More than 7,500 heavily indebted individuals made use of a new system to receive court-organized rehabilitation in the first 11 months since the system’s introduction last April, according to statistics released by the Supreme Court on Sunday.
Supreme Court officials said the figure, 7,542, would likely top 8,000 for the year once the March cases are added.
The statistics also showed that more than 160,000 people filed for personal bankruptcy with the nation’s courts in 2001, setting a new annual record for the postwar era.
Some experts had predicted that the new individual rehabilitation plan — in which heavily indebted people repay a part of the debt they owe on condition the remainder is forgiven — would reduce the number of those filing for personal bankruptcy.
In principle, those with debts of 30 million yen or less, excluding mortgages, can have the court relieve them of all their remaining debts if they can draw up a three-year repayment plan acceptable with the majority of their creditors. In addition, the new system restricts the conditions under which financial institutions can confiscate homes in the event mortgage payments become delinquent, and it allows for repayment schedules to be extended.
Others had said that the new system would only invite confusion, as those who should otherwise go bankrupt would be “saved.”
But with annual individual bankruptcies reaching 160,457 last year, it appears that such an outcome did not materialize, court officials said.
The Tokyo District Court saw the largest number of people seeking assistance under the new plan — 668 — with most of them receiving approval of their repayment plans after securing the assistance of legal counsel.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.