MSE: Guest Comment - The importance of impartial debt advice

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"Access to free, independent debt advice for anyone who needs it has never been more important in these tough times ..."

Read the full story:
Guest Comment: The importance of impartial debt advice

chattychappy

We believe that a levy on the finance industry is the way to ensure sustainable future funding for this vital service.

Seems great - let's hit the nasty old banks again. This is a levy which will ultimately be passed onto the responsible majority.

I'm not unsympathetic to the need for debt advice, but if essential it should be financed through normal taxation - but better through charity (or sites like this one).

We are constantly hitting business with extra regulation, taxes, duties and other impositions. We can do without this one. However well meaning, it is a stealth tax. Once imposed, it will nudged upwards year-by-year as the inefficient quango it finances forever expands its scope.

lemonjelly

chattychappy wrote: »

We believe that a levy on the finance industry is the way to ensure sustainable future funding for this vital service.

Seems great - let's hit the nasty old banks again. This is a levy which will ultimately be passed onto the responsible majority.

I'm not unsympathetic to the need for debt advice, but if essential it should be financed through normal taxation - but better through charity (or sites like this one).

We are constantly hitting business with extra regulation, taxes, duties and other impositions. We can do without this one. However well meaning, it is a stealth tax. Once imposed, it will nudged upwards year-by-year as the inefficient quango it finances forever expands its scope.

At the same time, how about if through such a levy, the banks have less debtors avoiding payment, increased incomes through repayments being made, reduced need for enforcement action/recovery (which again reduces their ongoing costs), which leads on to reduced pressures on the county court service as a tool for debt recovery, thus saving the taxpayer money...

The banks need to take on a greater responsibility in their lending. Likewise, debtors need to take on increased responsibility with their borrowing & repaying. However, this is simple to say with the benefit of hindsight. We are where we are. People have been able to borrow hand over fist for years, and are way out of their depth at the moment. They arguably shouldn't have borrowed so much. Equally, the banks shouldn't have lent them so much either. In these situations, these people need prper structured advice and support to clear their debts.

Fee charging debt management firms aren't the answer. Debtors could feel that it ceases to be their problem when they hand over all the paperwork. How will they learn the repercussions from something like that?

And one other point, if you have debts, why pay someone to sort it out? Surely it makes more sense for all your spare cash to be going towards clearing those debts, rather than to a fee charging debt management firm?

davidgmmafan

I totally agree with post 3 and the bit from the CAB about free impartial debt advice being important. I'm less convinced of the levy as it would hit everyone...

But what really interests me is how does the banking industry view defaults and bad debts? Sometimes they can be so unhelpful its almost as if they have a vested interest in having some... Surely this can't be the case? Anyone have any expertise on this?