Well naturally you’d expect me to say friend… yes really! We know that there were thousands of people who having reached crisis point, were helped to straighten themselves out by adopting Debt Management Plans that they were comfortably able to maintain, therefore avoiding the stressful debt collection processes, un-necessary and expensive legal action, as well as likely further costs and even potential loss of habitat. But if further proof were needed that everyday working people are still struggling to survive then the news that people claiming hardship to payday loan companies has risen by 42%, that’s according to statistics recently released by StepChange.
There is no ignoring the current financial environment, not really the age of Aquarius but most definitely the age of austerity, with many people still caught in a cycle of debt with no visible way to get out it unless they seek help from their creditors or use the services of a Debt Counsellor to mediate. Back to my opening line, I would definitely say friend and when I look back at the structure and uniformity that the debt management industry have collectively introduced, The Common Financial Statement, Trigger Figures, the 30 day breathing hold, all of which are designed to make the transition to a Debt Management Plan simple and clear for debtors and creditors alike. As a creditor, you know exactly where you are once a Debt Management Company (DMC) has been instructed. If there was one thing lacking before the growth of DMC’s, it was clarity and any kind of real understanding of how difficult some debtor’s circumstances were.
Collector avoidance was the popular method of dealing for people unable to offer any form of solution and this helped no-one. ‘Friend’ would be the natural response when you think about the regular payments that the DMC sends. Regular monthly payments payable on an agreed date allow the creditor to set the debt into a plan that can run in the background with no labour intensive processing needed. Furthermore, you have a guaranteed point of contact, one where a grown up answers and knows precisely what you are talking about. No games, no stalling or pretending not to know what you are calling about and they will know the current situation regarding their customers account and be happy to share that with you.
I could possibly even say ‘friend’ when talking about those DMC’s that charge an ‘appropriate’ fee for their services, consequently reducing the available income to creditors …..(Pause for roar of disagreement!!) But because they have an excellent record of ensuring payments are made and create a lower than average default rate, this again benefits the creditor in the long run. Better a little of something than nothing at all! The same cannot be said for some plans where the debtor maintains it themselves, these tend to result in a higher default rate as well as being process heavy with high costs to manage. And of course I would lean toward ‘friend’ when I talk about communication and data. Much analysis is undertaken by the debt management industries and in particular the non fee paying sector, to gain greater understanding of root causes and future areas of concern, information which is often useful to creditors and credit providers alike. So can I say foe? Well I could if I took a blinkered view and looked at the matter from purely the creditor’s side, and from various forums, I know there are still some creditors who do see DMC’s as the enemy.
They perceive them as an obstacle to getting payment, believing that they would successfully wrestle the full payment and more if only given the chance. However, those of us who treat people as we would wish to be treated, know this to be utter nonsense and that offering debtors the chance to pay back incrementally at a rate that allows them to eat, can only be to the good of any company’s bottom line as some payment is better than no payment at all!