Bassetlaw District Council/A1 Housing
Code of Practice
for the Fair Repayment of Debt

1. Background
   1. This Code of Practice sets out the approach to be taken of Bassetlaw District Council and A1 Housing when dealing with arrears of: -
      • Council Tax
      • Rent (current and former tenant)
      • Business Rates
      • the A – Z of Sundry Debts raised by the Council and A1.
   2. The Code follows from the principles of the Councils Debt Management Strategy and the A1 Housing Income Management Strategy.
   3. These documents dictate that we will deal with people who owe arrears fairly. To this end, both Bassetlaw District Council and A1 Housing will apply consistency of treatment and we will regard the involvement of the Basssetlaw CAB and similar organisations as essential in helping customers to pay their way yet manage their other priorities.
   4. This Code of Practice aims to ensure that the collection of Council/A1 debt is undertaken in a consistent manner, which is humane, firm and fair, whilst ensuring that it distinguishes between those who cannot and those who will not pay.
2. What this covers and when it should be used
   1. This Code of Practice applies to all debts owed to BDC/A1 and will apply whether or not a customer owes just the one debt or multiple debts to BDC/A1.
   2. BDC/A1 will adopt a co-ordinated approach to the collection of debts. Non-rent debt collection is centralised at BDC in the Revenues and Benefits service. Revenues and Benefits and A1 staff must apply the principles of this Code of Practice. These employees plus representatives of the Bassetlaw CAB are termed “debt advisers” for the purposes this code. Bassetlaw CAB has a Service Agreement with BDC covering debt issues.
   3. Debt advisers should apply this Code of Practice whenever:
      • a customer tells us they would have difficulty meeting a payment arrangement that BDC/A1 has suggested
      • a customer, or their representative, requests it.
   4. This Code of Practice does not automatically stop any action already taken by BDC/A1 to make payment deductions direct from source, i.e. Attachment of Earnings Order or Deductions from Benefits. As such, attachments in force or capable of use should be treated as priority expenditure when calculating disposable income. However, should such action cause severe financial hardship the Council and A1 may consider alternative payment arrangements.
   5. This Code of Practice does not detract from any legal obligations that BDC/A1 may have to protect their position against debtors who do pay their debts as they become due. In other words, fair arrangements to clear a debt over a period may be subject to the usual recovery action through the court together with reasonable costs, but no advanced recovery taken where payment is adhered to.

      Provided that the debtor keeps up the repayment agreement – see section 6 – and pays current liabilities on time, debt advisers at BDC/A1 should not take any further action to recover the debt. In the event that the debtor does not keep up the repayment agreement, and subject to due notice under Section 3 of this Code, debt advisers may take the next appropriate step in recovering the debt as stated in Section 7.

