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TitlePersonal Insolvency Law in England and Wales: Debtor Advice
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Page 1

Personal Insolvency Law in England and Wales:
Debtor Advice, Debtor Education and the Credit
Environment


Volume I



John Tribe and Leyanda Cocks









ISBN No. 1-872058-19-1/ISBN-13: 978-1-872058-19-1 Kingston Business School
Date: July 2007 Kingston University
Occasional Paper Series No 62

Page 67

Chapter 6 Debtor Education

© Centre for Insolvency Law and Policy, Kingston University 2007. 49

2. Debt Free Direct (8%)

3. Consumer Credit Counselling Service (7%)

4. PayPlan (4%)

5. National Debt Line (3%)

• Almost 80 percent of respondents wished they had sought debt management advice sooner.

• 75 percent of respondents thought that financial responsibility should be taught between the
ages of 15 and 18 with almost 50 percent stipulating an age range on 15-16.

• 87 percent of respondents considered themselves to be more financially aware post
insolvency.

• Respondents’ suggestions for improving financial awareness and increasing consumer
responsibility were primarily focused on better education and tighter controls on credit
facilities.



6.4.4 Fees



Respondents were asked two questions in relation to fees: if you contacted a charity or debt
solution company did they charge a fee?; if so, how much was it?

In relation to the first question respondents appeared to be confused as to whether certain
debt solution companies charged fees or not. For example, out of the 6 respondents who
contacted Debt Free Direct, 4 claimed not to have been charged a fee whilst 2 stated that they
had been charged. Equally, 2 PayPlan clients claimed not to have been charged a fee whilst
another stated that he or she had been charged.

The sample of debtors who responded is very small and not of statistical significance, but it is
indicative that a degree of confusion exists. It is suggested that it would prove useful to
creditors and potential regulators alike to investigate whether this confusion is more
widespread.

In relation to the second question, the results were very small in number and cannot be used in
the main report as there was no stipulation as to the frequency of the charges. Respondent
answers are included however in the full dissemination of results contained in Volume II:
Appendices and Bibliography at Appendix X.

Page 68

CILP –Insolvency Law of England and Wales: Debtor Advice, Debtor Education and the Credit Environment.


© Centre for Insolvency Law and Policy, Kingston University 2007. 50

6.5 The Workshops





‘Individuals need to understand budgeting, and the downside of credit and its consequences.’

P Boyden, ‘Living on Tick: The 21st Century Debtor’ PriceWaterhouseCoopers (2006).





6.5.1 Creation of a workshop syllabus



The object of the workshops was to give participants the tools necessary to better understand
their financial situation, and make more informed choices as a result. To do this we divided the
workshops into seven units that would enable participants to assess their current attitude
towards their finances, teach participants the essential skills required to successfully plan and
manage their finances and also help them maintain their financial awareness.

The seven units are discussed below.



Unit 1: Financial Personality Test

The Financial Personality test was designed to help debtors identify their strengths and
weaknesses when it comes to financial awareness and management.

It is important to identify attitudes towards debt in order to focus on the areas that need most
attention. It may be that individuals have very good knowledge of financial terms and issues,
but lack the skills to implement these to their best advantage.



Unit 2: Financial Planning

This unit highlighted the importance of effective financial planning and management by
discussing the importance of prioritising purchases and bill paying. It also introduced the
effective use of goal setting.



Unit 3: Creating Personal Plans

Attendees were introduced to the importance of creating personal plans that are tailored to the
financial needs of their family taking into account income and essential outgoings.

Two versions of a budget calculator were included in the workbooks: one simple, and one more
complex.

Page 133

Chapter 15 Recommendations

© Centre for Insolvency Law and Policy, Kingston University 2007. 115

Ch ap t er 1 5



Recom m en d a t ion s





Deb t o r Ad v ice



6. Re-focus on the i n so lv en t as the fundamentally paramount stakeholder.

7. Tig h t e r co n t r o l of marketing.

8. Recognition by insolvency practitioners that they, as professionals, must m o n i t o r any

juristic person they are connected to.

9. Rev iew the status of the not-for-profit debt advice providers.

10. St an d ar d i sat io n of practice and documentation across the industry.



Deb t o r Ed u cat io n



4. I n cr ease financial awareness workshop promotion across all demographics of society.

5. Investigate co m p u l so r y at t en d an ce of such workshops as a pre-condition of discharge

from personal insolvency procedures.

6. Introduce ear ly st ag e f i n an ci al ed u cat i o n across the UK.



Cr ed i t En v i r o n m en t



5. Continued growth in collaboration between creditors, in terms of better positive and

negative d at a sh ar i n g .

6. Give creditors the ad d i t i on a l f in an cia l i n f o r m at i on necessary to make better

informed lending decisions.

7. Recognition of d eb t o r r esp on sib i l i t y .

8. Introduction of m on ey m an ag em en t t eam s within credit institutions, specifically

targeting those individuals who are less financially literate than their peers and giving

them advice without prejudice.

Page 134

CILP –Insolvency Law of England and Wales: Debtor Advice, Debtor Education and the Credit Environment.


© Centre for Insolvency Law and Policy, Kingston University 2007. 116













‘The unluckiest insolvent in the world is the man whose expenditure is too great for his
income of ideas.’



Christopher Darlington Morely (1890 – 1957)

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