Credit Services Association Update. News article about debt collection | Legal Recoveries debt recovery services

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This product (the online recovery system) has revolutionised the administration and recovery of salary and overpayments. The whole system is very efficient and over the years has saved me a huge amount of time in administering this potentially embarrassing area of payroll administration.

Tim Kelsey, Payroll Manager
Buckinghamshire County Council

Credit Services Association Update

Introduction of the 30 day grace period

As part of a series of positive measures designed to ease the pressure faced by debtors in financial hardship, the CSA (Credit Services Association) and the BERR (Business Enterprise and Regulatory Reform) have introduced a 30 days grace period.

How does this work?

Once a debtor has taken on the services of a non-fee charging accredited debt advisor, the advisor will then request the grace period from the collections agency. Once the request has been made, the 30 day grace period will start. During this time DCA's agree not to pursue the debt. This allows the advisor sufficient time to pull all the necessary information together to make realistic repayment arrangements for the debtor and make a payment offer. This benefits all parties involved including creditors.

Who does it apply to?

The grace period applies to all types of debt and any debt amount and only to debtors who are individuals. It also only applies to a debt once, so a debtor can't keep going to different advisors to "extend" the grace period.

When does the 30 day grace period not apply?

The grace period can only be implemented once a debt advisor has contacted a collection agency - it can't be introduced if the debtor makes the request direct to the agency. It also can't be introduced if legal action has already begun, as this would interfere in the legitimate legal process.

What are LRC doing?

We believe this is a positive and common sense step for all parties involved and we're taking these new regulations a step further. Going forward we will introduce the 30 day grace period when any advisor - both non-fee and fee charging, contacts us.

We want to ensure our clients don't waste money in court fees issuing claim forms that may get thrown out for not applying the grace period. We also want to safeguard our clients' reputation and we believe applying the rule across all debt advisors minimises reputational risk.

As of May 31st all our systems will have been updated to ensure we can implement this change. If you have any questions or would like more information, please do not hesitate to contact one of our team.

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