Research outlines factors influencing the success of people tackling their debts themselves.
The Money Advice Trust and Money Advice Service have today published research into the experiences of people in debt who negotiate with their creditors. A new Wiseradviser e-learning course for debt advisers on supporting clients to self-help has also been launched.
The research, carried out by the University of Bristol’s Personal Finance Research Centre, provides insight into the factors affecting successful self-negotiation. It also looks at the roles played by the advice and creditor sectors in supporting people to deal with their debts.
Every year hundreds of thousands of people in financial difficulty engage with their creditors directly, a process sometimes referred to as self-negotiation. Some do this alone, using tools and information publicly available while others use the assistance of a debt adviser, for example to help them produce an income and expenditure statement to share with creditors.
Self-negotiators: The Experiences of people in Debt who Negotiate with their Creditors outlines the value of this approach in giving people the support, confidence and knowledge to tackle their debts themselves.
The research outlines a number of factors that influence successful self-negotiation, including:
- The types of debt people have.
- The amount owed relative to available income, and importantly.
- Peoples’ motivation and capacity to deal with their situation.
Communication is also highlighted as crucial. In the study, when communication was good, people stood a much better chance of reaching agreement with their creditors. When communication was not quite right or the wrong channel was used, the process became lengthy and far more challenging.
The research also shows there are opportunities for greater partnership working between advice services and creditors to make the journey easier for people who choose to deal with their debts in this way.
The study drew upon the experiences of self-negotiators who received support from National Debtline and looked at the outcomes they achieved.
Read the full report here