Debt Management in a Care Environment

1. Debt Management in a Care Environment David Adams ACIB, AICM. Client Debt Manager

2. We are not alone Debt

3. End of June 2012, unpaid consumer debt held • by collection agencies and debt buyers belonging • to the Credit Services Association stood at • £61.4 billion. • Year on year increase of 18%. A National Problem

4. Debt Management • Application or Order Received • Risk Assessment for Credit Setting • Service Provision • Invoicing • Monitoring Account • Debt Recovery

5. Application for Services/Credit • Commercial • Order for Goods • Request for Credit Received • Local Authority Care • Request for service received

6. Risk Assessment • Commercial • Full credit assessment proportional with the • amount involved • Local Authority Care • Care needs reviewed (chargeable service) • Financial Assessment undertaken (timely)

7. Service Provision • Commercial • Service declined or agreed with credit limit • Generally, no payment - services cease • Local Authority Care • Statutory duty to provide the care • No payment – service will continue

8. Invoicing • Common Ground • Descriptive invoice (please) with settlement date

9. Monitoring Account • Exceptional Invoice – monitor from issue • Routine Invoicing – monitor via exception reports • Automated chaser letters • Telephone reminders • Debt Recovery

10. Effective Debt Recovery Basic Requirements • Sponsorship at Executive level • A robust debt recovery strategy • A trained and sufficiently staffed Recovery Team • The debt recovery role to be understood by • Care Teams and Budget Holders

11. Debt Recovery Strategy • Robust and clear • Action to be proportional to amount and • importance of case

12. Collecting the Debt • Timely action • Old debtors can just fade away • Small invoices can become large debts

13. Recovery • Encourage client/agent to engage and • discuss problem • Debt Recovery/Advice • Telephone • Letters • Visits • Don’t Harass

14. Telephone Calls • Initially very useful • Can allow problems to be aired • Log the call (even if no contact made) • Confirm discussions and agreements (if any) • by letter

15. Letters • Logical order • Reasonable speed • Escalation of severity • Signpost way forward • No empty threats

16. Final Demand • Last letter of sequence • The following must be provided before issuing • proceedings • Provide details of how money can be paid • State the debtor can make contact to discuss • repayment options and provide contact details • Inform debtor free independent legal advice • and assistance is available

17. Pre Legal Action Protocol • Letter Before Legal Action • Maybe best from litigator • Shows escalation

18. Visiting Debtors • Health and Safety – common sense • Area and family • Alone or in twos • Take a social worker • Record where you have gone • End of day check out • Leave receipt for any payment obtained • Raise a meeting note • Write and confirm any agreement

19. Instalment Plans • Reasonable amounts over reasonable periods • Confirm agreement by letter (covered in next slide) • Monitor 1st payment then periodically

20. Instalment Plan Confirmation • Amounts to be paid • Method of payment • When will first payment be received • Subsequent Payment dates • If a payment is missed, all remaining debt • becomes immediately due.

21. Debt Collectors • Office of Fair Trading Guidelines • You are responsible for the actions of your agents

22. The Herts County Council Design Health and Community Services

23. HCS process for residential care debt: HCS pays the Homes net of client contribution Property to be taken into account Non Property client contribution debt

24. Property to be taken into account Income send Closing Statement to Executor and invoice raised. Interest applies 56 days after death on Deferred Payment Agreement Service User dies or property sold – debt crystallises Operations dunning process (chase) for any unpaid invoices. Pay invoice within 21 days, if not then 1st reminder and if still unpaid then 2nd reminder sent Income inform Client Debt Manager who obtains Budget Holders consent. Prepare file for Legal. Call family and inform of legal action option and negotiate regularly. HCS to instruct Legal re Court Action; Legal to lead on guidance through legal process. Client Debt Manager to provide file doc. Client Debt Manager, who arranges Joint Legal meeting (Solicitor, Operations, Business Support Officer/Department/Area Manager, Client Debt Manager) Client Debt Manager monitors results, recoveries and write offs.

