One phone call that saved a life
*TRIGGER WARNING* This blog contains information about bankruptcy and legal proceedings that some might find distressing
I used to work as a debt lawyer, or to give it it’s correct term, Consumer Credit Act Litigator. I was one of only about ten such lawyers working in the UK representing only consumers.
My work involved acting only on cases where the consumer was already being sued or bankrupted so it was wholly defensive work. It was also almost entirely funded via no-win-no-fee, as legal costs were recovered from the debt companies themselves, such was the woeful quality of their paperwork.
During 1997 – 2009, responsible lending was virtually non-existent, but so was decent record keeping. Less than a quarter of credit agreements made between that time were properly enforceable, primarily because the lenders did not bother to keep accurate and secure records of such agreements. It was a ‘sell, sell, sell’ world. The credit crunch brought an end to the lunacy, but it also destroyed many lives along the way.
People lost jobs, marriages crumbled, debts got called in. The pattern was depressingly similar. The customer defaults, the bank adds loads of charges, calls in limits, harasses the customer demanding 100% repayment, then sells the debt on to a debt purchaser for less than 10% of face value.
These debts are termed ‘non-priority’ by most debt advisors; people are told to pay mortgage/rent and essential bills ahead of credit cards and loans. This term can be dangerously misleading because in certain circumstances, these non-priority debts can have catastrophic impacts, especially for home-owners.
My job brought me into contact with many vulnerable clients, of whom I’d estimate around 60% told me of depression, anxiety and hopelessness often directly linked to the debt worries. It seems that underlying mental health vulnerabilities can be very reliably exposed by entering debt.
The catastrophic impact these debts can cause was illustrated to me very starkly in several cases, but one in particular will remain in my thoughts.
I received a message at 7.30am from Jill, an anxious cancer sufferer who was due in court at 11am to be bankrupted for an old and disputed credit card. The new owner of the debt had received zero communication from her and upon checking her credit file, noticed that she owned her own property.
They had issued bankruptcy proceedings and she was rightly terrified of losing her specially adapted bungalow over an old £2k debt, but this was a real possibility as the additional insolvency fees are often 20 times greater than the original debt.
Jill explained to me her desperate health issues, while her carer helped her dress for court and advised her to set off for the hearing whilst I attempted to get a resolution with the opponent over the phone.
The debt purchaser, upon finally learning the true nature of her situation, immediately emailed confirming withdrawal of the bankruptcy. I was able to telephone her as she arrived at the court to tell her to turn around and go home, she was safe and free of the debt forever.
Later that day, I got another call from Jill. She explained that her carer had now left and that she had something to tell me. She confessed that she had been so frightened and depressed that she had been planning to take her own life that day upon returning from court a bankrupt.
My chance intervention meant she was now sitting there, the realisation dawning that she would keep her home, be free of the scary letters and fight the rest of her illness on her own terms. It was a call I will never forget and I am grateful that my old law firm supported such pro bono work.
Pick up the phone
I also get to see thousands of vulnerable people using the LegalBeagles forum and I am especially proud of the supportive reaction towards anyone brave enough to share their mental health fears, they are often pleasantly surprised to find out how many others have experienced a similar journey.
The biggest problem is communication. The debt collectors’ letters are aggressive and demanding. Their token suggestions to seek help if you are experiencing difficulties are not believed. The consumer becomes afraid and entrenched. This is magnified tenfold when a mental health condition enters the mix. The credit crunch triggered 5000 ‘extra’ suicides in 2009 across Europe and the USA. 300 of those deaths were in the UK, causing so many families to be destroyed.
Improvements have already happened due to stricter FCA debt collection regulation, but it is important that we get the message out to ‘talk to your creditor’ if you are vulnerable or ill, there is now a real chance that they will respond compassionately.
*Not her real name