Collecting debts during the Covid crisis

We're advising clients to review debtors on a case-by-case basis and use discretion when recovering debts . . .

So, where do I start? At the time of writing (late March) I’m sat here in my dining room which, in itself is not unusual, as I’ve been working at home in my various roles for the past 22 years (with some comfort breaks obviously).

The unusual bit is the current circumstances that we all find ourselves in with the Covid-19 situation and having to adjust our working and leisure time accordingly.

Here at Wilkin Chapman it’s very much “business as usual” and despite the state lockdown, my colleagues who would normally be office based have all been able to quickly adapt to home working.

Adaptable and flexible

I'll begin by giving a mention to all local authority colleagues out there. I’ve already seen several posts on social media from council leaders and senior managers praising their teams’ efforts for being able to quickly respond to the increasing demands of their customers, and quite rightly so.

Annual Billing and Year End processing has so far been interrupted with the changes announced both in the budget on 11 March and the further packages announced six days later as the lockdown and close-down of businesses became inevitable. I know from my many years’ experience of working both in and with the public sector that it will deliver on all of the financial packages that the government has announced to assist businesses and individuals.

To pause or not to pause

The enforced closing of those businesses and the laying off of workers has had an expected and somewhat inevitable impact on household incomes and the ability to pay household bills, including council tax.

We've received quite a few instructions from our local authority clients to “pause all recovery actions on all cases” for the foreseeable future.

We've been advising clients to consider putting a brake on the issue of:

• Order for sale proceedings (therefore triggering evictions) where the property in question is the family home and

• Bankruptcy petitions.

For any cases that were issued pre-coronavirus, the only time a pause may cause issues for the council is where there are ongoing legal proceedings where a decision needs to be made. For example, if a client has a pending bankruptcy petition and a forthcoming hearing and the court is still sitting to hear the case.

In general terms, the stance of a particular court will dictate how the situation will affect the ongoing proceedings.

Discretion is essential

Now lockdown is easing, my advice to clients remains the same as the beginning of lockdown: to look at the facts on a case-by-case basis, apply the correct discretion and get the balance right.

For us to maintain 'business as usual', it's been key for us to maintain easy and regular contact with our LA clients to obtain their explicit instructions. That includes at short notice and perhaps unusual times. We've now established a list of 'out-of-office' contact numbers, which we'll use if we need urgent instructions for a case.

Holding position

Clients may wish to assume a holding position by securing debts by way of a charging order. But again, our advice is always about getting the balance right. Please contact me if you would like more details about our semi-automated volume process option.

All good things . . .

Some of you will be aware that I'm currently the vice president of the East Midlands Association. Our executive has agreed to postpone all activities until we're advised to safely do so.

I would've announced at our AGM (scheduled in April) that, subject to membership approval and ratification, be the Association President for 2020/2021 but as the saying goes “all good things come to those who wait” and for the time being I will remain the bridesmaid.

By the time you read this article I’d like to think that things will have settled down and some normality will have returned to our day to day lives – I guess only time will tell.

*This article originally appeared in the June issue of IRRV Insight magazine

Rob Andrews is our Client Relations Manager and Vice President of the IRRV East Midlands Association and can be contacted on rob.andrews@wilkinchapman.co.uk