Double Loan Problem
Right after the Great East Japan Earthquake, the JFBA pointed out the so-called “Double Loan” problem, which means the problem encountered by the victims of disaster who already had housing loans or other debts for their businesses but were obliged to make new loans because the assets which were mortgaged for the loans had been destroyed or could not be used any longer because of the disaster.
The JFBA asserted that an easy-to-use procedure must be settled in order to give aid to disaster victims (“Recommendations on Relief from Unreasonable Debt including Double Loan Payments as a Result of the Great East Japan Earthquake” and “Opinion Paper issued on May 19, 2011.” )
The JFBA urged that there should also be special meseaures for entreperneurs, because at this time the project guidelines about this double loan problem were only designed for victims who are not entrepreneurs (“Public Statement issued on July 13, 2011” ).
On August 22, “Individual Debtor Guidelines for Multi-Creditor Out-of-Court Workouts” began to be applied. These guidelines have been set by the Japanese Bankers Association, under the leadership of the Financial Services Agency and are applicable to individuals including individual entrepreneurs. Financial institutions will respect these guidelines and with consent of creditors, debtors will reimburse their debts in accordance with a reimbursement plan that they prepared themselves. Unlike the usual procedure, the information of the debtors is not reported to credit information centers and the surety is released from his/her responsibility. If the plan prepared by debtors contains an exemption of debt, participation of lawyers is mandatory. Also, numerous attorneys are participating in the Trusted Third Party institution that performs checks on the application of the guidelines.