25. Property and Non Property case client contribution debt Provider tells HCS 2 months plus client contribution arrears and full effort made to collect HCS pays Gross instead of Net HCS Payments raise arrears invoice and Income arrange monthly invoicing HCS Payments advise Business Support Officer who calls the family when notified by Payments If not resolved the Business Support Officer checks if Safeguarding and Appointeeship/Deputyship options previously looked into. If Appointeeship/Deputyship Client Finance Team pay client contributions in future and try to cover arrears. Informs budget holder Operations dunning process (chase) for any unpaid invoices (pay invoice within 21 days, if not then 1st reminder and if still unpaid then 2nd reminder sent

26. If still unpaid Business Support Officer informs Client Debt Manager, who arranges Joint Legal meeting (Solicitor, Operations, Business Support Officer/Department/Area Manager, Client Debt Manager) HCS to instruct Legal re Court Action; Legal to lead on guidance through legal process. Client Debt Manager to provide file documents Client Debt Manager monitors results, recoveries and write offs.

27. HCS process for debt: Community Based Care and Short Stays Clients invoiced 4 weeks in arrears If not paid by the next invoice date (in case any credit adjustments) then Operations send a 1st reminder 5 days after 1st reminder Operations call the client (3 attempts). Any change to requirement flag invoices in book-keeping

28. If not paid within 3 weeks of 1st reminder, then Final Demand sent by Operations saying to pay immediately or be referred for legal action If still unpaid Operations hand over to Business Support Officer who contact/visit Service User/Agent If not resolved the Business Support Officer checks if previous Safeguarding and Appointeeship/Deputyship options looked into. If required, Appointeeship/Deputyship obtained, then Client Finance Team can pay future invoices and try to cover arrears. Informs budget manager. Client Debt Manager monitors results, recoveries and write offs. If still unpaid Business Support Officer informs Client Debt Manager, who arranges Joint Legal meeting (solicitor, Operations, Business Support Officer/Department/Area Manager, Client Debt Manager) HCS to instruct Legal re Court Action; Legal to lead on guidance through legal process. Client Debt Manager to provide file doc.

29. HCS process for debt: client reasons for non payment and actions required Invoice calculation query Income section resolve with Provider Business Support Officer to resolve with client and Provider Quality of service query Income to resolve and confirm with client Financial Assessment wrong Business Support Officer to find out why and if Appeal made. Possibly Appointeeship or contact Money Advice Unit Client cannot afford it

30. HCS process for debt: client reasons for non payment and actions required Business Support Officer to arrange capacity assessment and possibly Appointeeship Client still unable to understand the invoice after guidance Business Support Officer to explain why should pay and potential consequences of not paying Client refuses to pay in principle Operations unable to make contact with Client/Agent after 3 attempted calls Business Support Officer to make family contact to resolve

31. Litigation • Do you really want to go to court? • Expense • Court cost • Time • Risk • A third party decides

32. Take Legal Action or Not? • Who is the debtor? • Capacity – litigation friend • Can we prove the claim? • Have we done all we can? • Have all genuine queries or disputes been resolved? • Can debtor pay? • ‘A man of straw?’

33. Documents Needed • All documents will be needed for Court Bundles • Complexities of the Bundle will depend on amount • of the Debt and hence the level of the court • Never ever record any unsupported thought or • opinion or anything you would be embarrassed • to have read out in open court

34. We Go To Court • Lose •  pay other sides costs • Win •  will we get paid now?

35. Enforcement • Execution • Third Party Debt Orders (Garnishee Orders) • Attachment of Earnings • Orders to Obtain Information (Oral Examination) • Charging Orders

36. Write-Off • Recommendation but not gift of Recovery Unit • As above for Care Teams • A book-keeping event, debt still exists

37. Thank you for listening