# What conditions should a debtor meet before qualifying for debt settlement?



## Brendan Burgess (20 Nov 2009)

12.[FONT=&quot]              [/FONT]Do you agree that the “insolvency” condition for accessing debt settlement procedures should consist of a test as to whether the debtor is unable to meet his or her obligations, with this inability continuing over a significant period of time? Should any other considerations be taken into account in formulating this condition? [Paragraph 5.126] 
13.[FONT=&quot]              [/FONT]Do you have any views as to the appropriate content of the “good faith” condition for accessing debt settlement procedures?[Paragraph 5.133]


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## VOR (26 Nov 2009)

12. IMO, Debt to Service Ratio of 45% would be a fair level for medium to long term debt service.  Anything above that is difficult to maintain on a long term basis. 
One could argue for 55% on a short term basis of less than 12 months.


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