Collections agencies in the UK have agreed not to chase debts for 30 days when debtors seek advice from accredited debt management companies.
The 30 day breathing space, agreed between the Department of Business, Enterprise and Regulatory Reform (BERR) and the Credit Services Association (CSA), will start once an accredited debt management company has been appointed to help a debtor.
The guideline is being written into the CSA’s existing code of practice and forms one of a series of measures discussed by the trade body with BERR on how to alleviate the pressure on struggling debtors.
Consumer minister Gareth Thomas said: “This new thirty-day rule will give people a breathing space to help them take control of their finances as well as encourage them to seek help from debt advisors. I welcome the CSA’s recognition that this is an important and sensible commitment to have made to borrowers.”
The agreement means that debt collection agencies will not contact debtors to pursue debts for thirty days once they have been informed that an accredited debt adviser has taken on the case. This will allow an adviser to negotiate with creditors and the collection agency so that a repayment plan can be agreed.
It would be wonderful if consumers in the United States, Canada and Australia had access to legislation that allowed for the same cooling off period. In the grand scheme of things, thirty days is nothing, but it is an important cooling off period for all involved.
With a thirty day cooling off period consumers would be better able to pursue all debt options in a calmer environment so they could make better and more informed decisions about what solution path is best for them.
With that cooling off period some consumers might use the time to get a better grip on where there money is going so they can put forth a reasonable and sustainable debt repayment plan that they can actually meet instead of jumping at solutions they think will make the pain stop right now.
Anyone want to bet that would actually happen in the United States?
Source: Debt Collectors Agree to Not Chase Debtors for 30 Days
Information for this article was also obtained from a press release by Credit Today.