An Effort to Help Credit Card "Slaves"

The use of credit cards brings not only convenience to the card holders, but also, unexpectedly, social problems on a national scale to Taiwan. According to a recent report, there are more than 500,000 people in Taiwan "enslaved" by their won credit card debt. Many of these credit-card "slaves"hope that the government will pass new legislation to help them get back on their feet because they consider the current Bankruptcy Act is inadequate to deal with their problems. Under the current Bankruptcy Act, for a debtor to be declared bankrupt, he or she must have at least two creditors (so one would be out of luck if he has only one creditor), and his assets must be able to cover the cost and expenses of the bankruptcy proceedings, or else the petition will be rejected by the court. The proposed Consumer Bankruptcy Act will provide several advantages over the current Bankruptcy Act if the debtor's debt is less than NT$10,000,000 and is capable of earning regular income in the future even if there are little assets to cover the cost and expenses of the proceedings. The vote of the creditors' meeting to approve a plan of composition is reduced from 2/3 to 1/2 (based on value of the claims) and all unreported claims will be wiped out after the composition is successfully implemented. Further, in some circumstances the court may declare the debtor's plan of composition effective without the vote of the creditors' meeting.