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(May 02, 2008) On April 11, 2008, the Statute on Consumer Insolvency Proceedings took effect in Taiwan; the law was promulgated on July 11, 2007. Its four chapters, in 159 articles, cover general provisions, rebirth, liquidation, and supplementary provisions. The aim of the measures is to protect debtors who are unable to pay off their debts all at once. Under the Statute, two separate proceedings are available to debtors who are having trouble paying off their loans – debt re-organization or debt liquidation.
According to Spike Wu, Chairman of the Consumer Finance Unsecured Debt Restructuring Program Committee of the Bankers Association of the Republic of China (BAROC), the Statute "actually simplifies the debt negotiation process," so that "debtors need only fill out forms such as a certificate of income to accomplish a repayment deal with the banks. The regulation … makes the payment options flexible." He added, "[a]fter negotiation, the bank will offer the debtor a tailor-made deal in which the amount of monthly payment and payment terms will vary according to each debtor's ability to pay."
However, according to BAROC, "some debt agents, including attorneys, have posted advertisements exaggerating the complexity" of the proceedings, advertisements, which, in the view of BAROC, "could mislead debtors into believing that only with an agent's help will they be able to obtain a better deal from the banks, which is far from the truth." The association has asked the government to take action against these advertisements; the Ministry of Justice will determine if they contravene any law. (Yeh Fang-hsun, Bankers Warn Against Consulting with Agents on Debt Payments, CENTRAL NEWS AGENCY, Mar. 31, 2008, Open Source Center No. CPP20080331968229; The Statute for Settling Consumer's Outstanding Debt, 6752 THE GAZETTE OF THE OFFICE OF THE PRESIDENT 138-176 (Nov. 7, 2007), GLIN ID 194570, available at http://content.glin.gov/summary/194570.)
- Author: Wendy Zeldin More by this author
- Topic: Consumer protection More on this topic
- Jurisdiction: Taiwan More about this jurisdiction
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Last updated: 05/02/2008