Clear the debtor file once the Bank has received compensation under the Govt Loan Guarantee Scheme

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Petition Action

Clear the debtor file once the Bank has received compensation under the Govt Loan Guarantee Scheme

Additional Information

The objective is to establish a fairer way of dealing with personal debts. Financial institutions and banks receive compensation under the Loan Guarantee Scheme for the value of debts. At this point that the debt should be cleared as an outstanding debt, but that a record of default be made on the credit file to be held there for 6 years... the same period as a County Court Judgement - or longer..
The Govt should pass a law to this effect. The advantages are:
1. Courts save more time since CCJs are reduced
2. The resale of debts to debt collectors stops.
3. In the long run, this will bring back people who remain indebted into economic activity. Instead of paying debt collectors, they can spend in the economy.
4. The individual is still barred from the access to credit for a long period of time
5. Banks are not holding bad debts on their balance sheets

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