I was concerned to see a recent survey that suggested Brits are hiding a cumulative £69bn of personal debt from their partners. The idea that debt is becoming a taboo topic is troubling. After all, if we can't talk openly about debt issues, how can we possibly address them effectively?
The secrecy cycle
The idea of a debt cycle is widely accepted. When debt becomes a problem, people are forced to borrow more to cover the rising costs and pay for essentials like food and energy, which increases their debt burden and continues the cycle. An aspect of the debt cycle that is less widely recognised is the cycle of secrecy that can accompany it.
We see this secrecy cycle in action in another section of this new survey. Nearly 500,000 people in the UK say they wouldn't have started a relationship with their partner if they'd known about their debts. By revealing how some people would prefer to avoid starting a relationship with someone in debt, this stat makes it even more daunting for those in debt to open up about their problems.
Why openness is essential
Last year I talked about why understanding debt means understanding the circumstances of debt. It’s as true now as it was then. Creditors must take the time to work out why debtors cannot (or will not) pay, in order to find a solution that works for both sides. However, this survey suggests that we may have more work to do before we can begin that process.
While many debtors are ready and willing to consider repayment plans that reduce their debt burden, it seems some are too ashamed, frightened or worried to face the reality of their debt and share that with their loved ones. Removing those feelings and breaking the taboo must be considered an integral part of any debt enforcement strategy.
Breaking the cycle
Part of the solution can come from creditors and my peers in the enforcement industry, who must make the most of their PR and comms to break the taboo. We can do this by discussing the issue in a sensitive, human and humble way – it's important to show that we are here to find positive solutions. When debtors see that their problem is understandable and solvable, and that we are here to help, they will be more open to engagement.
However we, as enforcement agencies, must also look to our own practises to help solve the problem. Ensuring that we have systems to identify debtors with their heads in the sand will make it easier to engage in a sensitive way. Adopting enforcement approaches that are flexible will ensure we don’t force debtors to borrow more, rather than enter into manageable repayment plans. After all, it’s better to wait for full repayment than risk a debtor going bankrupt.
Many thanks for viewing my post, I hope you found it useful. If you did, please feel free to share it with your network. And, before you go, would you use the comment section below to let me know what you found most interesting about what I had to say and how it was relevant to your own circumstances?