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FCAWA 2011 CONFERENCE

FCAWA 2011 CONFERENCE Coming Together is a Beginning. Keeping Together is Progress. Working Together is Success . Bulk Debt Negotiations Dennis Nelthorpe OAM-Footscray Legal Centre. Whose Rules Rule? National Bulk Debt Project. Denis Nelthorpe, West Heidelberg CLS

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FCAWA 2011 CONFERENCE

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  1. FCAWA 2011 CONFERENCE Coming Together is a Beginning. Keeping Together is Progress. Working Together is Success. Bulk Debt Negotiations Dennis Nelthorpe OAM-Footscray Legal Centre

  2. Whose Rules Rule?National Bulk Debt Project Denis Nelthorpe, West Heidelberg CLS Julie Maron , Legal Aid NSW Aimee Cooper, Victoria Legal Aid September 2011

  3. Why “bulk debt”? • Centrelink recipients – no assets • Multiple problems including: • Homelessness or threat of eviction • Mental illness • Illness and chronic ill health • Alcohol and drug addiction • Clients with serious social problems and some associated debt • Not Debtors with associated social problems

  4. Bulk Debt – the Rules • Purpose of Centrelink Payments • Keep a roof over head! • Keep food in the fridge! • Keep the lights on! • Centrelink Income is Protected • Section 60 Social Security (Admin) 1991 • Section 12 JDRA (Vic) • Best Practice in Debt Negotiation • Effective and efficient use of resources • Financial Counselling is a valuable resource

  5. Whose rules rule? Financial Counsellors are subject to rules from: • Governments, Regulators, Ombudsman • Creditors and Debt Collectors • Hardship teams • Community Agencies + Funders

  6. When the rules won’t work… • Periods of Hardship – internal accounting definitions • Prudential definitions of hardship – an urban myth - Unrelated to client hardship • Capacity to negotiate – are they “allowed”? • Working to a script – Don’t participate

  7. …play by your own rules! • A Financial Counsellor is entitled to expect: • A competent negotiator – two way discussion • A knowledge of hardship + Centrelink Refuse to negotiate with unqualified staff • Seek a manager or IDR

  8. Your rules are not made to be broken! • Provide an authority once - only • Refuse to provide unnecessary information • Financial profiles are often unnecessary – refer to SACOSS statistics on costs of living • Centrelink Statements contain required information.

  9. Bulk Debt 2.0 • 12 months expanded project • WH CLC, VLA, NSW LA • National collection through website • 450 Agencies and workers registered to participate

  10. National Bulk Debt Project creditors A total of 1494 debts collected = $7.4 million • Credit Corp 242 debts • Baycorp 240 debts • GE Finance 353 debts • ACMS 182 debts • Telstra 341 debts • AGL 126 debts

  11. National Bulk Debt Project Centrelink Recipients • Aged Pension 11% • Carers 5% • DSP 41% • Newstart 20% • Parenting 18% • Other Centrelink 5% • No income 2%

  12. National Bulk Debt Project Progress Report - ?

  13. National Bulk Debt Project Next Round of Collections • Likely to begin in late February 2012 • Concentration on Banks: • CBA + Westpac • Citibank + HBSC • Debt Collection companies: • Collection House – Lion Finance • Utilities –May depend on funding + partners: • Origin + TXU • Optus + Vodafone

  14. www.bulkdebt.org • From 30 June 2011 until 30 July 2012 • Website looks like this:

  15. Our rules for other debts • EDR financial hardship submissions • Application to EDR based on financial hardship • Acknowledgement Centrelink income protected • Acknowledgement client can’t pay • Finding that it is not fair or reasonable to continue to contact the debtor • Creditor required to advise any debt-buyer • Limit contact with the debtor - only to determine whether their circumstances have changed

  16. Bulk Debt – The Rules • Expect respect! • Provide information with integrity • Act in the best interests of your client • Be in it for the long haul!

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