Who can be granted debt relief?
The applicant must be so indebted that the ability to pay is lacking for the foreseeable years, and it must be reasonable in all the circumstances. The reasonableness test means, among other things, that the debts should not have arisen recently through reckless borrowing.
The structure of the payment plan
The payment plan normally runs for five years and is based on a reserved amount for necessary living costs. Anything above the reserved amount is paid to creditors on a pro-rata basis.
Effects during and after the process
During the process the debt relief is registered with credit bureaus and remains there for five years after the decision. New credit is in practice excluded during this period. After the plan is completed the remaining debt is written off — a genuine fresh start.
- Qualified insolvency and reasonableness are the basic requirements.
- Five-year payment plan based on a reserved amount.
- Registration with credit bureaus for five years after the decision.
- After the plan is completed the remaining debt is written off.
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