Amnesty of debts: Amicable agreement and statutory solution

Host Country : The Netherlands

Place and date : Rotterdam , 6. - 7.11.2006

Peer countries : Denmark - France - Latvia - Luxembourg - Sweden

A structured debt amnesty system avoids the social exclusion of good faith debtors who have been unable to reach an amicable agreement with their creditors.

Helping good faith debtors and their creditors is the aim of the Dutch debt clearance procedure (WSNP). A certificate issued by the local authorities enables the District Court to tell if and why no amicable settlement has been reached. A solution by the court is seen as a last resort. The creditor and the debtor remain primarily responsible for resolving a debt problem, with the assistance of a local social worker.

Innovative factors within the Dutch scheme are:

A quantitatively and qualitatively adequate supply of administrators. The Legal Aid Board monitors the quality and the provision of administrators, and the supervisory judge oversees the administrators’ fulfilment of their legal duties.
The WSNP computer system, with links to a knowledge centre.
Creditors’ confidence in the system, due to strict administrative and judicial supervision.
The high percentage of debtors who receive a debt amnesty at the end of the court procedure, opening up fresh financial and social prospects. In 2004, 70% of the debtors admitted to the procedure were ultimately granted an amnesty.

So the scheme, which has been running since December 1998, promotes social inclusion, while helping to combat child poverty, inherited poverty, homelessness and inequities in health care and outcomes. It also protects pensioners’ minimum income.

A review in 2001 suggested that too many of the debtors coming into the scheme had little prospect of benefiting from it, due to psychological or other problems. It was also concerned that the judicial authorities were becoming overburdened. Proposed changes to the law, currently under discussion in the Dutch parliament, seek to restrict access to the WSNP to those debtors who are actually ready for it and to reduce the workload facing the judiciary and the administrators. In particular, the legislative changes would introduce what is termed a mandatory debt repayment arrangement, which would oblige uncooperative creditors to take part in reaching a settlement out of court. Higher requirements would also be set for the debtor, and for debt rescheduling applications under the WSNP.

Agenda - | en |

Peer Review manager

Ms Monika Natter ( ÖSB Consulting GmbH )

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Amnesty of debts: Amicable agreement and statutory solution

Host Country : The Netherlands

Place and date : Rotterdam , 6. - 7.11.2006

Peer countries : Denmark - France - Latvia - Luxembourg - Sweden

Peer Review manager

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