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Understanding Debtors: Their Circumstances and Debt Relief Options

This overview illuminates the varying circumstances of debtors, exploring whether they genuinely lack the means to pay or simply refuse to do so. With a holistic approach that covers all debts, income, and expenditures, it emphasizes the importance of maintaining minimum income standards for everyday living and emergencies. We discuss personal insolvency options, including bankruptcy and debt relief certificates, and highlight the role of MABS as an intermediary in providing guidance and support for debt relief. This framework is beneficial for both debtors seeking hope and creditors requiring structure.

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Understanding Debtors: Their Circumstances and Debt Relief Options

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Presentation Transcript

  1. Who are the clients / debtors ? How are they ?

  2. Can’t Pay? or Won’t Pay?

  3. HOLISTIC • ALL DEBT • ALL INCOME • ALL OUTGOINGS AND • THE DEBTOR’S PERSONAL CIRCUMSTANCE

  4. MINIMUM INCOME STANDARDS Sufficient Income to meet acceptable everyday living costs A small amount toward savings for emergencies and life events

  5. PERSONAL INSOLVENCY • UNABLE TO PAY DEBTS AS THEY BECOME DUE • UNFORESEEABLE THAT THE DEBTOR WILL BECOME SOLVENT OVER THE 5 YEAR PERIOD

  6. FIVE TIER SYSTEM Bankruptcy Personal Insolvency Arrangement Debt Settlement Arrangement Debt Relief Certificate Voluntary Arrangement

  7. DEBT RELIEF CERTIFICATES Dept of Justice has requested that MABS take on the role of Intermediary for DRCs

  8. MABS & Personal Insolvency Trusteeship Public Service Personal Insolvency Trustees • A new Department within MABS benefitting from the ethos, reputation and established good practice • Money Advisers currently do almost all the work which would be expected of a PIT

  9. ADVOCATE and/or TRUSTED INTERMEDIARY ?

  10. HOPE for individual debtors • STRUCTURE and certainty for creditors • BENEFITS for society & economy

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