Advanced debt trainers notes - Citizens Advice resources...Nov 20, 2014 · Trainers Notes for advanced debt with clients . 2 ... to prevent their problem recurring in the future

Advanced Debt Guidance for conversations on advanced debt issues

Trainers Notes for advanced debt with clients

2 ©2015 Citizens Advice Basic debt trainer notes/July17/v2

Citizens Advice financial capability

This session pack has been produced as part of Citizens Advice Financial Skills for Life.

Copyright © 2015 Citizens Advice All rights reserved. Any reproduction of part or all of the contents in any form is prohibited except with the express written permission of Citizens Advice. Citizens Advice is an operating name of the National Association of Citizens Advice Bureaux, Charity registration number 279057, VAT number 726020276, Company Limited by Guarantee, Registered number 1436945 England. Registered office: Citizens Advice, 3rd Floor North, 200 Aldersgate Street, London, EC1A 4HD

Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, Citizens Advice assumes no responsibility. The user of the information agrees that the information is subject to change without notice. To the extent permitted by law, Citizens Advice excludes all liability for any claim, loss, demands or damages of any kind whatsoever (whether such claims, loss, demands or damages were foreseeable, known or otherwise) arising out of or in connection with the drafting, accuracy and/or its interpretation, including without limitation, indirect or consequential loss or damage and whether arising in tort (including negligence), contract or otherwise.



Advanced Debt The aim of this session is to help advisers to provide a session to clients that helps them understand ways to prevent simple debt issues escalating into more complex ones in the future. This session is specifically aimed at those clients who may be coming from an actual debt intervention and are being encouraged to prevent their problem recurring in the future. Objectives are that by the end of this session clients will be able to:

• How to identify priority and non-priority issues from mail

• Understand steps to take control of their debts and their options

• Understand the legal powers of debt collectors and bailiffs

• Be aware of how to identify and contest the legality of debt collection practices.

General Guidance Notes on delivering a financial capability session are available elsewhere on the Citizens Advice website.

These notes are for the trainers use only. A separate handout pack should be used with every client in the group, which will include signposts for further information and guidance.

Trainers are encouraged to feedback to the Financial Skills for Life team with any feedback about training materials or resources. If you have any comments, please contact: [email protected]

mailto:[email protected]



Contents

Session Specific Guidance 5

Lesson Plan 7

1. Sorting the post 8

2. Options for dealing with debt 18

3. Debt collection rules - factsheet 19

4. Debt collection exercise 22

5. Types of debt – signposts only 23

Evaluation Guidance 25

Trainers notes 27



Session specific guidance Subject information Trainers do not need to have specialist debt advice knowledge or experience but must have a basic understanding of the different types of debt and be able to signpost learners to sources of further advice and information. The pack contains all the key information for the topics covered. Any additional information that is given should be taken from an up to date and accurate source such as:

• the debt section of www.adviceguide.org.uk

• the Money Advice Service at www.moneyadviceservice.org.uk This session aims to help learners understand the basis they need to prevent simple debt issues from escalating. For further information, learners should be referred to their local Citizens Advice or other advice agency. Materials

• Blank flip chart paper • Marker pens • Note paper and pens for learners • Blu tack • Calculators • Prepared cut-outs for word-matching activity

Manage expectations – Make it clear to clients that the session is a brief overview of debt, and the most essential elements of financial capability that relate to it. As a one-off session, there will not be the time to explore any single element in any great detail. Signpost and empower – Ensure that clients are aware that after the session they will have a clear idea where to go to answer outstanding queries and to get further assistance.

http://www.adviceguide.org.uk/

http://www.moneyadviceservice.org.uk/



Top tips



Lesson Plan

Red activities – Are essential to any session on this topic Amber activities – Are highly recommended but not essential Green activities – Are optional activities, if time allows The size of the bubble indicates roughly how much time, relative to the session, to spend on an activity.

