debt management in a care environment david adams acib, aicm. client debt manager

Debt Management in a Care Environment

David Adams ACIB, AICM.

Client Debt Manager

We are not alone

Debt

•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

Debt Management

• Application or Order Received

• Risk Assessment for Credit Setting

• Service Provision

• Invoicing

• Monitoring Account

• Debt Recovery

Application for Services/Credit

• Commercial

• Order for Goods

• Request for Credit Received

• Local Authority Care

• Request for service received

Risk Assessment

• Commercial

• Full credit assessment proportional with the amount involved


• Care needs reviewed (chargeable service)

• Financial Assessment undertaken (timely)

Service Provision

• Commercial

• Service declined or agreed with credit limit

• Generally, no payment - services cease


• Statutory duty to provide the care

• No payment – service will continue

Invoicing

• Common Ground

• Descriptive invoice (please) with settlement date

Monitoring Account

• Exceptional Invoice – monitor from issue

• Routine Invoicing – monitor via exception reports

Automated chaser letters

Telephone reminders

Debt Recovery

Effective Debt RecoveryBasic 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

Debt Recovery Strategy

• Robust and clear

• Action to be proportional to amount and

importance of case

Collecting the Debt

• Timely action

• Old debtors can just fade away

• Small invoices can become large debts

Recovery

• Encourage client/agent to engage and discuss problem

• Debt Recovery/Advice

• Telephone

• Letters

• Visits

Don’t Harass

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

Letters

• Logical order

• Reasonable speed

• Escalation of severity

• Signpost way forward

• No empty threats

Final Demand

• Last letter of sequence

• The following must be provided before issuing proceedings

1. Provide details of how money can be paid

1. State the debtor can make contact to discuss repayment options and provide contact details

3. Inform debtor free independent legal advice and assistance is available

Pre Legal Action Protocol

• Letter Before Legal Action

• Maybe best from litigator

• Shows escalation

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

Instalment Plans

• Reasonable amounts over reasonable periods

• Confirm agreement by letter (covered in next slide)

• Monitor 1st payment then periodically

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.

Debt Collectors

• Office of Fair Trading Guidelines

• You are responsible for the actions of your agents

The Herts County Council Design

Health and Community Services

HCS process for residential care debt: HCS pays the Homes net of client contribution

Property to betaken into account

Non Property clientcontribution debt

Service User diesor property sold – debt

crystallises

Income send Closing Statementto Executor and invoice raised.

Interest applies 56 daysafter death on Deferred

Payment Agreement

Operations dunning process(chase) for any unpaid invoices.

Pay invoice within21 days, if not then

1st reminder and if stillunpaid then 2nd reminder sent

Income inform Client DebtManager who obtains BudgetHolders consent. Prepare file

for Legal. Call family andinform of legal action option

and negotiate regularly.

Client Debt Manager monitorsresults, recoveries and write offs.

Client Debt Manager, whoarranges Joint Legal meeting

(Solicitor, Operations, BusinessSupport Officer/Department/AreaManager, Client Debt Manager)

HCS to instruct Legal re CourtAction; Legal to lead on

guidance through legal process.Client Debt Manager to

provide file doc.

Property to betaken into account

Provider tells HCS 2 months plusclient contribution arrears and

full effort made to collect

HCS Payments advise BusinessSupport Officer who calls the

family when notified by Payments

HCS Payments raisearrears invoice and

Income arrangemonthly invoicing

Property and Non Property case clientcontribution debt

HCS pays Grossinstead of Net

Operations dunning process (chase)for any unpaid invoices

(pay invoice within21 days, if not then

1st reminder and if stillunpaid then 2nd reminder sent

If not resolved the Business SupportOfficer checks if Safeguarding and

Appointeeship/Deputyshipoptions previously looked into.If Appointeeship/Deputyship

Client Finance Team pay clientcontributions in future and try to

cover arrears. Informs budget holder

If still unpaid Business SupportOfficer informs Client Debt

Manager, who arranges Joint Legalmeeting (Solicitor, Operations, Business

Support Officer/Department/AreaManager, Client Debt Manager)



guidance through legal process.Client Debt Manager toprovide file documents

HCS process for debt: Community Based Care and Short Stays

If not paid by the next invoice date(in case any credit adjustments)

then Operations send a 1st reminder

Clients invoiced 4 weeks in arrears

5 days after 1st reminder Operationscall the client (3 attempts). Any change

to requirement flag invoices in book-keeping

If not paid within 3 weeks of 1st

reminder, then Final Demand sent byOperations saying to pay immediately

or be referred for legal action

If still unpaid Operations hand over toBusiness Support Officer who contact/visit

Service User/Agent

If not resolved the Business Support Officer checks ifprevious 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.

If still unpaid Business SupportOfficer informs Client Debt

Manager, who arranges Joint Legalmeeting (solicitor, Operations, Business

Support Officer/Department/AreaManager, Client Debt Manager)


guidance through legal process.Client Debt Manager to

provide file doc.


HCS process for debt:client reasons for non payment and actions required

Invoicecalculation query

Quality ofservice query

FinancialAssessment wrong

Client cannotafford it

Business Support Officerto find out why and ifAppeal made. Possibly

Appointeeship or contact Money Advice Unit

Income to resolve andconfirm with client

Business Support Officerto resolve with client

and Provider

Income sectionresolve with Provider

HCS process for debt:client reasons for non payment and actions required

Client still unable tounderstand the invoice

after guidance

Client refusesto pay in principle

Operations unable tomake contact withClient/Agent after3 attempted calls

Business Support Officer tomake family contact to resolve

Business Support Officerto explain why should pay

and potential consequencesof not paying

Business Support Officerto arrange capacity assessment

and possibly Appointeeship

Litigation

• Do you really want to go to court?

• Expense • Court cost

• Time

• Risk• A third party decides

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?’

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

We Go To Court

• Lose

pay other sides costs

• Win

will we get paid now?

Enforcement

• Execution

• Third Party Debt Orders (Garnishee Orders)

• Attachment of Earnings

• Orders to Obtain Information (Oral Examination)

• Charging Orders

Write-Off

• Recommendation but not gift of Recovery Unit

• As above for Care Teams

• A book-keeping event, debt still exists

Thank you for listening