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Debt Management in a Care Environment. David Adams ACIB, AICM. Client Debt Manager. We are not alone. Debt. End of June 2012, unpaid consumer debt held by collection agencies and debt buyers belonging to the Credit Services Association stood at £61.4 billion. - PowerPoint PPT Presentation
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Debt Management in a Care Environment
David Adams ACIB, AICM.
Client Debt Manager
We are not alone
Debt
•End of June 2012, unpaid consumer debt held
by collection agencies and debt buyers belonging
to the Credit Services Association stood at
£61.4 billion.
•Year on year increase of 18%.
A National Problem
Debt Management
• Application or Order Received
• Risk Assessment for Credit Setting
• Service Provision
• Invoicing
• Monitoring Account
• Debt Recovery
Application for Services/Credit
• Commercial
• Order for Goods
• Request for Credit Received
• Local Authority Care
• Request for service received
Risk Assessment
• Commercial
• Full credit assessment proportional with the amount involved
• Local Authority Care
• Care needs reviewed (chargeable service)
• Financial Assessment undertaken (timely)
Service Provision
• Commercial
• Service declined or agreed with credit limit
• Generally, no payment - services cease
• Local Authority Care
• Statutory duty to provide the care
• No payment – service will continue
Invoicing
• Common Ground
• Descriptive invoice (please) with settlement date
Monitoring Account
• Exceptional Invoice – monitor from issue
• Routine Invoicing – monitor via exception reports
Automated chaser letters
Telephone reminders
Debt Recovery
Effective Debt RecoveryBasic Requirements
• Sponsorship at Executive level
• A robust debt recovery strategy
• A trained and sufficiently staffed Recovery Team
• The debt recovery role to be understood by Care Teams and Budget Holders
Debt Recovery Strategy
• Robust and clear
• Action to be proportional to amount and
importance of case
Collecting the Debt
• Timely action
• Old debtors can just fade away
• Small invoices can become large debts
Recovery
• Encourage client/agent to engage and discuss problem
• Debt Recovery/Advice
• Telephone
• Letters
• Visits
Don’t Harass
Telephone Calls
• Initially very useful
• Can allow problems to be aired
• Log the call (even if no contact made)
• Confirm discussions and agreements (if any) by letter
Letters
• Logical order
• Reasonable speed
• Escalation of severity
• Signpost way forward
• No empty threats
Final Demand
• Last letter of sequence
• The following must be provided before issuing proceedings
1. Provide details of how money can be paid
1. State the debtor can make contact to discuss repayment options and provide contact details
3. Inform debtor free independent legal advice and assistance is available
Pre Legal Action Protocol
• Letter Before Legal Action
• Maybe best from litigator
• Shows escalation
Visiting Debtors
• Health and Safety – common sense• Area and family
• Alone or in twos
• Take a social worker
• Record where you have gone
• End of day check out
• Leave receipt for any payment obtained
• Raise a meeting note
• Write and confirm any agreement
Instalment Plans
• Reasonable amounts over reasonable periods
• Confirm agreement by letter (covered in next slide)
• Monitor 1st payment then periodically
Instalment Plan Confirmation
• Amounts to be paid
• Method of payment
• When will first payment be received
• Subsequent Payment dates
• If a payment is missed, all remaining debt becomes immediately due.
Debt Collectors
• Office of Fair Trading Guidelines
• You are responsible for the actions of your agents
The Herts County Council Design
Health and Community Services
HCS process for residential care debt: HCS pays the Homes net of client contribution
Property to betaken into account
Non Property clientcontribution debt
Service User diesor property sold – debt
crystallises
Income send Closing Statementto Executor and invoice raised.
Interest applies 56 daysafter death on Deferred
Payment Agreement
Operations dunning process(chase) for any unpaid invoices.
Pay invoice within21 days, if not then
1st reminder and if stillunpaid then 2nd reminder sent
Income inform Client DebtManager who obtains BudgetHolders consent. Prepare file
for Legal. Call family andinform of legal action option
and negotiate regularly.
Client Debt Manager monitorsresults, recoveries and write offs.
