Do the right thing, Adviser's and creditors experience of best practice ...

Step 1The person’s circumstancesThe people who owe money will have a rangeof different personal circumstances. Some willneed a debt advice agency to represent them inrepayment negotiations. Others – including someof those signposted or referred for advice – willprefer to negotiate with their creditors themselves.Creditors should treat both groups of customersin the same way, as Capital One, Equidebt, M&SMoney and Santander Cards UK already do.Other people in debt will have circumstances suchas mental or physical health problems that affecttheir ability to manage money and repay what theyowe. Creditors should put processes and people inplace to identify and help these people in a way thatmeets their needs. For example, Allied InternationalCredit uses key words and phrases to identifypeople who may have mental health problems.Once identified, these people are taken out ofmainstream collections and dealt with by aspecialist member of staff. The person’s whole situationUnmanageable personal debt might be just oneof the problems someone in debt is dealing with,or a symptom of several other problems – suchas relationship breakdown, redundancy orbereavement. Creditors should approach everyperson positively, give them time to address morepressing problems or work with an adviser. In themeantime, creditors should stop sending lettersand making calls demanding payment for at least30 days, and offer more time if the person needs it.Creditors should also appreciate that some peoplewho can’t pay might have avoided talking to theircreditors. This does not necessarily mean that theywon’t pay. When these people do establish contact,their creditors should take a pragmatic approach.Recovery action should be suspended orwithdrawn, and creditors should seek toset up affordable repayment plans instead.Sovereign Housing Association takes this approach.Before court action is commenced, residents areasked to attend a pre-court panel. The panelincludes debt and welfare benefits advisers.The person in debt receives a full benefit check,budgeting and debt advice. Two thirds of thepeople who attend these panels repay their debtwithout the need for court action. This not onlyhelps people repay what they owe, it also reducescosts for Sovereign Housing Association. 6