a payment holiday?

DPPs can sometimes become unmanageable due to a short term 'income shock' where an individual, or someone in their household, experiences a reduction in their disposable income. In these circumstances, a debtor can apply for a six month payment holiday if their disposable income has reduced by 50 per cent or more in the following circumstances:

• a period of unemployment or change in employment
• a period of leave from employment for maternity, paternity, adoption or to care for a dependant
• a period of illness of the debtor
• divorce, dissolution of a civil partnership or separation for the debtor
• death of a person with whom the debtor shared care (financial responsibilities or otherwise)

The payment holiday will interrupt the term of the DPP, therefore the term of the DPP will also be extend by the same period.

How many times can someone apply for a payment holiday?

There is no limit to the number of times a debtor can apply for a payment holiday, provided they meet the necessary criteria.  Before approving the variation, the DAS Administrator will take any previous payment holidays into consideration. 

How do you apply for a variation?

A debtor may apply, in writting,  to the DAS Administrator for a variation of their DPP.   Alternatively a debtor may wish to seek further advice and can approach a DAS approved money adviser to do this, the money adviser would then apply for the variation, on the debtors behalf, using a form 4  .

• What is a form 4?

Preferably the money adviser would do this electronically  using the Debt Arrangement Scheme Hub (DASH).  In addition to this a creditor may also apply for a variation of a DPP, they will also use a form 4 which will preferably be submitted electronically using DASH.