A customer has just lost their job
A sudden loss of income is one of the most common triggers for arrears — and one of the most recoverable, if you handle the first conversation with care.
What this scenario teaches
- Treat job loss as a temporary, recoverable form of hardship
- Establish whether any income remains while they look for work
- Set a holding arrangement that does not pile on pressure
- Signpost benefits and free financial counselling
- Schedule a sensible review point rather than chasing weekly
6 min read
The scenario
A previously reliable customer tells you they were made redundant last month, or that casual shifts simply dried up. The income that paid your account has gone, at least for now, and they do not yet know when it will return. They may be applying for roles daily, or still reeling.
This is a fork in the road. Push hard and you may extract one payment while losing the customer and the rest of the balance. Respond well and you keep a person who, once back on their feet, is very likely to clear what they owe.
What's really going on
Unemployment is usually temporary, which makes it different from a structural inability to pay. The person often intends to pay and is mortified that they cannot. They may be navigating Centrelink for the first time, juggling rent and groceries, and fielding calls from several creditors at once.
Their capacity right now is genuinely low, but their willingness is often high. The skill is to protect that willingness — to be the creditor who was decent during a rough patch — while keeping the account alive until income resumes.
Your options
- Hold the account. A short payment pause or a nominal token payment keeps the file from escalating while they regroup.
- Reduce, don't remove. If a little money is coming in from benefits, a small affordable amount maintains momentum and dignity.
- Signpost income support. A gentle mention of Centrelink entitlements or local services can genuinely help.
- Refer to counselling. If several debts are converging, the National Debt Helpline on 1800 007 007 can help them prioritise.
Recommended approach
Acknowledge the situation as a setback, not a character flaw: "That's a tough spot — let's take the pressure off this account for now." Ask whether any income is still arriving and whether they have lodged for support. Agree a modest holding arrangement and, crucially, set a review date a month or so out rather than ringing every few days.
Put the agreement in writing so they are not anxious about being chased, and let them know how to reach you the moment work picks up. Merion's wider guidance on humane recovery sits within the Merion site if a colleague needs the bigger picture.
What to avoid
Do not demand the full instalment as though nothing has changed, and do not imply they should have saved for this. Avoid calling repeatedly — frequent contact during unemployment reads as harassment and erodes the goodwill you want to keep. And resist locking them into a "catch-up" schedule that assumes income returns on a timetable nobody can guarantee.
The lesson
- Job loss is usually temporary — protect the customer's willingness while capacity is low.
- A holding arrangement or token payment keeps the account alive without piling on pressure.
- Set a review date weeks out instead of chasing every few days.
- Signpost Centrelink and the National Debt Helpline rather than guessing at advice.
Frequently asked questions
Should I pause the account entirely?
Often yes, for a short period. A brief pause or token payment with a clear review date is usually kinder and more effective than insisting on the full instalment.
How often should I follow up?
Sparingly. Agree a review point a month or so ahead. Frequent calls during unemployment feel like harassment and damage the relationship you want to keep.
What support can I mention?
You can note that Centrelink may offer income support and that the National Debt Helpline (1800 007 007) gives free advice — without presenting either as financial advice.
Real situations, the right call
When an account goes past talking, Merion recovers it — commission-only, no upfront fee.