Are interest and charges stopped on a DPP?
From the date you apply for a DPP your creditors have to:
- Freeze any interest or charges being applied to your debts
- Stop taking any further court or enforcement action
- Stop sending you letters asking for payments
If your DPP is not approved or you stop paying your DPP, your creditors can apply interest and charges on your debts and take court enforcement action again.
Changes to your situation while on a DPP
If your situation changes while you’re on a DPP you can apply for your payment to be varied. Your creditors and the DAS Administrator will consider the impact of the change (for example, if you reduce your payment how long will it take for the debts to be repaid?) and decide whether to approve it.
If you have an emergency or crisis where you need to pay for an unexpected cost, such as a car breakdown, you can request a short-term break of one month. Your money advisor can approve this and will let your creditors know. You can request up to two of these in a 12-month period. Your payment will not change but your DPP term will be extended to cover the break.
If you have a short term ‘income shock’ while you’re on a DPP, and as long as your disposable income has been reduced by 50% or more, you can apply for a payment holiday. Income shocks can be the result of a number of things, including:
- Being made unemployed or changing jobs
- Maternity or paternity leave
- Not being able to work because of illness
- Divorce or separation, including from a co-habiting partner
- A reduction in tax credits or benefits payments
A payment holiday will mean that you can have up to a six month break from making payments towards your DPP. However, the payment holiday term will be added to your DPP.