Five months after Abolishment of Collaborative Debt Guarantee

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‘Collaborative Debt Guarantee’, also called ‘Joint Debt Guarantee’, was one of the factors letting many people in debt traps. Binding liabilities under the guarantee worked as a real drag on people. Being aware of the side effects driven by collaborative debt guarantee, FSC abolished it for the purpose of minimizing losses suffered by individuals.

 

 

However, a new measure takes a while to be implemented in a full scope. This means that the abolishment is not yet complete, as there are some exceptions to the abolishment. For example, an entrepreneur lets the CEO bound by a collaborative debt guarantee. The other example is that a collaborative debt guarantee is effective when there are co-representatives within a corporate body.  

 

Due to these exceptional cases, many individuals cannot actually feel that collaborative debt guarantee was abolished. In other words, the ‘gradual’ abolishment has been recognized as ‘not very much effective’. However, the actual fact is that there has been improvement in figures during the past five months. FSC’s Financial Policy Bureau announced that the plan is being carried on as expected.

 

Responding to individual concerns saying that the measure seems not very effective, FSC will focus more on checking the abolishment process. Inappropriate cases of collaborative debt guarantee, which are not subject to exceptional cases, will be strictly monitored. Moreover, FSC will gradually reduce the exceptions to collaborative debt guarantee.

 

FSC’s regular follow-up will improve the system, letting the abolishment more effective. After taking a while, more people would say that they are the actual beneficiaries of the abolishment.

 

Regards,
Frank

 
* Related post; abolishing collaborative debt guarantee
https://financialservicescommission.wordpress.com/2012/09/11/abolishing-the-collaborative-debt-guarantee/

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