A Debt Payment Programme or DPP is a formal agreement available in Scotland through the Debt Arrangement Scheme known as DAS. A DPP lets you repay your debt with one affordable monthly payment while still leaving you enough money in your monthly budget for household bills and living expenses. You must fit certain criteria to qualify and you can only obtain a DPP through an approved organization such as Step Change Debt Charity. To qualify for a DPP you must live in Scotland you must have money left over at the end of each month after you’ve covered your household costs like food, accommodation and utility bills.
You can only set up a DPP if you can pay your debts in a reasonable amount of time. Normally this would be less than 20 years however, your individual circumstances can be considered and a longer term may be approved. There are various benefits to entering into a DPP. Your creditors are no longer allowed to contact you for any payment of any debt that’s included within the DPP or take court action against you. Your debts will be frozen meaning your creditors can’t add more interest or charges to the amount you owe or ask for extra money on top of your DPP. Any savings or properties you have are protected whilst you’re on a DPP you won’t have to sell your home or use any savings you have. If your situation changes, you can apply to change your payment or request a payment break for up to six months.
As with any debt solution, there are risks to consider before entering into a DPP. You should bear in mind that a DPP will stay on your credit file for six years and you could find it difficult to obtain credit after it ends. However, if you’ve already missed payments it’s likely your credit file has already been affected. During the DPP your access to credit cards, overdrafts and loans will be restricted so you will need to stick to your agreed budget. Your name will be added to an online public register which holds the name and address of anyone who is applying for or who has a DPP. It’s unlikely that anyone will see it but it’s something to be aware of. If you don’t keep up your payments your DPP could fail.
Your creditors may then add interest and charges to your debts that had previously been frozen. With any debt solution, it’s important to get debt advice to make sure it’s suitable for your situation. As a charity, we offer free debt advice through our helpline or our online advice tool Debt Remedy. We’ll talk through your situation and recommend the best solution for you. If we think a DPP is your best option we’ll help you set it up and we’ll be there to support you every step of the way.