Policy Corporate Debt policy

4. How will we go about it

Our approach will be proportional, consistent and transparent.

Proportional
That we will strike a balance between potential loss of income to the Council and the costs of recovery action.

Consistent
Taking a similar approach in similar circumstances in the use we make of our recovery powers and procedures. It does not simply mean uniformity, since we will also take into account the social circumstances of any resident, payment history, ability to pay or any other relevant information.

Transparent
Being clear and concise with communication to ensure understanding of what is expected and what they should expect from the Council.

With this approach in mind, we will apply the following as standard:

Billing: We will ensure that all bills/invoices clearly show:

• What the bill is for
• Issue date
• Who is liable for the debt
• The amount of the debt and a list of dates that the payment is expected to be received.
• Where a reduction is possible through discount, exemption, discretionary help or local reductions these will be included within the bill and on our website.
• Contact details for any enquiry.
• Details of the actions that can be taken for non-payment.

Correspondence: We will:

• Write in plain English avoiding the use of jargon.
• Set out clearly both the terms of any agreement to pay and the potential consequences of not paying.
• Produce documents in different formats to help support residents so that they are not at a disadvantage when using our services. For example; sending a large print document for someone who is visually impaired.

Payment and arrangements: We will:

• Encourage residents to pay promptly and regularly
• Provide a range of payment options (see appendix 5)
• Promote Direct Debit as this is a proven method for ensuring payments are made on time.
• Agree to alternative payment arrangements when appropriate discussing the length of this arrangement with the individual.
• When making an arrangement we will get as much detail as possible about the individual circumstances in order to make an accurate assessment of their ability to pay. This may require them to complete an income and expenditure form.
• Where an arrangement for the same debt fails on more than one occasion we will try and explore with the resident the reasons why and if appropriate we will refer for further support, this could include a referral to the financial resilience team or debt advice agency before agreeing to any new repayment plan.
• Monitor arrangements and deal promptly with any that fall behind as maintaining regular repayments is an important part of effective debt collection.
• When we have the authority to take alternative actions if the arrangement is not kept up to date we will highlight the action so that the debtor is aware of this.

Contact and Advice: We will provide and publicise all our contact methods and encourage early contact, these are:

• Telephone
• Email
• Letter
• In person either at Blackdown House or Exmouth Town Hall (by appointment). We can also do home visit where it is appropriate to do so. For instance there is a vulnerability need and the resident is unable to attend our offices in either Honiton or Exmouth.

Where appropriate we will:

• Check entitlement to any reduction or relief.
• Raise awareness to maximise Housing Benefit, Universal Credit and Council Tax Reduction (CTR).
• Train staff who deal with personal debt matters to signpost residents on to other income-related benefits such as: Universal Credit, Job Seekers’ Allowance, Working Tax Credit, Pension Credits or a Disability Allowance.
• Support households through financial recovery by making realistic arrangements with consideration of individual personal circumstances and finances available through the use of financial forms that break down the customer’s income and expenditure. These forms can also be used to assess entitlement to access discretionary help that is available and as a referral mechanism into the Financial Resilience team.
• Signpost residents to where they can get free independent financial advice, such as Citizens Advice, Money Advice Service, etc.
• With the agreement of the resident we will also refer rent and Council Tax arrears cases to our Financial Resilience team and/or, appointed welfare agencies who can give much wider support. This is to not only deal with rent and/or Council Tax arrears but is also to help deal with any social issues, paper work, managing budgets, etc.
• Signpost businesses to advice centres and keep our website up to date with the latest organisations where advice can be sought.
• Ensure debt recovery practices follow relevant legislation and result in affordable and sustainable repayments.
• Hold recovery action for specific and managed situations for a period of time appropriate for the individual situation or legislative requirements.
• We will use our income and expenditure forms to help our customers to try to avoid future debt by creating financial resilience removing the repeated financial crisis scenario.
• The Financial Resilience team will use the income and expenditure forms to aid them in achieving the aims of the Poverty strategy. Part of this work will involve identifying areas where income can be maximised and expenditure minimised.

Debt advice agencies:

• We will only refer to accredited specialist debt advice agencies
• We will work with Citizens Advice East Devon to develop and maintain a Standard Financial Statement that can be used to establish our resident’s ability to pay and to inform our decisions relating to the recovery actions that we take.
• Breathing space/ Debt legislation
• We will conform to Breathing Space and any other relevant legislation/government guidance relating to handling debts.
• Where we receive notifications from the Insolvency Service of a Breathing Space we will ensure that the recovery of debts is placed on hold for the duration of Breathing Space.
• We will work with the debt advice agency involved to try to lift the customer out of debt and consider any reasonable offers made.
• Where we have appointed an agent to assist in the recovery of the debt and we become aware of breathing space we will as soon as practicable contact the agent and hold the case to prevent them taking any action on our behalf.

Multiple debts

When we become aware that a resident has multiple debts to EDDC and is having difficulty in paying them, consideration will be given to priority debts (see appendix 1).

Enforcement / Collection Agents

Enforcement /Collection agencies we use will be appointed by formal contract with the Council. This will specify the terms in which they will operate, including:

• Agents to always act in a professional, responsible and courteous manner and operate in accordance with current legislation.
• Maintaining accurate records of all action taken and contacting the Council immediately where they identify a resident to be vulnerable. On these occasions they must contact the appropriate senior officer for further guidance. This must be recorded by both the agent and the Council, on the resident’s file.
• They must seek authority prior to the removal of goods from any of the following; Service Lead for Revenues & Benefits, Strategic Lead for Finance or Chief Executive.
• Adopt relevant policies & standards –Equality duties, Data Protection Policy, CIVEA Code of Conduct & National Standards of Enforcement Agent.

