Stepchange

SpongebobUKBF

Thank you Kirsty.

You have gone a long way towards alleviating my concerns. The idea of a voluntary contribution by a creditor upon receiving a payment as part of a Debt Management Plan is clever one and one that I can live with. I am not so naive that I expect StepChange to be able to raise funds by rattling cans in shopping centres or opening junk shops like other charities!

Your explanation of the "repayment ethic" concerns me a little however. You suggest that repayment solutions are recommended because they have lesser consequences than insolvency.

Even if this were true, what has "ethics" got to do with it? Surely the best advice is the advice that is in the best interests of the client while remaining within the law. I do not see that making repayments is in any way ethically superior than defaulting on one's loans completely and going bankrupt.

There are many situations where a debtor's best interests are served by bankruptcy. Inferring that bankruptcy is in some way ethically inferior to entering a DMP is inaccurate and disingenuous. Indeed, I would suggest that recommending a DMP when bankruptcy would be a more suitable solution is ethically indefensible.

Minkym00

“I do not see that making repayments is in any way ethically superior than defaulting on one's loans completely and going bankrupt”.

That may we be your opinion, but I would counter that the “man/woman on the street” would disagree. If everyone felt that way the credit industry would disintegrate.

SpongebobUKBF

People generally repay their loans according to the terms agreed as it preserves their credit status and facilitates further access to credit.

If they default on a loan, they will suffer the consequences of an adverse credit rating and find further borrowings more expensive or difficult to obtain at all.

I don't see what ethics have to do with credit at all. Credit is simply a business transaction. The likelihood of the debtor defaulting is built into the interest rate charged.

If someone finds themselves in the situation where their debts have got out of control, the advice given should be the most applicable to that situation in a completely non-judgmental manner. If that involves bankruptcy rather than a DMP so be it. The general well-being or otherwise of the credit industry is of supreme irrelevance when giving appropriate advice to an individual person.

It has been many years since defaulting on a loan has been deemed unlawful.

debt_doctor

SpongebobUKBF wrote: »

People generally repay their loans according to the terms agreed as it preserves their credit status and facilitates further access to credit.

If they default on a loan, they will suffer the consequences of an adverse credit rating and find further borrowings more expensive or difficult to obtain at all.

I don't see what ethics have to do with credit at all. Credit is simply a business transaction. The likelihood of the debtor defaulting is built into the interest rate charged.

If someone finds themselves in the situation where their debts have got out of control, the advice given should be the most applicable to that situation in a completely non-judgmental manner. If that involves bankruptcy rather than a DMP so be it. The general well-being or otherwise of the credit industry is of supreme irrelevance when giving appropriate advice to an individual person.

It has been many years since defaulting on a loan has been deemed unlawful.

That's got my vote.

DD

sourcrates

SpongebobUKBF wrote: »

People generally repay their loans according to the terms agreed as it preserves their credit status and facilitates further access to credit.

If they default on a loan, they will suffer the consequences of an adverse credit rating and find further borrowings more expensive or difficult to obtain at all.

I don't see what ethics have to do with credit at all. Credit is simply a business transaction. The likelihood of the debtor defaulting is built into the interest rate charged.

If someone finds themselves in the situation where their debts have got out of control, the advice given should be the most applicable to that situation in a completely non-judgmental manner. If that involves bankruptcy rather than a DMP so be it. The general well-being or otherwise of the credit industry is of supreme irrelevance when giving appropriate advice to an individual person.

It has been many years since defaulting on a loan has been deemed unlawful.

debt_doctor wrote: »

That's got my vote.

DD

Mine two.

Quite refreshing to see a view expressed on how the system actually operates, instead of the much distorted moral viewpoint some seem to have, money and morals make very uneasy bedmates.

WhenIam64

Could you also not say that giving the correct advice for a client in hardwired into the system by the FCA rules. So companies like SC have to show adherence to the rules, be audited against the rules, to show training to a standard that meets the FCA rules, and be insured if something goes wrong.

On the other hand, if you give money "advice" on MSE you don't have to do any of these things.

Minkym00

But you’re only considering those bankruptcies that are declared due to someone incurring unaffordable credit. What about the ethics of not being able to pay your self assessment tax because you’ve spent it living beyond your means? What about the ethics of not paying your debts that consequently leave someone else in financial distress?

You’re being too simplistic. People declare bankruptcy for all sorts of debts. Stepchange need and do consider all aspects of someone’s debts. Ethics should come into it or we all suffer the consequences.

SpongebobUKBF

Minkym00 wrote: »

But you’re only considering those bankruptcies that are declared due to someone incurring unaffordable credit. What about the ethics of not being able to pay your self assessment tax because you’ve spent it living beyond your means? What about the ethics of not paying your debts that consequently leave someone else in financial distress?

You’re being too simplistic. People declare bankruptcy for all sorts of debts. Stepchange need and do consider all aspects of someone’s debts. Ethics should come into it or we all suffer the consequences.

I disagree.

If someone is insolvent they are insolvent. How they arrived at that position should have no bearing on the advice given to help alleviate their situation.

It is no good advising an alcoholic that they should never have started drinking. Or that they should have stuck to drinking sensibly.

A person is where they are. A good advisor will help formulate a plan to enable that person to move on with their life. The starting point is here and now - not where we would prefer it to be.

Minkym00

But ethics do come into it if bankruptcy is the option someone takes. The OR will assess a bankrupt’s conduct and make a judgement as to whether or not a bankruptcy or criminal offence has been committed and/or their conduct warrants further investigation. Someone’s pre-bankruptcy conduct could see them end up with a 2-15 year BRO or a criminal record. So anyone giving advice should, and indeed must, consider this when giving advice as to whether an IVA or bankruptcy is the most appropriate route.

WhenIam64

There's a lot of theory and opinion from a low post count poster. Perhaps if he/she sticks around to give other posters the benefit of his/her insight, we can better judge the value of the postings so far.