Can't pay or won't pay? A review of creditor and debtor approaches to the non-payment of bills

Authors: Nicola Dominy and Elaine Kempson
Funded by: Lord Chancellor's Department
Published by: Department for Constitutional Affairs
Publication date: March 2003
ISBN: 1840990503

This research was commissioned as a result of an Enforcement Review, which identified that,

"... the system is not good at identifying which debtors have the ability to pay and which do not, so debtors may find themselves being pursued relentlessly for a debt that they have no means of paying. Equally, debtors who know the system's weaknesses are able to exploit them to avoid payment".

It was felt that an inability to distinguish between debtors who won't pay and those who can't pay could diminish the ability of the review to achieve its aims, and it was apparent from existing research that there was not a clear-cut distinction between can't and won't pay debtors. This study therefore aimed to clarify that picture within the context of debtors appearing in the civil courts. The research had the following objectives:

To identify and analyse the demographic characteristics of debtors who do and do not pay;
To identify why debtors are willing or unwilling to pay, and which features of the debtor, the debt and the enforcement process influence such decisions;
To investigate the enforcement practices of creditors, identifying why certain enforcement procedures are chosen and what mechanisms, if any, are in place to identify types of debtors and likelihood of recovery;
To explore the extent and features of those who do not pay because, although they have the resources, they cannot accept the fact of their indebtedness; and identifying what factors, if any, would lead them to pay.

Can't pay or won't pay? A review of creditor and debtor approaches to the non-payment of bills [ Full report (PDF, 282kB) | Research summary (PDF, 91kB) ]