In Focus Collections
fact that when a debt advice agency makes a proposal on behalf of a client, this will have gone through a recognised standard income and expenditure affordability assessment, and offers a realistic prospect of sustainable repayments. No such structure exists in relation to debts
owed to government – but it is important that one should be built.
Positive step The government has taken a hugely positive step in legislating for Breathing Space to allow people in debt a chance to see recovery action paused while they work with a debt advice provider towards a sustainable long term solution. It would be a tragedy if its own debt
collection practices end up undermining the outcome. So now is the time for the government
to get its house in order on its own debt management practices.
The current unhealthy relationship
So much can be learned from the experience of the commercial credit sector, where a regulatory structure has been built that focuses on treating customers fairly and requiring forbearance under a clear, compulsory, and well- monitored framework in which information is shared to inform realistic repayment plans
between government debt and poor collection practices exists across all areas, which is worrying given the high level of vulnerability among those who owe money. One example is starkly demonstrated by
the over-use of bailiffs to enforce council tax arrears. Even the language of government
debt collection is frequently toxic and counterproductive – frightening people away from engagement, rather than fostering it. So much can be learned from the
experience of the commercial credit sector, where a regulatory structure has been built that focuses on treating customers fairly and requiring forbearance under a clear, compulsory, and well-monitored framework in which information is shared to inform realistic repayment plans. It is time to replicate this in the world of government debts too. CCR
October 2020
www.CCRMagazine.com
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