Debt restructuring is a law for people who are no longer able to meet their fixed costs or payment obligations. How much money you get when you are in debt restructuring depends on the amount of your debts, income and fixed costs. In this article we like to explain how that is.

If you are in debt repayment you have to use almost everything you earn to pay off your debts. You get an average of € 50 per week to get by, this is also called ‘living money’. As the route is almost over, this amount can increase to € 80. If you have a family you get more money than if you are single.

Before you claim the Personal Debt Rehabilitation Act (WSNP), your financial problems are first analyzed by the Social Services or Credit Bank. They decide whether the debts can also be repaid in another way – such as a payment plan.

What is the debt restructuring?

The court determines whether you are eligible for debt restructuring. If that is indeed the case, you enter the debt remediation program. This process takes about 3 to 5 years. Together with the judge and an administrator a monthly repayment amount is agreed. Then you are obliged to generate as much income as possible to meet your creditors. In addition, you may not incur any costs that do not relate to your daily living expenses. New debts are completely out of the question. Did you go through the process well? Then you will receive a ‘clean slate’ from the court and you will be debt-free. This means that creditors can no longer appeal.

What is the Debt Rehabilitation Natural Persons Act (WSNP)?

The abovementioned debt rescheduling scheme has been formally laid down in the Debt Rehabilitation Natural Persons Act (WSNP). This law was adopted in the Netherlands in 1998 to give residents an extra chance of a life without debt. If a person has stopped paying his or her debts, the judge can pronounce a ‘bankruptcy’ about someone. Without the WSNP, someone will walk around indebted for life. The WSNP is trying to find an interim solution for this.

How much money do you get when you are in debt restructuring?

In fact, you will not receive any money if you are in debt repayment. You get a postponement of payment, as it were, and there is a chance that part of the debts will be canceled. So with a bit of luck you do not have to pay off part of your debts – provided you go through the process. How high this amount is depends entirely on what agreements have been made with the court and the administrator. And of course how high your debts are.

Allowable amount

If you are in debt repayment, you are entitled to a free amount. You may spend this amount at your own discretion on fixed costs such as rent, groceries, et cetera. A small part is also reserved for other expenses. Everything you earn above this amount goes directly to the bankruptcy account of the administrator. He or she will ensure that this amount reaches the creditors.

The amount of the amount to be released, also known as living money, will differ per individual. For example, it differs quite a bit whether you are single or that you have a family. To easily calculate how high your free amount is, Bureau WSNP has developed a calculator. You can find this calculator here. You can assume that the amount is very low and that you can only purchase the necessary ones.

How did you get out of debt repayment?

If you are struggling financially, you want to get out of debt repayment as quickly as possible. This means that you can continue with a clean slate, in other words, debt-free. There are two ways to get out of debt restructuring:

Successfully going through the debt restructuring

A debt repayment path lasts an average of 5 years. During the 3 to 5 years you have to live according to the agreements made with the court and with the administrator. The administrator checks whether your behavior is good. Did you keep to the agreements during the term of the debt rescheduling process and demonstrated good financial behavior? Then remnant debts are waived.

Early repayment

Do you want to get out of the debt restructuring faster? The only solution is to repay more. The more you redeem, the sooner your debts are resolved and the sooner the process is over. Do you still have a piggy bank somewhere? Or money in an old sock? Use every dime to pay off your debt. You can also apply for a better job. The higher your income, the more you can redeem and the sooner you are out of debt.

Your difficult financial situation can work to your disadvantage when applying for a job. You can also choose to start your own business. Without starting capital this is difficult, but this article shows that there are enough possibilities. Unfortunately, you have to pay the profits from your own company as long as you are still in debt repayment, but your profit may be so high that you can pay off your debts early. Moreover, you immediately have a new source of income for the future.

When are you entitled to the debt restructuring?

Only a judge can make this binding decision. There are, however, a number of public guidelines, which we will briefly explain below:

  • The person is no longer able to pay off debts
  • The debts arose in good faith. This is a legal concept that judges whether something has happened to the good intentions.
  • The person is willing and able to meet the financial obligations of the debt rescheduling process.

When are you less likely to claim debt restructuring?

In some cases it is unfortunately not possible to go into debt repayment. Debt restructuring is likely to be rejected in the following situations:

  • The debts did not arise in good faith. For example: fines from the CJIB, over-spending (for example an extra loan or purchase addiction), debts from addictions (eg drinks or gambling).
  • The person is already in the debt repayment or has already been in debt repayment in 10 years prior to the request.
  • The debts arise from a sanction of a crime that took place within five years before the request.
  • No amicable process has taken place. An amicable trajectory is a legal term, which means that an organization has made an offer to the creditors, taking into account your income. If the creditors do not agree with this, then the debts have not yet been canceled and you will benefit from the debt rescheduling process.

The court assesses each situation individually. It is, of course, possible that there are certain circumstances that are inextricably linked to your financial situation. That is why you have to communicate everything honestly and openly, so that the court can determine whether you can get an exception.

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