1

2

3

This session is intended to take around 60 minutes to deliver. Although Activity Five is not one that is really meant to be done with a client, it is meant to inform an advisor on possible likely options to recommend to client for potential future sessions. 4

6

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: 1

– B

(d) 2

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– E

(g) 2

3

– D

(g) 5

4

– E

(g) 2

5

– D

(g) 5

5



Activity: Sorting the post

Put learners into small groups and give each a batch of 5 sample letters, attached as handouts, then ask them to sort them into ‘important’ and ‘not so important’, discussing the reasons for their decisions as they do so. This activity can also be done with single clients in a one-on-one setting. Questions for discussion:

• How did they make their decisions about which bills/debts were most important?

• Did the letters seem written in a certain way? What effect do you think they were going for?

• Are there some things that might be seen as ‘priority’ to the clients that would, strictly speaking, otherwise fit under ‘non priority’?

If used in conjunction with a priority/non-priority budgeting exercise, explain that not paying some bills has more effect than others. The most important bills are called priority debts. If you don’t pay a priority debt the result can be serious, such as losing your home. Other bills are called non priority debts. They still matter but the result of not paying them is not as serious. Get the client to look at their letters again and sort them into ‘priority’ and ‘non priority’ according to the definition they’ve been given.

If this was useful, why not try…

Debt – Priority and non-priority debts (quick reference) Debt – Debt emergency cards

AIC 20 – D

S T W



Great Power Electric PO Box 333

Birmingham

Street Notown Our ref: FG/1234/98765 30 January 2015

Immediate Action Required Final Reminder for £305.39 owed

You still have not paid your electricity bill even though we sent you a reminder giving you details of the different ways you can pay. If you do not pay your account, or contact us, within the next 7 days we will take action to recover the debt. We will either fit a card prepayment meter or cut off your electricity supply. If you don’t let us in when we call we will immediately ask a magistrate for a warrant which lets us enter your property even if you are not there. We can do this by law. If we do this it could mean you will also have to pay costs of up to £31.30. If you cannot pay phone us free on 0800 xxx xxx. It is in your own interest to contact us to discuss a payment arrangement. Do not delay, call us now. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ Credit account number: 344 4040 Amount due: £305.39 Signature:____________________________ Date:___________________ Code: 11-22-33 Cash/Cheque total



Natural Gas PO Box 222 Manchester

Avenue Notown Our ref: NG/1234/05067 30 January 2015

Final Notice Immediate Action Necessary To Pay £193.64 Owed

You still have not paid your Gas bill even though we sent you a reminder including details of how you can pay the amount you owe. If you do not pay your account, or contact us, within the next 10 days we will take action to recover the debt. We will either cut off your gas supply or fit a card prepayment meter. If you don’t let us in when we call we will immediately ask a magistrate for a warrant which lets us enter your property even if you are not there. We can do this by law. If we do this it could mean you will also have to pay costs of up to £31.30. If you cannot pay phone us on 0808 xxx xxx. It is in your own interest to contact us to discuss a payment arrangement. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Credit account number: 05067 Amount due: £193.64 Signature:_____________________________ Date:______________________ Code: 33-22-33 Cash/Cheque total



Borough of Anytown

Anytown Town Hall Gabriel Road, Anytown

Avenue,

Anytown 15 January 2015 Dear You currently have rent arrears of: Rent of £385.00 is owed at 1 November 2014. If you do not clear these arrears, the Mayor and Burgesses of the Borough of Anytown intend to take legal action and apply to Court for an order requiring you to give up possession of your home. If you want to discuss this letter you should contact your Neighbourhood Housing Officer. Signed P Chen Head of Legal Services On behalf of the Mayor and Burgesses of the Borough of Anytown, Anytown Town Hall, Gabriel Road, Anytown Tel: 000 123 4567



Happy Housing

Main Street Anytown

Room Happy Housing Hostel Anytown 25 November 2014 Dear You currently have rent arrears of £85.00 Rent of £85.00 is owed at 20 November 2014. If you do not clear these arrears, Happy Housing can evict you from your room at Happy Housing Hostel. We can take legal action and apply to Court for an order requiring you to pay this money owed. You have been warned about paying the rent you owe. If you want to discuss this notice you should contact your Hostel support worker. A Bunbury A Bunbury Head of Legal Services at Happy Housing



