The Financial Supervisory Commission yesterday urged all card abusers to apply for participation in the debt negotiation mechanism by April 10, or face pressure from their banks.
Credit and cash card issuing banks will send letters to all card abusers by Friday and indebted cardholders who do not respond or apply for debt negotiation within one month will face debt collection pressure, commission spokesman Lin Chung-cheng (
Debtors who participate in the debt negotiation mechanism will be exempted from interest charges during the negotiation period and enjoy reduced interest charges upon signing a repayment contract with their banks, Lin said.
Debtors should show proof of income and honestly report their financial situation in the negotiation, he added.
The Bankers Association of ROC (
The authority would help these individuals to find employment and to enter the negotiation mechanism once their resources improved, he said.
The commission estimated that there were 500,000 indebted cardholders with an average debt of about NT$500,000 at the end of last year.
While over 23,000 borrowers have resorted to the bail-out program, the rest seem to be banking on the passage of a draft consumer debt clean-up bill and banking on the legislation to exempt part of their liabilities.
"The law is not a `free lunch' at the public's expense, as this would increase all borrowing costs in the future," Lin said.
The commission expected abusers to apply for the bail-out program before filing for bankruptcy, he said.
BNP Paribas Securities (Taiwan) Co said yesterday that they saw a probability of over 80 percent that the debt-relief legislation would be approved in the current legislative session and established by the second quarter.
"The economic impact is uncertain, but it will be significant," said Jesse Wang (
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