Danny Sullivan
Probably a man completely drowned in debts can answer this question better than anybody else. The answer comes from experience not because of knowledge. However the readers can find better explanation in the below given lines. Though it is a financial terminology, the word is self explanatory. It says about relief from debt that means partial or complete forgiveness from debt. It can also be slowing down the speed of debt or stopping of further growth in debt. The definition is situational or depending on the type of debt. Simple thing about this is to relieve the debtor from the stress of debt repayment. Debtor may be an individual or a corporation or a nation. The ancient meaning for this is different from the current meaning because banks and financial institutions formulate debt relief strategy based on the norms issued by government. They are not allowed to formulate their own rules but can make slight modifications based on convenience. In novels written by famous writers debt relief is explained in different way but, it is nowhere close to today’s sense of debt forgiveness. The orders for debt relief is issued based on certain eligibility criteria. Some of them are given below for readers’ reference.
Are you eligible for debt relief?
When debtor is not capable to pay debt then he is declared as eligible for debt relief. As per UK government if the debtor’s total liabilities exceed fifteen thousand pounds then he is considered for debt relief. If the debtor’s disposable income apart from regular household expenses is less than fifty pounds then also he is eligible. The debtor shouldn’t have been previously subjected to DRO. His track record of six previous years was checked. The debtor shouldn’t have been involved in bankruptcy in any other insolvency such as individual voluntary arrangement, an interim order, an undercharged bankrupt and many more conditions. If the debtor is interested to claim for debt relief then he should file an application with the creditor. Obviously it is not in the interest of creditor so he hardly shows any inclination. Continuous follow-ups may help to put the file on otherwise the papers are turned off without the notice of debtor.
It is very tedious to convince the creditor for debt relief. He may be asked to get all supporting documents. The proof of bankruptcy has to be produced for further processing. In countries like UK debt relief is an alternative for bankruptcy but, few of the countries treat it as next step to bankruptcy. Bankruptcy is a stage where person is declared insolvent when liabilities are more than assets. This declares about debtor’s incapability to pay debt even by dissolving his all assets because proportion of assets is too less compared to liabilities. This has to be declared by court and papers issued in court should be produced to the creditor so creditor is the sole decision maker about debt relief. Creditor owns all rights to reject the plea of debtor as he is the actual money lender. Failing to prove the statement may imply strict action against debtor.
Hence debtors should know the consequences before making any such statements. The procedure is quiet tedious and requires assistance from a professional. The third party councillors or middlemen can do the job efficiently because they have experience of handling many similar cases. They are also addressed as debt advisors who are officially permitted to help debtors for debt relief. If debt relief is received then debtor is supposed to follow certain restrictions like he can’t act as a company director, he can’t promote or create a company, he can’t manage a business and he can’t borrow more than five hundred pounds without informing the lender.
