Do you agree with the outline of the alternative access mechanism for individuals in mental crisis treatment? Promotion of alternative access to breathing: promotion of this service should be proactive, encourage service uptake and not put pressure on mental health services.
-located advisory service Centralized unit Data exchange. which is individually negotiated between the co-located counseling service and the host mental health service. A data sharing agreement should be negotiated centrally with all mental health crisis services. Introduction. Case progress is shared directly between the debt counselor and the mental health provider as needed.
The debt counselor can work closely with mental health practitioners to encourage service uptake. The Centralized Unit can promote the service to mental health practitioners, either through training and/or the development of access mechanism champions. service eligibility The debt counselor can help the client receive evidence of the mental health service directly. By co-locating services, an alternative mechanism debt counselor or worker can work closely with mental health practitioners and actively promote the service to clients.
Our services are either co-located or based in a community centre, working closely with mental health services. They can be identified by a local GP, emergency services such as the ambulance or police, or the community mental health team. Assessment by a Mental Health Clinician: Before the client is admitted to a mental health crisis service, the client will be assessed by a mental health clinician and appropriate care will be provided.
Referral to Debt Advice: After being admitted to a mental health crisis service, access to a debt counseling service will be facilitated by a mental health practitioner. Service offering - a real-world example of how specialist advice can reduce the cost of mental health care. She was transferred to the psychiatric unit where she was referred to the Citizens Advice Mental Health Sheffield Service.
Do you agree with the proposed method of administering
Service’s notification mechanism include?
Do you think the register holding details of debtors in a breathing space should be fully public, accessible to relevant debt advice
Furthermore, the reason for creating a public register - to enable creditors to take proactive steps to identify when someone is entering the breathing space - should be completed through the bankruptcy service's notification portal. As such, access to the registry should be restricted to verified creditors and debt counseling organizations. The Insolvency Service must manage access to this register, with creditors able to apply to the Insolvency Service if they wish to access the register.
Protections of a breathing space
- Do you agree with the proposed approach for excluding certain debts from the protections of breathing space?
- Do you think there are other debts, such as those in regulated credit agreements, or certain types of benefits, that should be excluded?
- Do you agree with the proposed treatment of interest, fees and charges in breathing space?
- Do you agree with the treatment of collections recovery action during breathing space? Should any other forms of collections and
- Do you agree with the proposed length of breathing space? Do you have any other comments on the operation of the check?
In addition to consumer and government debts, housing payment debts should also be included in the space. We don't think any further debts need to be excluded from the breathing room. We agree that the creditor should not be able to apply to the court for the execution of the judgment during the break.
Debt deductions that are excluded from the breathing space must of course continue to be deducted from benefits. This increased demand could result in longer waiting times for those in breathing space. It would be unfair for debtors to be excluded from the airway on this basis.
Creditor compliance with the breathing space and statutory debt repayment plan
Do you think there should be an oversight role to ensure
How should creditor compliance with the breathing space be monitored?
How do you think creditor compliance with the SDRP’s protections can be best monitored? Should creditors who fail to comply
Alternatively, the Insolvency Service could be given extended powers to monitor compliance, identify creditors who are underperforming, and sanction creditors who do not comply with a respite.
Proposals for the Statutory Debt Repayment Plan
Eligibility for the statutory debt repayment plan
Do you agree with the eligibility criteria for entering a plan? In particular, do you agree that plans lasting for a maximum of ten years is an
We agree with the broad parameters of the creditor objection process. The fourteen day period to accept or object to an SDRP is a reasonable time frame for creditors, and it means that the start of the plan is unlikely to be significantly delayed while responses from creditors are awaited. On average, Citizens Advice clients who came to us in the first quarter of 2018-2019 had 5.3 debts, with the median council tax debt representing 34% of the value of the median total of priority debts. It is therefore important that people who agree to make such payments can not only repay the additional costs – such as interest and late payments – of debts incurred before the start of the breather, but also pay off the debts that have arisen before the breather started. capital they have borrowed.
Furthermore, individuals are not always aware of the possibility of free to use debt advice. This is one feature of the poor practices currently prevalent in the IVA and IVA lead generation sectors. As the government has provided services - which are likely to provide strong protection for debtors - the breathing space and SDRP will greatly increase the attractiveness of the debt counseling process.
Do you agree with the proposed criteria for creditors to object to the plan? Are there any other criteria you feel would be appropriate?
Legislation preventing DROs from charging for advice provides strong protection for debtors. Any advice and assistance from In these circumstances we suggest that clients are not charged for advice or distribution of payments during breathing time and SDRP.
Do you agree with the design of the proposed fair and reasonable test? In particular
Do you think that creditors and debtors should have an option after the Insolvency Service decides that the plan is fair and reasonable.
Protections of the statutory debt repayment plan
Do you agree with the debts included within a plan? Should any other debts be excluded, or excludable on request?
