Notes for Guidance - Payments distributor - Debt Arrangement Scheme

Upon approval of a new DPP, you will be notified by the DAS Administrator or the continuing money adviser of your appointment.

This notification will include:

• the DAS case reference number
• money adviser’s details
• the name of the client or clients where it is a joint DPP;
• the client contact details
• details of how the client wishes to make payment
• the contact details for the client’s employer where they have agreed to pay using this method or where it has been imposed on the client under a discretionary condition

As soon as possible (within ten working days), you will contact the client to arrange receipt of payments.

You must also have systems in place to ensure the client makes the first payment to their programme within 42 days of their programme being approved.

Once payment arrangements have been agreed, you should update the agreed start payment date on eDEN. 

If you are unable to make the payment arrangements in that period, you must alert the DAS Administrator or the continuing money adviser via eDEN and give reasons for the delay a note of the agreed start date.

Changes to the client’s name, contact details, method of payment will be notified to you on eDEN.

You will comply with any reasonable directions given about collection and distribution of funds by or on behalf of the client.

If unable to do so, you must advise the DAS Administrator or the continuing money via eDEN within five working days. 

You must receive the instalments as agreed from the client. Where the DPP is in joint names the clients should make a single payment totalling their agreed monthly payment. You will send a receipt to the client on request.

Where the agreed method of payment is directly from an employer, you should receive the regular payments as long as the client remains in their employment and has not agreed an alternative method of payment.

If the employer fails without good cause to make a payment, the employer will be liable to pay the amount that should have been paid. You should contact the employer and inform the DAS Administrator or the continuing money adviser through eDEN the employer did not make the payment. 

You will distribute the payments to creditors pro-rata as agreed in the programme.

You will also receive the following information through eDEN:

• creditor contact details
• the total amount to be paid to each creditor
• the instalment to be paid to each creditor
• the frequency of instalments and
• the length of the programme

You will contact the creditors within ten working days to obtain banking and paying instructions. 

Where you try to make a payment to a creditor but are unable to make a distribution, you are expected to correspond with the creditor and money adviser/client to ensure the information retained on eDEN is current and correct. 

When you have exhausted all avenues in attempting to make the payment, you should seek advice from the DAS Administrator by email, providing full details of their efforts to make the payment thus far. 

If any payment is returned either by a creditor or by the agent you must contact the creditor within five working days to investigate the reason for return and affect any changes advised by the creditor i.e. a change in reference number or account details.

You will amend their records within five working days of receipt of a notice from the DAS Administrator, the continuing money adviser or creditor in respect of any change to:

• the money adviser, or the money adviser’s contact details
• the client’s payment or banking details
• any creditor’s contact details

If a creditor sells their debt to another creditor they should inform you, the DAS Administrator, the continuing money adviser and the client. The creditor details will be changed on eDEN and you should contact the new creditor regarding payment instructions.

You must send the 2% fee to the DAS Administrator at the same time as you make the distribution to the creditors.

You will send a monthly remittance notice to the DAS Administrator of all payments made within the month, including:

• DAS case reference number
• client’s name
• application fee amount

If the client fails to make their agreed instalment, you will not be able to make any payment to the creditors. 

You must update the missed payment details on eDEN within five days of the agreed payment date.

If a client fails to make the equivalent of two monthly payments with the third payment due, you must alert the DAS Administrator immediately via eDEN.

If the client over or underpays, it remains at the payment distributor’s discretion how this is managed. However, it is the DAS Administrator’s view that where practical, best practice is for the under or over payment to be distributed on a pro rata basis.

You should either make a pro rata overpayment to all the creditors or make the agreed instalment to the creditors and hold the extra money. This extra money (if sufficient) can be used if the client underpays at some future point, to top up the underpayment. 

All interest accrued on the extra money being held on behalf of the client should be added to the client’s account to be used to pay creditors. 

If the client continually overpays, you should inform the DAS Administrator or the continuing money adviser via eDEN as soon as the excess balance held exceeds the amount equal to one payment. 

This excess balance should be paid pro rata to the creditors as soon as possible. All interest accrued on the extra money being held on behalf of the client should be added to the client’s account to be used to pay creditors.

If the client underpays and there is no previous surplus to top up the payments, you can either withhold the payment until the next payment is due or make a pro rata underpayment to all creditors. 

You will update eDEN to inform the parties in the DPP that the client has underpaid their agreed payments within five working days. 

Any interest accrued on any money, held on behalf of the client, should be used to pay the creditors.

Under a discretionary condition, the client may have to realise and distribute amongst creditors the value of an asset.  Therefore, you may receive a lump sum payment. 

Ad hoc lump sum payments from client should be distributed to all the creditors on a pro rata basis within five days of receipt. All interest accrued on the lump sum payments being held should be added to the client’s account to be used to pay creditors.

You will provide reports to the DAS Administrator, continuing money adviser and creditors. 

These report should be sent within five working days of a request. 

If you are unable to produce the report within that period you will inform the person requesting the information giving reasons for the delay.

The report will detail:

• DAS case reference number
• amount and dates of payments
• total amount paid by the client
• total amount paid to creditors
• total amount deducted in fees
• any funds held on behalf of the client
• any amount arrears (if applicable)

A DPP can be varied for a number of reasons.

When a DPP variation is approved, you will be advised of the changes via eDEN including:

• the total amount to be paid
• the amount to be paid to each creditor
• the frequency of instalments
• the length of the amended programme
• the name and contact details of any new creditor

You will make payments in line with the varied DPP as soon as possible and in any event within 15 working days.

If you are  unable to do so, please  alert the DAS Administrator or the continuing money adviser within that period giving reasons for the delay.

Short term financial crisis payment breaks are approved by money advisers if they believe the client has experienced a crisis which justifies not making their payment.

A client can have up to two months worth of crisis break variation approved in a rolling year.

It can be applied retrospectively to a missed payment, but only if the next payment is not yet due.

If approved, you will be notified via eDEN.

If you receive a payment you should arrange for it to be returned to the client.

Where a client cannot make payments due to a change in circumstances which go beyond a short term crisis they can apply for a payment break for up to a six months.

This occurs when their disposable income has reduced by 50 per cent and it is considered the reduction will last for the period of the break.

There is no limit to the number of times they can apply for this provided they meet the necessary criteria. 

The payment break suspends payments and interrupts the period of the DPP and it will be extended by the corresponding time period.

If approved, the DAS Administrator or the continuing money adviser will update eDEN with the new proposed end date of the DPP.

You must defer the client’s payments for the agreed period and ensure these are not included in any reports for missed payments during the relevant period. If you receive any payment during this period you should return it to the client.

Unless there has been another variation approved in the interim, the client should start making their agreed payments after the agreed payment break has ended. 

Four weeks prior to the date you should send a notice reminding their payments are due to restart.