FCAWA 2011 CONFERENCE Coming Together is a Beginning. Keeping Together is Progress. Working Together is Success. Bulk Debt Negotiations Dennis Nelthorpe.

FCAWA 2011 CONFERENCEComing Together is a Beginning. Keeping

Together is Progress. Working Together is Success.

Bulk Debt Negotiations

Dennis Nelthorpe OAM-Footscray Legal

Centre1

Denis Nelthorpe, West Heidelberg CLSJulie Maron , Legal Aid NSW

Aimee Cooper, Victoria Legal Aid

September 2011

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

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

Financial Counsellors are subject to rules from:

Governments, Regulators, Ombudsman Creditors and Debt Collectors Hardship teams Community Agencies + Funders

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

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

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.

12 months expanded project

WH CLC, VLA, NSW LA

National collection through website

450 Agencies and workers registered to participate

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

Aged Pension 11% Carers 5% DSP 41% Newstart 20% Parenting 18% Other Centrelink 5%

No income 2%

Progress Report - ?

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

From 30 June 2011 until 30 July 2012

Website looks like this:

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

Expect respect!

Provide information with integrity

Act in the best interests of your client

Be in it for the long haul!