The government has produced a plan for rescuing people with bad credit who got that way trying to maintain a livelihood. The measures make sense in that it is of little use to classify those who have no income to speak of as credit delinquents. But it is strictly limiting the range of aid and the qualifications, something that is very shortsighted. We hope to see more wide-ranging support for people with bad credit who are responsible for their families' livelihoods.
A typical example would be the move involving recipients of "national basic living guarantees." In such cases the government's measures are a landmark change, and essentially write off their debts. Anyone else, however, has to divide up his debt and pay it off over a period that can be as long as 10 years. You wonder; who will want to work his way out of being a "national basic living guarantees" recipient if he has to pay off his debt the moment he succeeds? The government should stop being so attached to the idea it is getting rid of the so-called "moral hazard." It would be better to allow people in these cases to have their debts fully canceled after having a financial institution with a certain degree of responsibility share the burden of the financial loss.
It is also unfortunate that there is nothing for those just above the lowest level. Granted, those individuals have other options available such as the "individual recovery system" or bankruptcy, but many among them are in situations similar to " national basic living guarantees" recipients. Separating them from the rest would be a logistical problem, but there is a need for a more detailed aid program.
The plan includes a one-year deferment on repayment for people with bad credit who work for themselves in small-operations, but the uniform time period of one year is unrealistic. There are going to be differences in the scale of their business operations and performance, so the right thing to do would be to apply different deferments of one to three years accordingly. If that would be hard to try from the start, one way to go about it might be to begin with one year deferments and then extend them for people who do not achieve a certain level of income during that time.
People who struggle to maintain a livelihood and end up in bad debt have to bear the largest part of the blame themselves, but bad personal debt is still something our society should share a certain degree of the burden for. We hope to see constructive aid plans from the government.
The Hankyoreh, 24 March 2005.
[Translations by Seoul Selection (PMS)]
[Editorial] Develop More Aid for Poor With Bad Credit |
