2. Dealing with urgent issues
There is usually something that triggers a client in financial difficulties to seek debt advice. Often this is an emergency situation and is the first matter raised by the client with an adviser (the ‘presenting issue’). After the administrative preliminaries have been carried out in accordance with the agency’s policies and procedures (including the Money and Pensions Service (MaPS) common initial assessment, where appropriate – see here), you should always check whether there is an emergency, regardless of whether or not the client has already referred to it. An emergency is a situation that will have a detrimental effect on the client if it is not dealt with immediately. In relation to debt, this is a threat to the client’s home, essential goods and services or her/his liberty. When considering whether goods or services are essential, you should always take the client’s personal circumstances into account.
Examples of an emergency include the following.
•Bailiffs have either threatened to visit the client’s home, or have already visited and have threatened to return and/or remove goods.
•The client is facing the imminent loss of essential goods – eg, if hire purchase goods are about to be repossessed.
•The client is about to be evicted from her/his home.
•The client is about to lose an essential service – eg, her/his fuel supply is about to be disconnected.
•A warrant has been issued for the client’s arrest – eg, for non-payment of a fine.
•The client has been served with a statutory demand or creditor’s petition (see here and here), or other enforcement action has been taken through the courts and there is a deadline for responding. •The client is unable to buy essential items or pay essential bills – eg, because money has been, or is about to be, taken from her/his bank account.
In many cases, immediate action is required and so there is not sufficient time to explore the client’s situation in detail. If you are unable to provide the necessary assistance and/or advice to deal with the client’s situation, you may need to refer her/him to another agency. In other cases, a phone call to the person dealing with the case is usually needed to ask for the matter to be put on hold while you make the necessary enquiries to enable you to give the client proper advice. For example, in the case of credit debts, creditors should allow a 30-day breathing space.1FCA Handbook, CONC 7.3.11R and 7.3.12G. Sections 6-8 of the Financial Guidance and Claims Act 2018 provide for a ‘debt respite scheme’, including a ‘breathing space’ to encourage people in debt to seek professional debt advice. Clients working with a debt advice agency will be protected from recovery and enforcement action by their creditors for 60 days, during which period interest will be frozen. It is understood that debts to central and local government (including council tax arrears) will be covered by the scheme, which is expected to be introduced in 2021. If possible, let the person know when you expect to be able to contact her/him again. Sometimes creditors insist on an offer being made at this stage. Although you should try to avoid having to do so, if necessary you can prepare a ’quick and dirty’ budget on which to base an offer, but should make it clear that this is subject to a full assessment of the client’s financial situation. You should ensure that the client is clear on what action(s) s/he is required to take (if any) and the timescale.
For more information on how to deal with common emergency situations, see here.