Latvian cabinet approves limited debt relief measures

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The Cabinet of Ministers approved a seven-bill package prepared by the Justice Ministry, including a procedure that ensures debt relief opportunities for individuals with a low income and small debt, according to a press conference on April 14.

“Yet you can't call it debt amnesty, rather it's similar to the insolvency process with relief and expedited conditions. Namely, a person must register with a notary according to the legal procedures and notify them of their situation,” said Justice Minister Jānis Bordāns.

He maintains that it's not a last-minute fix, but has been drafted over several years. One of the criteria would be that the individual's consumer credit debt ranges from a two-month minimum wage to 5,000 euros. “This means that utility payments, including gas, water and the sort, those aren't included under these obligations,” said the minister.

The law is meant for those who are poor or underprivileged and the notary would decide if the person eligible according to the law. The approved persons will have to meet several criteria, including taking financial literacy courses. The notary will monitor the individual for two months, and if they don't complete the criteria the debt forgiveness will be reversed.

Next the bills will be considered by Saeima.

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