CfRC and Debt Justice publish joint response to SDRP consultation

The Centre for Responsible Credit (CfRC) and Debt Justice published a joint response on 5 August 2022 to HM Treasury's consultation on the Statutory Debt Repayment Plan (SDRP)¹. The response calls for major revisions to the proposals, including a mechanism to write down debts sold to debt collection agencies and public scrutiny of the Standard Financial Statement "trigger figures" used to determine how much debtors will need to pay back through the plans¹.

The Statutory Debt Repayment Plan is a proposed statutory scheme under which a debtor makes payments towards their debts over a set period, with the amount calculated using the Standard Financial Statement's trigger figures¹. Those figures set the levels of spending treated as acceptable when working out what a debtor can afford to repay¹. The joint response argues that the trigger figures should be subject to public scrutiny¹.

The two organisations also want the plans to include a mechanism for writing down debts that have been sold to debt collection agencies¹. The response describes its asks as "major revisions" to HM Treasury's proposals¹.

The response runs to 15 minutes of reading according to the publisher's listing, and the full submission is available as a PDF dated 4 August 2022¹. No figures for the proposed write-down mechanism, the trigger figures themselves, or the repayment period under the plans appear in the published summary of the response¹. HM Treasury's own response to the consultation has not been reported in the material published alongside the submission¹.

Why it matters for households

The SDRP is intended to give people in problem debt a statutory route to repay over time while being protected from creditor action, with the amount they pay set by reference to the Standard Financial Statement's trigger figures¹. If those figures are not publicly scrutinised, the organisations argue, the amounts debtors are required to pay back through the plans rest on thresholds that have not been opened to examination¹.

The write-down proposal concerns debts that have been sold on to debt collection agencies. Under the current proposals as the two organisations describe them, a debtor could be required to repay the full amount of a debt even after it has been sold at a discount, with no mechanism in the plan to reduce the balance¹. The response asks for such a mechanism to be built into the SDRP¹.

Both points affect anyone who would use an SDRP rather than an existing debt solution, and the amounts involved depend on trigger figures that have not been published in the response summary¹. The wider regulation and policy framework for the scheme is set by HM Treasury¹.

What happens next

The consultation response was published on 5 August 2022¹. No date has been reported for HM Treasury's response to the consultation, for publication of the trigger figures, or for the SDRP to come into effect¹.