   6. This Code of Practice is for arrears of debt. It follows that debtors must ensure that they maintain payment of any ongoing liability (i.e. Council Tax future monthly instalment, weekly rent). Debt advisers must give customers in arrears the opportunity to agree a repayment level that would meet the current weekly liability by treating that sum as an expense. This will include a sum that would be enough to clear the arrears by the end of the financial year. In each case, the debt advisers must be satisfied that this is a realistic and affordable repayment for the customer. In situations where it is clear to the debt advisers that either:
      • the repayment level is not realistic
      • the customer, or their representative, tell us they cannot afford the amount, or
      • the customer receives means-tested benefits
      Then debt advisers will apply payment against the relevant sum from disposable income (see appendix) – no matter how long it takes us to recover it. The payment arrangement will include the full weekly liability as well as a payment towards the arrears.
   7. Each debt adviser will have a lead officer. This is to make sure we co-ordinate debt collection, as far as possible, within the limits of Data Protection law. BDC/A1 will provide all debt advisers with training, assisted by CAB to use this Code of Practice.
3. Communication
   1. BDC/A1 will encourage people with debts to contact BDC/A1 or the Citizen’s Advice Bureau (CAB) at the earliest possible stage of debt recovery.
   2. BDC/A1 will inform people with debts how they can get independent advice and give clear information in a variety of formats about all aspects of collection and debt recovery.
   3. BDC/A1 will advise people with debts that we will collect any debts in line with the principles of this Fair Repayment Code.
   4. BDC/A1 will review payment arrangements, where we are notified of a change in the customer’s circumstances or when we are asked to do so by a customer or their representative.
   5. BDC/A1 will give customers information about the steps we will or may take – and the legal process of debt recovery - and will make this widely available.
   6. BDC/A1 and the CAB can ask the customer to sign an agreement, which sets out the amount of repayments. The Council and A1 will send the customer a letter confirming the details of the arrangement made, including instalment amounts details of payment methods and dates.
4. Money Advice
   1. BDC/A1 will with the assistance and direction of the Bassetlaw CAB offer money advice to all customers who we know have more than one debt. We can do this by offering:
   2. • a booklet that will give them advice on handling their debts
      • telephone advice
      • personal advice through an appointment with the CAB or an appropriate external advice provider.
5. Collection and Recovery of Debts
   1. BDC/A1 will provide convenient methods for customers to pay off debts and will make sure they have access to payment facilities without charge.
   2. If a customer misses a payment, BDC/A1 will take action as soon as possible to recover the debt not paid and will explain in writing, telephone or e mail/ text (with permission) the options available which primarily will be to allow reasonable time to catch up.
6. Repayment Levels
   1. BDC/A1 and the CAB will negotiate with customers on repayment levels. Debt advisers will take into account recommendations from recognised money advice agencies when setting repayment amounts.
   2. BDC/A1 will agree levels of repayment, based on a Repayment Chart, that takes account of the customer’s income and priority/essential spending – see Appendix. 1 BDC/A1 will review the repayment we charge at least annually.
   3. Debt advisers will not include disability benefits and any payments under the War Pensions Scheme when calculating the amount of disposable income
   4. When calculating priority/essential spending we will take the following in to consideration:
   5. • Rent / Mortgage payments
      • Utility Bills (including telephone)
      • Council Tax
      • House-keeping
      • Travel (work and school)
      • School Dinners
      This is not an exhaustive list and debt advisers will always take consideration of individual circumstances.
      Priority/essential spending will not include:
      • Satellite Television
      • Credit Card
      • Catalogue
      This is not an exhaustive list and debt advisers will always take consideration of individual circumstances.
   6. Where customers owe three or more debts to the BDC/ A1 we will take this into account and may agree to accept lower repayments than those set out in the Repayment Chart. . We will also consider reasonable payment obligations to other creditors.
   7. We will continue to use this code even if, in the past, the customer has not kept to the arrangements that have been made under this code. However, if the customer continues to breach the arrangements, the Council and A1 will take further action to enforce the repayment of the debt.
   8. We will enquire about savings and attempt to assess repayment including the customer’s savings to reduce an unpaid debt but we will make exceptions for good reason.
   9. In cases of non-priority debt, debt advisers may need to accept lower payments than the minimum in the repayment chart. This will apply where a financial statement and pro-rata distribution results in a figure lower than the minimum.
7. Recovering Debts – the next step
   1. BDC/A1 will keep our use of bailiffs and debt collection agencies to a minimum, and our own staff will collect all debts, at all stages, for as long as this is practical.
   2. BDC/A1 will consider other ways of recovering debts before handing them over to bailiffs or collection agencies. This includes attachment of earnings or making direct deductions from benefits.
   3. All bailiffs and agencies that the BDC/A1 appoints to collect debt will work within the existing Codes of Practice.
   4. In extreme cases, usually relating to non-compliance and multiple failure to make or maintain payment, and where all other options have failed, BDC/A1 will take advanced recovery action to assist in the recovery of unpaid debt. This may include Committal to Prison, Insolvency and Possession action. Any costs associated with such action may be passed on to the customer concerned.
8. Customer Care
   1. BDC/A1 will collect debts in a sympathetic and efficient way, and will consider the personal circumstances of each customer.
   2. BDC/A1 will encourage debt advisers to use their professional judgement in debt collection and, where the customer agrees, will consider the full financial and personal circumstances of the customer when we carry out our collection.
   3. BDC/A1 will fully advise customers with debt problems about all DWP and Inland Revenue benefits and how to get advice about their entitlement. This is part of our commitment to promoting the take-up of benefits. We will work with CAB to deliver this advice
   4. BDC/A1 will suspend steps to recover debts if a benefit claim, reconsideration or appeal could result in the customer clearing the arrears in full.
9. Costs
   1. Wherever there is a real alternative, we will avoid taking steps to recover debts where the cost of these imposes extra debts, for example bailiff and court costs.
   2. Where we are able to influence the level of costs, we will make sure we set a reasonable level that reflect what we have had to pay.
10. Monitoring quality
    1. BDC/A1 will make sure that we encourage people to make comments, complaints and suggestions to improve the way we handle and collect debt.
    2. BDC/A1 will continue to learn from the best practice of other debt collection organisations and advice agencies.
       BDC/A1 will review the use of this Code of Practice after six months of introducing it and every year after that. We will do this in consultation with stakeholders, elected Members and A1 Housing Board.
11. Repayment guidelines
    1. All debt advisers must use the standard Repayment Guideline Chart in the Appendix. We will usually decide the level of a customer’s disposable income by a financial statement that sets out income and spending. Where the customer receives means-tested benefits - other than Tax Credits - we won’t need a financial statement and will use the standard minimum deduction. A list of means-tested benefits is in the Appendix.
    2. While the Repayment Chart gives guidelines, it does not restrict employees from making agreements with customers that fall above or below the figures in the Chart. This can be done where reasonable or with the customer’s agreement.
    3. Debt advisers should be prepared to accept less than the repayment levels in the Chart, as long as a customer can show that there is a good reason for this.
    4. The Repayment Chart can also help employees to assess any offer made by customers to repay far more than the levels in the guidelines. This could prove to be an unrealistic offer that the customer would be unlikely to be able to keep up.
12. Data Protection
    1. Any information received in connection with this policy to assist BDC/A1 in the collection of debts will be treated with strict confidentiality. The information will be shared with those departments within either BDC or A1, in accordance with our joint corporate debt strategy and will be used solely to aid debt collection.
    2. The information provided may be shared with the police and other public bodies for the purposes of the prevention or the detection of fraud or the prevention or detection of crime as permitted under the Data Protection Act 1998.
    3. In the event of a debt being referred to an agent of BDC/A1 information may be disclosed in certain circumstances where it will aid debt collection.