Facilitators

Hi my fellow workers Ok The old Chrisco question came off a distance learning trainee today, she has written:- "the Debt schedule had me confused because why wouldn’t Chrisco’s be on there? (I understand that it is an everyday expense and if you don’t pay, you don’t get it but, should it still be on there?)"   How would you answer that considering that in their final assessment they have to put the old type lay-by to Michael Hill Jewellers which is counted as a debt. Just like Chrisco, a lay-by can usually be eliminated fairly easily & a refund (less fee) provided if the client so wishes, because the vendor has possession of the goods until fully paid, and until the goods pass from the vendors hands into the clients. How do you get your trainees ready for the lay-by question in the assessment? and How do you suggest I answer my DL trainee's question? Ideas welcomed. Many thanks Ange

Thanks Ange for your feedback.  If others wish to comment then please do. Linley and I will follow these up.  Thanks very much.

I'm not sure of the answer to this from a FMIC perspective. If it helps, in practice, I wouldn't put any of these in the debt schedule as they are weekly advance payments, not debts. It's closer to being a savings scheme than it is a debt.  

Hi Ange, Did you ever get an answer to this question? It's a good one. In my mind, Chrisco accounts are very similar if not the same to a layby. You choose your hamper and agree to a payment plan. Michael Hill holds onto the ring - Criscos holds onto the hamper until the balance is paid off. Both are sales agreements with obligations on both sides. It's my feeling that in both cases it should be included in the debt schedule and on a time-specific budget worksheet. Makes my mind flick back to my question about how to deal with BNPL accounts on the budget worksheet. Sorry for the late response - not in the habit of checking this form yet. ka kite Lynda

Hi Lynda No, the only replies/answers have been from you and Lisa (Thank you) But as we can see both your answers are different and then thirdly, the FMIC manual & the given FMIC assessment answer marker document are different again with the manual teaching Chrisco not shown on debt schedule, but on the assessment marker document marks to be deducted if  Micheal Hill Jewellers old style lay-by is not shown on their assessment debt schedule. Maybe Linley, would you reply informing of what FinCap requires please, as each of the three different answers above would result in different debt totals that are collected for FinCap statistics. Many thanks Ange    

Hi all, I am thinking like Lynda. Although Lay-bys are not considered "debts" as such (and under the law), to me the client has made a "promise to pay". This is a financial commitment so therefore needs to be recognised as such and recorded on the debt schedule. It has an end date because usually there is an expectancy to pay a certain amount by a certain time. Yes, some vendors/finance companies may alter the terms like BNPL do (you can take the goods with you) but there is an final payment expected some time and the client will no longer be financially committed. If we are doing cashflow projections with clients we FMs will be trying to plot when that end payment is so we can use those funds to support another part of that client's life whether that be more going on food, power or paying off another debt (or the arrears caused by over-committing to laybys). If it is not on the debt schedule it is likely that those options above will be forgotten as part of an overall financial plan going forward. The message we want to send is that Yes laybys are better than loans BUT it is still a commitment and burden on your future financial stability. If there is no notation in their paperwork then it is harder to educate about. Two cents Jan