Friendly Personal Credit Mrs Street Anytown Ref: 1122 Customer no: 4455 Dear Mrs Re: Outstanding Balance £1241.65 Contracted Weekly Rate £40.50 NOTIFICATION OF SERIOUS ARREARS DESPITE OUR PREVIOUS LETTER AND RECENT VISITS, your account is now seriously in arrears. You have failed to make the agreed payments and you therefore in breach of your contract. YOU MUST re-commence weekly payments to your Agent and bring your account up to date otherwise debt recovery action may be taken against you. If you are unable to re-commence payments you must contact your local office immediately. Due to your current level of arrears, further credit is unlikely to be authorised until your account is brought up to date. Yours sincerely, Mr I MacIntosh MANAGER OFFICE: Friendly House, Town Centre, Anytown



Aggregated Collections, 1 Union Street, Anytown Street Anytown

FORMAL NOTICE OF LEGAL ACTION Dear Ms I regret to note that you are not making payments as agreed despite all our efforts to help you.

THIS SITUATION CANNOT BE ALLOWED TO CONTINUE. I now advise you of our intention to commence legal proceedings. I will remind you that, if a judgement is entered and the debt remains unpaid, we have the right to take any or all of the following actions: - Warrant of Execution against your belongings by a court appointed bailiff; - Attachment of earnings against your current and future employers; - Bankruptcy if the debt exceeds £750; - A charging order against your property (if you are a homeowner). All judgements are recorded with the relevant credit reference agencies and will make it extremely difficult for you to obtain future credit facilities. There remains one way to prevent the course of action I have described above. Contact me to discuss this option. Yours Faithfully, A. Griffiths, Regional Manager 0111 223344 P.S. DO NOT IGNORE THIS SITUATION, IT WILL NOT GO AWAY UNLESS YOU HELP US TO HELP YOU



Mobile phone company 1 New Street Anytown Terrace Anytown Bill for your mobile phone 1 August – 1 September 2015 Line rental £ 15.00 Calls £ 5.00 Texts £ 2.30 Total £ 22.30

PAY NOW OR YOUR PHONE MAY BE CUT OFF. YOU MAY THEN BE LIABLE FOR RECONNECTION CHARGES.



Anytown Magistrates Court Court Buildings Anytown 30 November 2014 Case ref: Mr , Street, Anytown Your fine from Case ref: is £120.00. This fine is due in weekly instalments of £10.00. If you miss a payment, this will be seen as a default in payment. Further action can then be taken. J Omari Signed for Court administrator Anytown Magistrates Court



I need bak asap that 20 quid I lent u last month. L8a. Vx



Activity: Dealing with debts – the options

Give out handout DB2, entitled ‘Dealing with debt – the options’, and divide the participants into 3 groups. Ask each to spend 10 minutes looking at the pros and cons of one of the following options for dealing with debt in preparation for a group discussion:

• Money advice • Debt consolidation • Debt management

For one-to-one sessions, the adviser can choose whether the client would benefit from a guided conversation through the handout, or if they would rather read and understand it in their own time for a later discussion with the adviser. The adviser should finish the session by giving out local publicity for money advice in the area. Depending on your local situation, this unit may prompt some complaints about local access to money advice services. Acknowledge any issues, and offer constructive options where possible, such as direct referral for Citizens Advice for money advice appointments, National Debtline website and telephone services. Remember – Bailiffs are now technically called Enforcement Agents: make sure that clients understand that this means the exact same as ‘bailiff’.


Debt – Tips for dealing with Debt

AIC 20 – E

The rules around debt collection The differences between Debt Collectors and Bailiffs Debt collectors don't have the same powers as bailiffs. They can't enter your home or take your possessions. They can only write, phone, or visit your home to talk to you about paying back the debt. A bailiff has different powers and may visit a person’s home if they don’t pay their debts – such as a Council Tax bill, parking fine, court fine or county court judgment. However, bailiffs can’t enter your home:

• by force, for example by pushing past you • if only children under 16 or vulnerable people are in the property • between the hours of 9pm and 6am • through anything except the door.