Charging Order, Bankruptcy or Committal to Prison

We will only take this action after seeking approval from the Chief Executive or an Officer with delegated powers in accordance with the Council’s Constitution.

We will consider using Charging Orders before bankruptcy or committal to prison provided there is sufficient equity in the property to secure the debt.

Where we have obtained a Charging Order we may apply to the County Court to force sale in order to recover a debt or for bringing an empty property back into use.

Obtaining a charging order does not prevent us from considering other enforcement action to collect a debt.

Before deciding whether any of this action is appropriate the following should be taken into account and documented as part of the submission for approval.

• Reasonable efforts have been made to contact the debtor in person, including visiting them in their home, if appropriate.
• Review an accurate history of the debt and attempts made to recover it.
• Gather sufficient evidence about the resident’s circumstances.
• Assess that there is no realistic prospect of recovering the debt by other means within a reasonable timescale.
• Ensure proper enquiries have taken place into the individual’s personal circumstances, for example; whether there are any known mental health issues or vulnerable dependants.
• Consider information about the past, present, disputed or outstanding benefit/ Council Tax reduction or discount/exemption claims.
• Consider whether the resident’s personal circumstances warrant them being protected from the consequence of this recovery action.
• Consider the consequences in terms of the possible loss of their home, loss of job and the additional financial costs they will incur in addition to what is owed to the Council (forcing sale on a charging order or Bankruptcy).
• Consider the consequences in terms of the possible loss of a person’s liberty if they are committed to prison and impact this will have (Committal to Prison).

We will always send a letter warning the resident of our proposed action at least 28 days before applying to the Court. The letter must include information:

• Warning of the serious consequences of either a charging order, forcing sale on a charging order, bankruptcy, or committal to prison and their continued failure to pay the debt, and
• Urging the debtor to seek independent advice and include details of where they can get local free advice.

(This information must be retained in accordance with the Council’s Document Retention Policy).

Vulnerability

It is important that we (and those acting on our behalf) can recognise when someone is vulnerable and what additional measures we (and those acting on our behalf) may need to put in place to ensure that any person who is vulnerable is treated appropriately. This will also necessitate considering the appropriateness of any recovery action we take.

What does vulnerable mean?

We have not specified any particular groups of people who may be considered vulnerable, as we are aware that anyone can be vulnerable or become vulnerable, on a temporary or permanent basis, due to their personal circumstances. Moreover, we appreciate that people can respond in different ways to the same situation and there are often different trigger points and tolerances to an individual’s ability to cope in a situation. Additionally, their ability to cope can vary depending on the level of support the individual has.

Accordingly we will listen to anyone and establish how best we can support them. Each person will be assisted individually dependent upon their personal circumstances at the appropriate time. To achieve this our staff (including agents acting on our instruction) when dealing with potentially vulnerable people in debt will consider:

• Does the person understand the action being taken?
• What level of support is available or is required to enable the person to understand?
• How can this support be provided to ensure that the person understands?
• Does the person need a referral to the Financial Resilience Team to help them access other support?

Ways we support people who are vulnerable

To ensure that vulnerable people understand that action is being taken it may be appropriate to consider alternative ways of dealing with the situation. Accordingly when dealing with a vulnerable person:

• We will consider the appropriateness of the recovery action. For example; for non-payment of Council Tax we may do a deduction from benefit rather than referring a case to an Enforcement Agent.
• We may put recovery action on hold, to allow the person extra time.
• We will direct people to other sources of debt advice, such as Citizens Advice, Money Advice Service or case working services.
• When appropriate we will discuss a referral to the Financial Resilience team for further support.
• Where a vulnerable person is identified, if necessary and safe to do so, we will either invite the debtor to the Council for an interview, or possibly visit the resident at their home to discuss their debt(s).
• We will work with advice agencies and our Financial Resilience team to agree repayment schedules that are affordable, and recognise a person’s priority debts.
• We will publicise debt advice contact details within our literature on our website.
• Where a resident has multiple debts within the Council we will develop a joint approach for repayment of any debts.
• Where allowed in law or permission is given by the resident we will share data regarding vulnerable people with other interested parties.
• We will ensure that our staff are fully trained and have appropriate skills to identify vulnerability and signpost people to local support agencies and networks.
• We take a proactive approach to engaging with people to try and identify any issues and whether they have any support framework in place. We also encourage anyone to contact us.

It should be noted that the above list is not exhaustive and other ways to support people may be taken where appropriate.

Write offs

Write off is good practice when a debt is irrecoverable or inappropriate to recover. Where they are authorised this is done in accordance with the council’s constitution.

Irrecoverable – These are debts where the Council has no discretion over writing off as they are enforced by legislation:

• Insolvency (bankrupt, liquidation, debt relief orders, etc.)
• Remitted by the Courts
• Time barred

Inappropriate – These are debts where designated officers will have approval to write off under the Council’s constitution:

• There is a case for vulnerability and it is inappropriate to pursue enforcement action.
• The debtor cannot be traced.
• It would not be cost effective to pursue because the debt is too small.
• When the likelihood of payment is balanced against the cost of proceeding.
• Where a person has died and there are no, or insufficient, funds in the estate.

Credits

We will make reasonable efforts to refund balances where there is a credit unless there is another debt with the Council. In these instances, we will transfer the credit to reduce the debt, subject to agreement if the transfer is to a different section of the Council.