Understanding the range of help available to debtors is essential for two reasons. Firstly, it prepares us to act against any adversity (sensible in a vulnerable economy) and secondly, it allows us to contribute to outcomes that are fair to the consumer. The latter is important because when we stigmatise debtors, we create conditions that are ripe for abuse.
Collectively, we owe around £1.5 trillion in personal borrowing – per capita, that’s about 122% of average earnings. When you increase the availability of credit as we did over the first decade of the millennium, it follows that you increase the extent of indebtedness. To be a debtor is no longer extraordinary, yet to share the experience openly remains taboo.
Reliable debt help can be elusive in the UK – it is all too easy to profit from shame. “On their heads be it,” you may say, “debtors are irresponsible”, but for every penny that is diverted into profit, we pay the price. Yet, who is without profit-motive in the incentive to repay?
Impartial money advice is least likely to prevail within the vulnerability of indebtedness. From the politician who seeks election, to the charity that needs funding, the business that must be viable, professionals who protect their employment, the lender who earns interest and the borrower who seeks relief, we all have a stake in failed credit agreements.In Who Pays for Debt help? we advised that “UK debt professionals have four months to come up with a workable plan to provide a consistent standard of debt help – specifically for Debt Management Plans”. Isn’t it time you had your say?
We’ll be blogging more on funding for debt help and the Debt Management Protocol over the coming weeks and welcome your comments.