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Accountant in Bankruptcy

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Publication - Notes for Guidance

Notes for Guidance - Creditors - Debt Arrangement Scheme

First published
6 August 2024
Last updated
6 August 2024 - see all updates
Topic
Debt Arrangement Scheme

This guidance is aimed at creditors and describes their involvement and processes associated with the Debt Arrangement Scheme 

The DAS Administrator will automatically revoke a DPP if the client:

  • is made bankrupt
  • signs a trust deed which becomes protected
  • on the death of the client

The client’s details will be removed from the DAS Register.

There are several grounds where the client, a money adviser acting on behalf of the client or you as a creditor can apply to revoke a DPP.

These grounds include where:

  • a client has failed to satisfy the conditions of the DPP
  • the client has missed the equivalent of payments due over a two monthly period and a further payment is due
  • the client has made an untrue statement when applying for the DPP or a variation
  • the parties involved in a joint DPP have separated

An application for revocation must be made via eDEN or on a statutory Form 5. Alternatively, the DAS Administrator can initiate the action.

The DAS Administrator will notify all parties if they intend to revoke the DPP, giving them a period of four weeks in which to provide any comments before making the decision.

The DAS Administrator will consider the following factors when considering whether to revoke the DPP:

  • whether the application complies with the grounds listed above
  • the nature of the failure or untrue statement
  • any factors that indicate whether or not the DPP will be successful
  • any other factors for consideration

Parties informed of revocation proposal

If the DAS Administrator proposes to revoke the DPP following the receipt of an application, the DAS Administrator will inform the client, each creditor in the programme and the continuing money adviser or money adviser who acts on behalf of the client. 

The DAS Administrator will give all parties to the DPP four weeks to provide information or reasons why the DPP should or should not be revoked.

Determination of a revocation

Only the DAS Administrator can make a determination on an application for revocation. 

When deciding on an application for revocation, the DAS Administrator will consider:

  • any statement made by or on behalf of the client
  • the nature of any failure or untrue statement
  • any factor that may indicate whether or not the programme will be successful
  • any representations made by the client or creditors
  • any other factor that the DAS Administrator considers appropriate

The DAS Administrator will notify you of the outcome of the revocation proposal. 

Effect of the decision

Rejection of revocation proposal

If the application for revocation is rejected, the DPP will continue to run as agreed, and all protections will remain in place.

Approval of revocation proposal

If the application for revocation is approved, the client details will be removed from the DAS register.

At this time you will be able to consider whether further enforcement action is required, or appropriate, to recover the debts owed to you. The client would be required to pay the debts under the terms and conditions under which the debt was originally provided.

However, you cannot take any enforcement action against the client until 14 days have elapsed from the date the DPP was revoked. 

You must also continue to freeze interest, fees, and charges to the debt until the 14 days have elapsed.

Joint DPP revocation

Where a joint DPP is revoked, or the revocation is due to the client being deceased during the DPP, you cannot act for a period of six weeks and must continue to freeze all interest and charges for a period of 21 days.

Review 

If the client, the money adviser, or a creditor requests a review of the DAS Administrator’s decision to revoke the DPP, you must wait a further 28 days before taking enforcement action, or adding interest, fees, and charges.

If the request for review is upheld, and the decision to revoke the DPP is overturned, the DPP will continue as agreed, and all protections will remain in place.

First published
Tuesday, 6 August 2024
Last updated
Tuesday, 6 August 2024 -
All updates

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