The payments distributor’s charges are governed by regulation 17 and the DAS Administrator’s fee by regulation 5. It is a regulated function rather than a debt collection business, and how the Debt Arrangement Scheme works sets out where it fits.

One thing below is worth checking against anything else you read. The list of payment methods most pages print was taken out of the regulations on 4 November 2019, and our Debt Arrangement Scheme page sets out how we help.

It collects one payment from you and divides it between the creditors in your programme in proportion to what each is owed. The Accountant in Bankruptcy’s guidance for distributors gives them five days from receipt to share out any lump sum you pay in.

Pro rata, and why it matters

Pro rata means proportionate. A creditor owed a third of your total debt receives a third of each distribution, after the scheme fees have come off.

You never pay a participating creditor directly while the programme runs. Regulation 27(2)(d) prohibits any other payment to a creditor taking part in the programme, apart from a continuing liability, and how your payment is worked out covers the figure itself.

What the distributor is responsible for

• Collecting your regular payment by the method agreed in your programme.
• Distributing to each participating creditor in proportion to the debt owed.
• Deducting the scheme fees and remitting the 2 per cent administrator fee at the same time as the distribution.
• Sharing any ad hoc lump sum pro rata within five days of receiving it, under AiB’s guidance rather than under the regulations.
• Sending the written notice of completion at the end of the programme.

Those duties come from the regulations and from the Accountant in Bankruptcy’s guidance for payments distributors, which is written for the trade rather than for you.

The DAS Administrator approves them, and your approved money adviser nominates the one your programme uses. You are not left to find one yourself.

Where it sits in the nomination

Nominating a distributor is one of the core jobs the Accountant in Bankruptcy lists for a money adviser, alongside discussing every option, assessing your surplus income and submitting the application.

The Accountant in Bankruptcy holds the list of approved distributors and can act as one itself. Why the law insists on a money adviser explains the rest of that role.

Everyone in the programme, and who decides what

The distributor decides nothing about your programme. Approval, variation and revocation are all matters for the DAS Administrator.

That division of labour is the useful thing to hold on to. If something needs deciding, the answer is not going to come from the organisation collecting your payment.

Twenty per cent for an individual, under regulation 17(2) as substituted by SSI 2019/315 with effect from 4 November 2019. For Business DAS it is a ceiling rather than a rate, because a distributor may charge no more than eight per cent.

You pay none of it

A payments distributor may make no charge of any kind to a debtor. You pay one figure and it is split between the creditors.

The 20 per cent is a fixed rate rather than a ceiling. It was substituted by SSI 2019/315, in force 4 November 2019, and anything quoting 8 per cent for an individual programme is out of date.

The two fees together

The fee comes out of what is distributed to creditors rather than being added to your debt. Your creditors fund the scheme out of what they receive.

Programmes applied for before 4 November 2019 keep the older ceiling of no more than 8 per cent. What the scheme costs and whether the fees are taken from your payment or added to your debt go through the mechanism.

When the fee is applied

Fees are deducted only once you have made your payment, and before any money reaches creditors. The Accountant in Bankruptcy’s guidance on fees also requires creditors to write those sums off rather than pursue you for them on completion.

By a payment mandate to your employer, or by any other method agreed between you and the payments distributor. The closed list of methods that older pages print was taken out of regulation 31 on 4 November 2019.

What regulation 31 says now

Regulation 31(1)(b) to (d) was substituted by SSI 2019/315, leaving a payment mandate to an employer or any other method agreed with the distributor. The DAS Administrator may also approve a different method where that makes completion more likely.

So the question to ask your adviser is what the distributor will accept, not which of four options the regulations permit. They no longer list any.

In practice most people set up a standing arrangement from their bank account and leave it running. What matters is that the payment arrives, not how it is sent.

The employer route, and what it is not

Regulation 32 governs a payment instruction to an employer. On delivery the employer deducts the sum specified on every pay day and pays it to the payments distributor.

That is a voluntary arrangement and not an earnings arrestment. It can be recalled where another payment method is approved, or by notice when the programme is revoked or completed.

The 42 days

Your first payment is due within 42 days of approval, a figure substituted by SSI 2013/225 with effect from 2 July 2013. Distributors are expected to have systems in place to see that it happens.

One late payment does not end a programme. Arrears become a ground for revocation once the sum unpaid reaches the aggregate of payments due in a period of two months beginning after your last payment.

Revocation is not instant

The DAS Administrator must give written notice of a proposal to revoke to you, your creditors and your adviser, and cannot implement it for at least four weeks. Why a programme gets revoked sets out every ground.

The better route is almost always a variation. Your adviser can apply to change the amount or the length of the programme when your circumstances change.

The two payment breaks

The crisis break is limited to two deferments in any 12-month period, and the Accountant in Bankruptcy’s guidance on variations gives an unexpected car repair as the sort of thing it is meant for.

The six-month break no longer needs a reason from a fixed list. That list sat in regulation 37(3) and was removed by SSI 2023/9 on 6 February 2023.

Any page still printing five or seven qualifying grounds is quoting a repealed provision. How payment breaks work now covers the current test.

What you get is a notice of completion under regulation 46, sent by the payments distributor. There is no completion certificate.

Who gets the notice

It goes to the DAS Administrator, to any continuing money adviser, to you, and to every creditor taking part. That is what formally closes the programme.

Where your payments were coming through an employer instruction, the Administrator or your continuing money adviser must also tell the employer in writing. Deductions stop at that point.

What completion means

• The frozen interest, fees, penalties and other charges cease to be owed.
• Creditors cannot hold you liable for further payments on the debts in the programme.
• Creditors write off the sums paid away in fees rather than pursuing you for them.
• Your details are removed from the DAS Register.

No statutory period governs how long an entry stays after a programme completes. The Accountant in Bankruptcy says details are removed on completion without giving a timescale.

Do not expect a certificate, because the regulations do not provide for one. What happens when a programme ends takes it from there.

It cannot charge you, decide anything about your programme, or enforce a debt. Its job begins and ends with collecting and dividing the money.

Three limits worth knowing

• It has no enforcement powers, and revocation is a decision for the DAS Administrator after at least four weeks’ notice.
• It cannot vary your payment. That takes a variation application decided by the Administrator, or a crisis break approved by your adviser.
• It cannot make a charge of any kind to a debtor, in any circumstances.

Where to raise a problem

Start with your continuing money adviser, because they administer the programme and deal with the distributor for you. How the application is made explains who that is in your case.

If a distribution looks wrong, ask for a statement showing what each creditor received and when. The payments distributor guidance is the standard they work to.