It’s important to know that bailiffs are allowed to force their way into a home to collect unpaid criminal fines, Income Tax or Stamp Duty, but only as a last resort. How to deal with them If you don’t let a bailiff in or agree to pay them:

• They are allowed to take things from outside your home, like your car. • You could end up owing even more money as they can add charges and

fees to your debt. If you do let a bailiff in but don’t pay them they may take some of your belongings. They could sell the items to pay debts and cover their fees. How to check a bailiff’s identity Before you let a bailiff in to take your things or pay them, ask to see:

• Proof of their identity, like an ID card or enforcement agent certificate. • Which company they’re from – call this to check they’re genuine, but don’t

use a number they give you, get one online or from directory enquiries. • A detailed breakdown of the amount owed.

Factsheet AIC 20 – E

What bailiffs can and can’t take If you let a bailiff into your home, they may take some of your belongings to sell. Bailiffs can take:

• luxury items, such as a TV or games console. They can’t take:

• Things you need – such as your clothes, cooker, or fridge. • Work tools and equipment which together are worth less than £1,350. • Another persons belongings, for example your partner’s computer. The

difficult part here is that you’ll have to prove that someone else’s goods don’t belong to you.

What laws apply to Debt Collectors? Section 40 of the Administration of Justice Act says: 1. A person commits an offence if, with the object of coercing another person

to pay money claimed from the other as a debt due under a contract he: a. harasses the other with demands for payment which, in respect of their

frequency, or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation;

b. falsely represents, in relation to the money claimed, that criminal proceedings lie for failure to pay it;

c. falsely represents himself to be authorised in some official capacity to claim or enforce payment; or

d. utters a document falsely represented by him to have some official character, or purporting to have some official character which he know it has not.

2. A person may be guilty of an offence by virtue of sub-section (1) (a) above if

he concerts with others in the taking of such actions as is described in that paragraph, notwithstanding that his own course of conduct does not by itself amount to harassment.

Administration of Justice Act, 1970. Statute Law Database, http://www.legislation.gov.uk/ukpga/1970/31/section/40

Guidance for debt collection guidance 1. “It is unfair to communicate, in whatever form, with consumers in an

unclear, inaccurate or misleading manner.” This means that debt collectors should not mislead debtors with documents which look as though they have been issued from the court, give false information, or mislead the debtor into thinking that they are bailiffs. This includes the use of confusing legal terms.

2. “Those contacting debtors must not be deceitful by misrepresenting

their authority and/or the correct legal position. “ This means that debt collectors can’t give the impression that they work for a court, or imply that action will be taken when it will not.

3. “Putting pressure on debtors or third parties is considered to be

oppressive.” This means that debt collectors are not allowed to pressure you into selling goods, use multiple trading names, ignore disputes, force you to make payments that you cannot afford, or make verbal or physical threats.

4. “Dealings with debtors are not to be deceitful or unfair.”

This means that debt collectors are not allowed to send letters that are not addressed correctly because they are unsure of the debtors details, refuse to deal with appointed third parties or refuse to suspend action if the debt is being disputed.

5. “Charges should not be levied unfairly.”

This means debt collectors are not allowed to add any unreasonable charges or claim collection costs where this is not appropriate.

6. “Those visiting debtors must not act in an unclear or threatening

manner.” This means that debt collectors should give you full details about when they will visit, leave the property when asked and not visit at inappropriate locations such as the workplace.

http://www.legislation.gov.uk/ukpga/1970/31/section/40

22 ©2015 Citizens Advice Basic debt trainer notes/Sep16/v2


Activity: Debt Collection Exercise

This activity uses handout DB4 and is best undertaken after going through the factsheet ‘Debt collection rules’ in some detail. Depending on the client’s level, they may need a fair bit of support on this quite complex activity. Answers 1. Charges should not be levied unfairly – an unreasonable charge of £450

for a £28 bill.

