3. Stage 3: check liabilities
When a client comes to an advice agency with a debt problem, one of the first things an adviser should do is check whether the client is liable for the debt they are presenting.
A liability only exist if the client:
•has entered into a valid contract – eg, bank loan, credit card, HP agreement, mortgage, secured loan;
•must pay it under legislation – eg, council tax, national insurance, income tax;
•has a court order – eg, fines, decision, decree, summary warrant.
The client is not responsible for other people’s debt unless they entered into an agreement (eg, as a guarantor).
As in all areas of advice, sometimes the issues are quite complex, and advisers should always seek help before any action is taken if they are unsure.