Justice Minister Bridget Prentice believes that 'charging the true full cost for court process (including, for example, warrants and charging orders) will mean creditors consider carefully whether they are throwing good money after bad, and consider alternatives'.
Ms. Prentice has not been around as long as I have and has manifestly not 'mixed', so to speak, in the same circles, or she would not speak so lightly of people and their alternatives when it comes to money owed. I have known people - albeit not willingly - who would consider a visit from two heavies with baseball bats to be a perfectly reasonable 'alternative' to writing off a debt, however insignificant.
The only 'alternatives' available to people who quite rightly consider grievious bodily harm to be inexcusable are:
- To come to an arrangement for settlement which may or may not be successful.
- To issue proceedings and receive the same appalling service for much more money.
- To bite the bullet and write off the debt.
Go for option one - and don't even think about belting somebody in the chops as payback if you have to settle for option three instead. You could end up paying for your own trial.
Lord Mandelson tells us that the Government is providing real help to business' and I agree that some Government programmes are 'providing real help'. I can't help but think, though, that affordable justice, improved services for creditors, and the appointment of a Justice Minister with some understanding of real life would provide 'real help to business' also.
If creditors do not have a cheap way of collecting their money, they might resort to violence which is obviously bad for all parties and a throw-back to a time several decades ago when a knock on the door might lead to a thorough beating-up for non-payment. Also, if Creditors keep writing-off debts, it means that more people are going to buy goods/use services knowing they will not be pursued for payment. A bad situation will then escalate. If Creditors are unable to collect their money, they will have to put up their prices in order to cover write-offs, which will lead to greater inflation, which is bad for everyone.
ReplyDeleteWollf originally said that justice should be available and accessible to everyone. Debt collection should be as cheap and efficient as possible. The Late Payment Compensation of Commercial Debts (Interest) Act is supposed to compensate Creditors for their costs of collecting debts. You would not get very far on the £40.00 laid down by that Act for debts under £1K. I personally think that Bailiffs should work on the same principle as HCEOs - commission on what they recover - which might make them more effective. The interest under the Late Payment Act is now only 8.5%. It would be better at a fixed rate of at least 12% to make debtors realise that they have to pay for the privilege of borrowing money which, effectively, is what they are doing by non-payment.
All the advantages seem to be with the debtor instead of the Creditor. We need a return to the idea that if you cannot afford something, and if you do buy something knowing full well that you are unlikely to be able to pay for it, you should be penalised heavily otherwise everyone will suffer. Bankruptcy should be extended for at least five years to have a proper impact.