2. Misleading statement – a letter states the debt has been to court and there is a CCJ.

3. False representation – a debt collector acting as a bailiff when they are not.

4. Unnecessary use of legal language – for example Corpus delicti, which means body of offence.

5. Charges should not be levied unfairly – further charges ad infinitum, which means further charges without a limit.

6. Misrepresenting authority – a debt collection agent is stating they have more powers that they do to enter the property by any means necessary and can file for bankruptcy.

7. Oppressive pressure – such as attending a persons place of work.

8. Oppressive pressure – discussing the debt with a third party (mother).


Debt – Priority and non-priority debts (quick reference) Credit – Buy as You View exercise

AIC 20 – E



Factsheet: Control of Goods Act Factsheet DB5 can be simply provided to a client, but it is recommended that the adviser goes through it with them step by step. Each tip would benefit from basic anecdotes and conversational context that makes the tip relevant to the clients own circumstances.

AIC 20 – E

If this was of use, why not try…

Credit – Explaining Jargon – A story



Signposting tool for advisers ONLY: Types of debt

Financial capability is distinct from debt advice, and advisers who are not debt specialists should not under any circumstances offer debt advice. However, sometimes this can be a difficult distinction to make. The following list is a non-exhaustive set of internal signposts for clients with the following debt issues. Each recommended activity is for a financial capability resource that is likely to be of use to the client and it’s always easier to get a client to engage with financial capability when it feels relevant to their immediate problems. However, in each case a client should also be signposted to appropriate debt advice. The most common debt advice providers, other than Citizens Advice, are: National Debtline provides free information to people living in England, Wales and Scotland. It also provides an information pack on dealing with debt. The line is available Monday to Friday 9 am to 9 pm and on Saturday 9.30 am to 1pm. The National Debtline telephone number is 0808 808 4000 and the website is www.nationaldebtline.co.uk. StepChange Debt Charity offers free, confidential advice and support to anyone who is worried about debt. Available:

• Monday to Friday 8 am – 8 pm and Saturday 8 am – 4 pm, freephone 0800 138 1111 where you can speak to a Debt Counsellor.

• Online where you can get information on how to deal with your debt problems at www.stepchange.org.

• An online Debt Remedy tool, this asks you a series of questions about your household, income and expenditure and then provides you with a Debt Remedy tailored to your personal circumstances.

Go to www.stepchange.org. PayPlan offers free debt advice and solutions to clients, such as debt management plans (DMPs). You can contact Payplan on freephone 0800 716 239 or at www.payplan.com. Business Debtline is a dedicated advice service for small businesses. You can get their contact details from their website at www.bdl.org.uk or phone them on 0800 197 6026.

AIC 20 – E

http://www.nationaldebtline.co.uk/

http://www.stepchange.org/

http://www.stepchange.org/

http://www.payplan.com/

http://www.bdl.org.uk/



Recommended Financial Capability if a client has:

Bank account debt Overdraft debt

Resources from the Banking Topics section will help, as both Bank Accounts and Overdrafts are covered

Car loan debt Credit card debt Hire purchase debt Personal loan debt Secured loan debt Store card debt

Resources from the Credit Topics section will help. There are several useful APR activities which address these points, as well as a very detailed HP exercise.

Child maintenance arrears County court judgment (CCJ) Magistrates' court debts Parking fines

It would be best to signpost this client directly for further debt advice. Any financial capability covered would depend on any other needs they have.

Doorstep loan debt Gambling debt Loan shark debt Logbook loan debt Payday loan debt

The Credit topic has a lot of useful topics, but the client may benefit from topics covered in the Clients at risk of High-Cost Credit Toolkit

Council tax debt Phone TV & Gym debts

Resources from the Budgeting Topics section will help with these general debts

Tax arrears and HMRC debt Tax credit overpayments

It would be best to signpost this client directly for further debt advice. Any financial capability covered would depend on any other needs they have.

Utility bills debt Water arrears advice

Resources from the Energy and Water topic cover both these issues. Signposting to EBD or EBDx sessions (if available) is recommended.

