They say every good thing comes at a price! Indeed, it does because today every good thing that we want is so expensive that we end up not buying it and later feeling sad or regretful. The people who we choose to be our leaders (the government) has definitely kept us in their minds as they are always trying to come up with new schemes that will take off some of the payment burden. The one that we will be talking about is repayment assistance plan.
It is also called as debt repayment scheme, short for DRS. It is basically a pre-bankruptcy scheme which is administered by the Official Assignee (OA). When this scheme is successfully used by a proper guidance or by ourselves, the debtor can avoid his/her chances at bankruptcy, along with its restrictions and social stigma. This gives the debtor the opportunity to financially start anew after agreeing and committing to the terms of the DRS , it is helpful in making payments to repay creditors after under a repayment plan over a period of 5 years and not one year longer than that.
Only if the total debt amount does not exceed $150,000, after the debtor self-files or creditor files a bankruptcy application, the case will be referred to the OA for an assessment of the debtor’s eligibility and suitability for DRS. In order to pass the application for DRS, a debtor has to fulfill all the following criteria that is mentioned below.
- The total liabilities should not exceed the amount of $150,000;
- The debtor must be gainfully and properly employed and should have a steady and regular flow of income.
- He or she (debtor) should not have beenin a bankrupt or been on the DRS in the last 5 years.
- The debtor must not have been a subject to a court-based arrangement in the last 5 years.
- Lastly he or she must not be a sole-proprietor or partner in any firm.
So I would like to conclude by saying just one last thing, this scheme is definitely a win-win for both, the debtor as well as the creditor.