The Council Tax (Administration and Enforcement) Regulations 1992 stated that if the person fails to pay the arrears within 7 days of receiving a reminder, they become liable for the full year's council tax. We see that this practice regularly 35 pushes people from struggling to cover the costs of a single monthly payment to a scenario where they become responsible for a very large debt. The SDRP could provide stronger protection against debt escalation for local authorities - and.
Do you agree with the proposed treatment of interest, fees and charges within the plan?
Do you agree with the proposed treatment of interest, fees and charges within the plan?
Do you agree with the proposed protections within a plan?
Are there any unintended consequences that could arise from providing these protections to debtors?
Do you agree that some debts should be prioritised for repayments within the plan? If so, do you agree with the debts that the
The breathing space and SDMP should provide protection against eviction and the non-renewal of private tenancies. Failure to do so could result in people facing serious enforcement action if the SDMP comes to an end. We propose that there should be a 30 day 'cooling off' period for customers if they leave the SDRP. This will be an opportunity for those who may be struggling to manage their repayment rate, to seek further advice and an alternative debt solution.
If the SDRP ends too quickly, there is a risk that people who have benefited from its protection will suddenly be exposed to a significant number of creditors' claims and the instigation of enforcement action on multiple fronts. During the cooling off period, individuals must be offered an appointment with a debt counseling agency. In certain circumstances, for example if a customer needs to enter into an alternative debt solution, this 'cooling off period' can be terminated at the customer's request.
Do you agree with the two key plan flexibilities outlined?
If the plans fail, the protections underpinning the scheme will no longer be in place, and former participants could become vulnerable to eviction by landlords or enforcement action and prosecution by local authorities. However, distributing the debt on a pro-rata basis would still expose customers to private rental contracts being refused when their renewal is due if significant arrears remain on rental payments. Broadly, we agree with the debt prioritization process proposed in the consultation document. It is especially important that housing, local government taxes and energy debt are prioritized within an SDMP.
Should the plan offer any other flexibility that would help to make them sustainable over time?
Do you have any specific comments about how these flexibilities should work? In particular, how do you think a severe,
We believe that a severe temporary financial shock is not the only appropriate definition of when a pay holiday should be introduced. Instead, the plan should be flexible for individuals who miss one or two payments a year, with. If clients were to experience a major life event, they should be allowed to apply for potentially longer breaks - in line with the model set out in the consultation.
In our poll, we found that changes in income during the year are often driven by changes in employment. Of those who reported a decrease in income, 13% said they had lost a job or been laid off, and 18% had a reduction in wages or hours during the past year. The most common life event leading to income loss was households facing separation or divorce, or being left behind by a partner or spouse, with 40% reporting a lower income than a year ago.
Do you agree with the requirements for continued eligibility for the plan?
We agree that individuals must continue to make the payments specified in the plan to remain eligible for the SDRP. Instead, we propose that if a debtor misses three payments in a row and does not respond to a request for a meeting with a debt counselor, he/she should receive a notice to be removed from the plan. This would bring the SDRP into line with the IVA, where three consecutive missed payments could bring the plan to an end.
We would encourage the SDRP to provide flexibility for participants and ensure that if individuals have significant arrears, such as falling behind on two or more payments to more than one provider, they should be offered an additional debt counseling session. Only if debtors ignore or do not engage with debt counseling agencies at this point should the SDRP be terminated. If an individual misses a payment after months 1 and 2, they must be notified by letter in plain English and contacted by the debt counseling agency they entered into the plan with.
Administration of breathing space and statutory debt repayment plan
- Should the plan’s funding mechanism system be based on taking a share of creditors’ monthly repayments?
- How should payment distribution in the plan be done? Should it be offered by an individual’s debt advice agency, if they have appropriate
- Do you have views on how a breathing space and plan should be reflected on a debtor’s credit file?
- Do you agree with the proposed territorial scope of the scheme?
We suggest that there should be a combined approach to split payments under the breath, allowing existing debt advice agencies with the appropriate licenses and the Insolvency Service to carry out split payments. Firstly, we agree that debt advice agencies, if they have the appropriate licenses to handle clients' money, should have a role in distributing payments under the SDRP. As suggested in the consultation, this could happen through a system where debt counseling agencies handle the entire customer journey. or form trusted partnerships with suppliers that have the capacity to implement this payment distribution model. Implementing a payment distribution system is likely to be resource intensive for most debt counseling agencies.
Referral or 'white label' arrangements can also be risky and complex processes to set up and can be difficult for smaller debt advice agencies to manage, particularly if errors are likely to occur at the payment distribution point. A payment distribution mechanism available through the Insolvency Service is likely to ensure that a greater number and range of small frontline debt advice agencies will be able to support access to the SDRP. Doing so would also avoid the risk of consolidating the market position of some large debt advisory organisations.
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