Solution to personal insolvency lies in bankruptcy’s shadow
This is because these arrangements involve the creditor bringing something to the table and this means being in a position to pay part of the debt. If the borrower is unable to do this, an arrangement becomes impossible.
Take somebody with an unmanageable debt of €100,000. In a DSA they would pay something over a period of five years after which the residual debt is written off. The amount might be €500 per month meaning a payment of €30,000 over five years. This involves a write-off of over €70,000 plus interest.
