Nobody gets jailed for unpaid debts here in the Philippines as long as you don’t use unfunded checks because that is against the bouncing checks law.
In the states, they have an option to settle with their creditors as long as the individual can no longer pay his debt because he is bankrupt or very much insolvent. This settlement is what they call Individual Voluntary Arrangement or IVA and this agreement is legal and binding between the creditors and the individual owing money.
However you cannot enter into an IVA on your own. You have to get a legal practitioner to act as a mediator between you and your creditors. The practitioner to do the job is called an insolvency practitioner. They will work out a plan that you can sustain for the duration of the agreement period which usually takes about 3-5 years.
The settlement involves you agreeing to pay a certain amount every month where all your debts and the interest will be frozen while IVA is in effect. Some creditors even agree to write off your debt as long as you religiously pay as agreed during the entire period. This solution works for those who wish to be debt free five years from now.
