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.
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Since 1991 we have helped more than 106,000 Virginians regain their financial health.
Russell “Rusty” Boleman III, Chairman of Boleman Law Firm, P.C. and his wife, Gayle have enjoyed almost fifty years of marriage and working together. Their early days were spent in Virginia, Illinois, Wisconsin and finally Texas, where Rusty worked as a technical recruiter in the oil industry. Then, suddenly, the American oil industry collapsed with low oil prices. Rusty and Gayle, along with thousands of American oil workers, experienced loss of jobs and income.
As Boleman Law clients know all too well, during a financial crisis, bad things can happen to anyone. The poor treatment Rusty and Gayle received as they sought solutions to financial problems led them to believe that there was a need for a change in bankruptcy law practice. At age 40, those experiences led Rusty to law school in Richmond -much later in life than most of his law school colleagues. He worked all through law school with Gayle at his side. After graduation, they founded Boleman Law Firm in 1991 with the goal of treating everyone who came to them seeking help with respect and dignity, while providing excellence in customer service and legal advice.
Rusty’s strong commitment to legal knowledge, ethics and community service has made him one of Virginia’s leading lawyers, Rated AV Preeminent® by Martindale-Hubbell and a Virginia Lawyers Weekly 2017 Virginia Leader in the Law. Almost 30 years later, the firm that bears his name has helped almost 110,000 Virginians regain their financial health. The 22 lawyers and 45 staff members carry on the traditions of excellence and compassion as they provide assistance to over 10,000 folks each year.
Rusty and Gayle are proud parents of one daughter and grandparents of two grandchildren. They and their two cats are now enjoying semi-retirement and spending time with their family. But, no matter where they are, they are never far from their other family, the lawyers and staff who strive every day to make Boleman Law Firm a safe and happy place for both clients and employees.