The Diet enacted on Tuesday a bill to revise the law on rehabilitating bankrupt individuals.
The House of Representatives unanimously approved the bill at its plenary session. It has already cleared the House of Councilors.
The revised law is expected to be implemented next April in an effort to simplify and speed up the legal procedure for the rehabilitation for bankrupt individuals.
Debts of less than 30 million yen, except for housing loans, will be dealt with under the new law. Those who seek rehabilitation must submit a debt repayment plan over three to five years.
Under the revised law, court-appointed officials are able to examine debts and make inspections of debtors' property. If less than half the creditors oppose the repayment scheme, the court will give its approval and part of the debts will be annulled.
The new law stipulates that debtors are required to pay one fifth of their debt, or 1 million yen, whichever figure is highest.
For salaried workers paying off housing loans, the law provides more favorable terms.