Sat, Jan 07, 2006 - Page 2 News List

Legislator proposes plan to bail out `card slaves'

LIFE LINE KMT Legislator Shyu Jong-shyong's plan would give credit card defaulters additional time to settle their debts, provided that they do not exceed NT$20 million

By Jimmy Chuang  /  STAFF REPORTER

Chinese Nationalist Party (KMT) Legislator Shyu Jong-shyong (徐中雄) said yesterday that "card slaves" deserve to be given a chance to pay off their debts.

"I would suggest giving these `card slaves' a fixed amount of time to pay off a certain percentage of their debts so that they do not have to file for bankruptcy. That way, they will have a second chance to pay off their debts and banks will be able to solve their bad debt problems as well," Shyu said.

Shyu made his remarks during a press conference at the legislature yesterday morning.

"Card slave" is a term used to refer to credit card holders who are in debt to their banks.

Shyu proposed solving the "card slave" problem by amending the Bankruptcy Law (破產法).

"Officials are currently working on decreasing the annual percentage rate (APR). We would like to suggest another solution to help both [card slaves and banks] to solve the problem more efficiently," Shyu added.

Shyu provided a rough outline of his idea. "Card slaves" who have regular income and whose credit card debts do not exceed NT$20 million (US$630,000) will qualify for the proposed program.

If the total amount of their debt is less than NT$2 million, they will have to pay at least one third of their debt every three months. If their debt is between NT$2 million and NT$5 million, they will be required to pay one fourth of the total in the same period; one fifth if the total is between NT$5 million and NT$10 million and one sixth if the debt is between NT$10 million and NT$20 million. All debts must be settled in the space of three to five years.

"I also hope that these card slaves will be allowed to maintain ownership of their real estate [if the plan is adopted]," Shyu said.

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