Vulnerability And Debt

Vulnerability and in Debt? – What You Need to Know

The debt collection process and vulnerability often go hand in hand. One of the most pressing issues in the money advice industry today is working with vulnerable clients. By definition, these are people who have experienced very difficult circumstances, and helping them can be extremely challenging.

Money troubles bring about a range of negative emotions and personal hardships that require excellent care and service. After all, people don’t try to negotiate with their creditors when things are going well; they look for help because they’ve encountered sudden—sometimes permanent—problems in their life. It’s needless to say that such change is very upsetting.

The situation can become exacerbated for vulnerable customers when debts reach the stage at which enforcement agents become involved or if the debt becomes subject to civil enforcement,

What is Considered a Vulnerable Person?

So how do we go about defining who is considered vulnerable when it comes to debt and what can advisors do to ease the strain clients are going through? According to the debt charity Step Change, a definition of a vulnerable person in regard to debt is somebody who struggles to cope with their debt problem due to personal or financial reasons.

The FCA has also published guidelines for vulnerable customers

Vulnerability can come from a variety of sources, such as stress, the death of a loved one, mental health problems, long-term illness or disability. Other causes include separating from a partner, homelessness and addiction. These experiences can make people feel helpless and alone.

The underlying emotions caused by debt often prevent people from actively trying to get help. Some worry about being judged, embarrassed, or feeling negative in general if they reach out for assistance. They might also feel that the person they talk to won’t be considerate of their situation or empathetic enough to understand them.

It’s a matter that requires sensitivity and tact, and an understanding that vulnerability is a serious consideration. While the vulnerability of an individual has always been important in the context of giving good debt advice, the industry is now under a greater obligation than ever before to ensure that vulnerability considerations are at the heart of client engagement, and constantly reviewed and reassessed throughout the client’s journey. 

Vulnerability and Debt Matters

The Money Advice Trust has recently published some vulnerability guidance to help debt agencies and money advice industries ensure they are catering optimally to their vulnerable clients and offering fair treatment and support. The guidance builds upon the increased focus on vulnerability and debt within these respective industries.

The Trust found in a survey by the Money and Mental Health Policy Institute that action is needed to be taken by advice agencies so they can improve the way they address clients with mental health conditions. Out of all respondents, 35% stated their advisors didn’t take into account their disclosed mental illness which is quite worrying.

If industry professionals took a more cohesive approach, it would benefit everyone greatly; however, there are also many things individual advisors could do to better help vulnerable clients too.

It’s essential to build positive relationships with clients, which begins with having the right attitude. Those who are vulnerable need to know that their concerns will be met with care and empathy. Furthermore, they should never feel judged by their advisor.

How Become Debt Free Can Support You

At Become Debt Free, our clients always come first. We have a set of values that guide us to demand a caring and compassionate approach at all times. We work hard to be non-judgmental in our attitude too, as many of our clients suffer from mental and physical health issues. To better address these issues, we’ve undertaken some initiatives specifically designed for vulnerable clients.

For example, we trained staff members in identifying vulnerability and people who are potentially vulnerable. Our staff have been provided techniques to identify those in need of help and offer the best possible support. More training is planned for later this year on this subject. Our teams will always ask clients who are vulnerable if they’re happy for their vulnerability to be recorded and reported so that the totality of their circumstances is acknowledged, communicated and taken into consideration at meetings with creditors.

With the rising awareness of vulnerability, it’s crucial to be informed on how best to address the issue. Here at Become Debt Free, we assure you that our team will treat your concerns with care and empathy. If you’re struggling with debt or vulnerable in any way, please don’t hesitate to reach out today.

The Right Debt Solutions for You

Whether or not you are in a vulnerable situation, we will give you all the time and patience you need to discuss your current situation and give full advice on all of the options suitable to your own situation. This could by any debt solution from a Debt Relief Order, Bankruptcy, an Individual Voluntary Arrangement (IVA) or a Debt Management Plan. Contact us today on 0113 237 9503 or complete the online form.

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Tel: 0113 237 9500

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Customers can get free debt advice from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt. For more information from the Money Advice Service visit MAS is part of the Money & Pensions Service. We are not affiliated with MAS in any way.

Become Debt Free is a trading style of Re10 (Finance) Limited Registered Number 04651137.  Data Protection Act Registration Number – Z8613095

Become Debt Free specialise in providing and administering Individual Voluntary Arrangement (“IVA”) solutions to individuals based in England, Wales and Northern Ireland.  We do not administer Debt Management Plans, Debt Relief Orders, or any other debt solutions.  We only provide advice after completing or receiving an initial fact find where the individual(s) concerned meets the criteria for an IVA, therefore, all advice is given in reasonable contemplation of an insolvency appointment.

* To qualify for debt write off in an IVA with us, you must have a minimum of £7,000 of qualifying unsecured debt owed to two or more creditors.  The amount of debt write off is based on your own personal circumstances – typically this could be up to 85% of what you owe; and this has been achieved by over 10% of our customers who have successfully completed their IVA’s in the last 12 months.  The amount of debt write off differs for each customer and is dependent upon their individual financial circumstances and subject to the approval of their creditors.

Andrew Bowers is authorised in the UK to act as Insolvency Practitioner by the Insolvency Practitioners Association.


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