Client Debt Manager, whoarranges Joint Legal meeting
(Solicitor, Operations, BusinessSupport Officer/Department/AreaManager, Client Debt Manager)
HCS to instruct Legal re CourtAction; Legal to lead on
guidance through legal process.Client Debt Manager to
provide file doc.
Property to betaken into account
Provider tells HCS 2 months plusclient contribution arrears and
full effort made to collect
HCS Payments advise BusinessSupport Officer who calls the
family when notified by Payments
HCS Payments raisearrears invoice and
Income arrangemonthly invoicing
Property and Non Property case clientcontribution debt
HCS pays Grossinstead of Net
Operations dunning process (chase)for any unpaid invoices
(pay invoice within21 days, if not then
1st reminder and if stillunpaid then 2nd reminder sent
If not resolved the Business SupportOfficer checks if Safeguarding and
Appointeeship/Deputyshipoptions previously looked into.If Appointeeship/Deputyship
Client Finance Team pay clientcontributions in future and try to
cover arrears. Informs budget holder
If still unpaid Business SupportOfficer informs Client Debt
Manager, who arranges Joint Legalmeeting (Solicitor, Operations, Business
Support Officer/Department/AreaManager, Client Debt Manager)
Client Debt Manager monitorsresults, recoveries and write offs.
HCS to instruct Legal re CourtAction; Legal to lead on
guidance through legal process.Client Debt Manager toprovide file documents
HCS process for debt: Community Based Care and Short Stays
If not paid by the next invoice date(in case any credit adjustments)
then Operations send a 1st reminder
Clients invoiced 4 weeks in arrears
5 days after 1st reminder Operationscall the client (3 attempts). Any change
to requirement flag invoices in book-keeping
If not paid within 3 weeks of 1st
reminder, then Final Demand sent byOperations saying to pay immediately
or be referred for legal action
If still unpaid Operations hand over toBusiness Support Officer who contact/visit
Service User/Agent
If not resolved the Business Support Officer checks ifprevious Safeguarding and Appointeeship/Deputyship
options looked into. If required, Appointeeship/Deputyship obtained, then Client Finance Team can pay future invoices
and try to cover arrears. Informs budget manager.
If still unpaid Business SupportOfficer informs Client Debt
Manager, who arranges Joint Legalmeeting (solicitor, Operations, Business
Support Officer/Department/AreaManager, Client Debt Manager)
HCS to instruct Legal re CourtAction; Legal to lead on
guidance through legal process.Client Debt Manager to
provide file doc.
Client Debt Manager monitorsresults, recoveries and write offs.
HCS process for debt:client reasons for non payment and actions required
Invoicecalculation query
Quality ofservice query
FinancialAssessment wrong
Client cannotafford it
Business Support Officerto find out why and ifAppeal made. Possibly
Appointeeship or contact Money Advice Unit
Income to resolve andconfirm with client
Business Support Officerto resolve with client
and Provider
Income sectionresolve with Provider
HCS process for debt:client reasons for non payment and actions required
Client still unable tounderstand the invoice
after guidance
Client refusesto pay in principle
Operations unable tomake contact withClient/Agent after3 attempted calls
Business Support Officer tomake family contact to resolve
Business Support Officerto explain why should pay
and potential consequencesof not paying
Business Support Officerto arrange capacity assessment
and possibly Appointeeship
Litigation
• Do you really want to go to court?
• Expense • Court cost
• Time
• Risk• A third party decides
Take Legal Action or Not?
• Who is the debtor?• Capacity – litigation friend
• Can we prove the claim?
• Have we done all we can?
• Have all genuine queries or disputes been resolved?
• Can debtor pay?• ‘A man of straw?’
Documents Needed
• All documents will be needed for Court Bundles
• Complexities of the Bundle will depend on amount
of the Debt and hence the level of the court
• Never ever record any unsupported thought or
opinion or anything you would be embarrassed
to have read out in open court
We Go To Court
• Lose
pay other sides costs
• Win
will we get paid now?
Enforcement
• Execution
• Third Party Debt Orders (Garnishee Orders)
• Attachment of Earnings
• Orders to Obtain Information (Oral Examination)
• Charging Orders
Write-Off
• Recommendation but not gift of Recovery Unit
• As above for Care Teams
• A book-keeping event, debt still exists
Thank you for listening