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Croatia cancels the debts of 60,000 poor people.

February 23, 2015

Croatia cancels debts for 60,000 citizens. But don’t expect the same in the U.S.


Last week about 60,000 citizens of Croatia got some really good news – their debts have been paid. This small Mediterranean country of about 4.3 million people was part of Yugoslavia until it declared independence in 1991.

According to a report by The Washington Post the unprecedented program, appropriately called “Fresh Start,” will target the country’s poorest people with debts under $5,100 and a monthly income of less than $138. Recipients are not allowed to own property or have savings. This group makes up nearly 20% of the nation’s debtors and they hold 10% of the overall debt.

Croatian authorities have persuaded municipalities, companies, telecommunications providers and even some banks to write off the debts without government reimbursement. Depending on the participation, the program is expected to cost the debt holders between $31 million and $300 million.

While giving many people a new start without the debt load, the program has a potential downside because of the precedent it may be setting. Some economists predict higher interest rates in the future for low income and marginal borrowers, especially if lenders think that debt forgiveness might happen again.

But don’t expect this kind of debt cancellation plan to happen in the U.S. The cost would be very high and there are already legal solutions in place – such as bankruptcy – for dealing with overwhelming debt.

With 17 skilled, experienced attorneys Boleman Law is Virginia’s largest consumer bankruptcy law firm. Get more information at our new website – www.BolemanLaw.com.

Since 1991 we have helped more than 106,000 Virginians regain their financial health.

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Comments? Rusty@BolemanLaw.com


G. Russell “Rusty” Boleman, III

G. Russell “Rusty” Boleman and his wife, Gayle founded Boleman Law Firm in 1991 with the goal of treating everyone with respect and dignity, while providing excellence in customer service and legal advice. Today, Boleman Law is the largest and most well-known consumer bankruptcy law firm in Virginia, having helped over 106,000 Virginians in the last 23 years.

Rusty’s strong commitment to legal knowledge, ethics and community service has made him one of Virginia’s preeminent lawyers.

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