If I made the debt forgiveness rules… If I could make the rules surrounding debt forgiveness they would be something like this:
1. you can only seek application for debt forgiveness via the bank and not on your own. This may sound odd but doing this helps pre-qualify the case and remove moral hazard. If you go in on your own in early days then no meaningful engagement will have occurred and your credit history isn’t shot [which is a fair outcome to getting debt relief].
Banks (via the Mortgage Arrears Resolution Process) are also in an idea position to know when a loan is unsustainable. This is further described in S.39 of The 2011 Code of Conduct on Mortgage Arrears
Where ‘unsustainable’ is defined as per the Expert Group Definition. Which is where you go 18 months into arrears or after a 5yr Deferred interest scheme doesn’t work . It is important to remember that banks are legally obliged to be in contact with borrowers and attempting to find work …