Can a debtor obtain more credit?

Generally, you must not extend further credit to a debtor who is in a debt payment programme (DPP).  The debtor must notify you if they have a DPP.  However, it is always advisable to check the DAS Register prior to considering future credit agreements.  If you provide additional credit out with the conditions specified in the legislation, you will not be able to take action to recover the debt until after the DPP has been concluded or revoked.   

The following circumstances are the only conditions under which a debtor in a DPP should get additional credit:

• credit approved which is included in a variation to a DPP
• credit for emergency repairs to the debtor’s home
• credit for reasonable funeral expenses
• further credit incurred as part of a cyclical loan agreement in operation prior to the approval of the DPP, or
• trade debt incurred by the debtor in the ordinary course of business.

 The debtor will be expected to pay this extended credit at the agreed contracted rate.  The DPP may be varied to take into consideration this additional expenditure. 

• Further information on varying a DPP.