From Iceland — Government Announces Plan to Help Families in Financial Trouble

Government Announces Plan to Help Families in Financial Trouble

Published December 3, 2010

The prime minister’s office has announced a three-pronged plan to help alleviate the suffering of families struggling with household debt.
Fréttablaðið reports that plan focuses specifically on the requirements for assistance thusly:
First of all, the requirements to qualify for financial help will be lowered, to make it easier for people to receive assistance. Second, the government intends to make it easier to choose the “110% way”, wherein a household’s total debt is reduced to 110% of their property’s current value. Third, the government plans to completely re-organize interest schemes.
It is estimated that up to 50,000 people will be able to receive help that was previously not available to them through this plan. It also focuses on lower income families – people with a disposable income percentage of 20% or over will not be eligible for the 110% scheme. For lower income people, anywhere from 4 million to 30 million ISK will be taken off their debt, depending on whether or not they are married, and how many dependants they have (single parents will receive the greatest benefits).
The plan comes on the heels of legislation introduced last October to fight debt, which includes homes facing foreclosure and then auctioning off being protected from foreclosure until the end of March 2011, and those who have ended up bankrupt being able to have their debts expire two years from the time bankruptcy is declared.

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