The CFS and creditors

The Common Financial Statement (CFS) was born out of a commitment from the credit and advice sectors to create a uniform approach to how budgets are prepared to encourage consistent responses from creditors to offers of debt repayment.

When someone is faced with a debt commitment that they are struggling to maintain, it is important for them to contact their creditor to explain their circumstances and ask the creditor to consider a new repayment plan. In the past, many people in this situation often found it hard to get creditors to accept that their current financial position meant they were unable to meet previously agreed repayments. Advice agencies would encourage people to write to creditors and enclose a personal or household budget to explain and justify their new offer of repayment, but it was hard for creditors to build a clear and consistent understanding of what payments were justifiable and sustainable.

“MAT and its partners play a vital role in the provision of free independent debt advice. The Common Financial Statement has become a key tool facilitating discussions between lenders and those advising customers in financial difficulties.  The pivotal role of the CFS is recognised in the new Lending Code”.

Robert Skinner
CEO, Lending Standards Board

To improve this situation, the Money Advice Trust worked with the Finance and Leasing Association and the British Bankers' Association, and used its partnership connections with advice agencies and creditors, to agree a standardised budget sheet format with built-in trigger figures for four discretionary spending areas. This standardised budget format, which we called the Common Financial Statement (CFS) could then be used by creditors to ensure repayment offers were fair and could be sustained in the long term.

The Money Advice Trust manages the CFS to ensure that it is up to date by maintaining trigger figures in line with inflation.   

The CFS represents an important agreement between creditors and the advice sector, and provides a great example of these two groups working together to create a step change in helping people in financial difficulty.
For more information on the Common Financial Statement

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