Evaluation Guidance Areas that underpin client financial capability These are the Citizens Advice Financial Capability Areas that were carefully researched and developed by The Impact Team at Citizens Advice to help local offices measure client financial capability robustly and consistently across services. They were developed in line with the MAS UK Financial Capability Strategy Adult Outcomes Framework. Sample questions and scales can be found overleaf. An Impact Tool is available in Petra for recording responses and progress.

Keeping track of money Controlled spending

◉ Keep track of money going out, money coming in and calculate what's left over. ◉ Check my current balance and keep my papers in order.

◉ Spend or save only what I can afford after covering the basics I need to live, like food, housing and electricity.

Having enough money to live Planning ahead with money

◉ Have enough money to cover the basics I need to live like food, housing and electricity.

◉ Know when my bills and payments are due and keep on top of priority bills, like for electricity, loans and council tax. ◉ Put some money aside for big or unexpected costs.

Looking for the best deals Staying informed about money services

◉ Look at different options and buying the best deal for things like food, clothes, large items or services like phone, electricity or insurance. ◉ Get different opinions on what I am buying, like from reviews and comparison websites.

◉ Read the main information about money services I get like banking, benefits and loans. ◉ Stay on top of changes to these or get help when I don’t understand.

Mindset

◉ Confidence about taking action on my money matters.

Copyright © 2015 Citizens Advice All rights reserved. Any reproduction of part or all of the contents in any form is prohibited except with the express written permission of Citizens Advice. Please note these areas, questions and scales are owned by Citizens Advice and subject to copyright restrictions so reproduction must include the relevant copyright statement above and no changes to its wording, response categories or layout must be made. For further information please contact Satdeep Grewal on [email protected] or 03000 231 608.


Sample questions and scales for measuring client financial capability These questions can be used to ascertain how good someone’s financial capability is and so, what their level of need is. They also allow you to track progress by being used to follow-up with how someone is getting on after you have helped them.

Score 1 to 3 Score 4 Score 5 to 7

Low financial capability Average financial capability Advanced financial capability

High need Medium need Low need

Keeping track of money ◉ Calculate money going out, money coming in and what's left over. ◉ Check my current balance and keep my papers in order. Rate your knowledge about the above

No knowledge

No to some knowledge

Some knowledge

Some to good

knowledge

Good knowledge

Good to excellent knowledge

Excellent knowledge

Don’t know

1 2 3 4 5 6 7 ▢

How often do you do the above?

Never Never to sometimes

Sometimes

Sometimes to often

Often

Often to very often

Very often

Don’t know

1 2 3 4 5 6 7 ▢

Staying informed about money services ◉ Read the main information about money services I get like banking, benefits and loans. ◉ Stay on top of changes to these or get help when I don’t understand. Rate your knowledge about the above:

No knowledge

No to some knowledge

Some knowledge

Some to good

knowledge

Good knowledge

Good to excellent knowledge

Excellent knowledge

Don’t know

1 2 3 4 5 6 7 ▢

How often do you do the above?

Never Never to sometimes

Sometimes

Sometimes to often

Often

Often to very often

Very often

Don’t know

1 2 3 4 5 6 7 ▢

Mindset How much confidence do you have about taking action on your money matters?

No confidence

No to some confidence

Some confidence

Some to good confidence

Good confidence

Good to high confidence

High confidence

Don’t know

1 2 3 4 5 6 7 ▢

Copyright © 2015 Citizens Advice All rights reserved. Any reproduction of part or all of the contents in any form is prohibited except with the express written permission of Citizens Advice. Please note these areas, questions and scales are owned by Citizens Advice and subject to copyright restrictions so reproduction must include the relevant copyright statement above and no changes to its wording, response categories or layout must be made. For further information please contact Satdeep Grewal on [email protected] or 03000 231 608.




Trainers notes

Documents

Advanced debt trainers notes - Citizens Advice resources...Nov 20, 2014 · Trainers Notes for advanced debt with clients . 2 ... to prevent their problem recurring in the future