Glad to See the Bankruptcy Act Unfrozen

We commend the Supreme Court's recent ruling reported in your newspaper, which declared that "bankruptcy declarations give credit card debtors a second chance at life" and that the focus should no longer be solely on creditors but also on protecting debtors.

For a long time, Taiwan's Bankruptcy Act has been little more than a formality. When consulted by citizens about bankruptcy, lawyers would directly tell them that filing for bankruptcy is bound to fail, leaving attorneys with no opportunity to apply their expertise in this field. According to Judicial Yuan statistics from the past five years, Taiwan averaged just over 300 bankruptcy applications per year, with a rejection rate exceeding 85%. Those who actually entered bankruptcy proceedings were as rare as phoenix feathers and unicorn horns.

Comparing these figures with other countries highlights the absurdity of our judicial practice. Neighboring Japan has a population of over 127 million; in 2003 alone, Japan recorded over 242,000 bankruptcy applications, whereas Taiwan had only 400. Japan's case volume was a staggering 600 times that of Taiwan. Even Singapore, with a population smaller than Taiwan's, saw as many as 18,600 cases that same year. This clearly demonstrates that Taiwan's judicial practice has fallen out of step with the world. To protect creditors and prevent bad actors from evading their debts through bankruptcy, the courts have turned away insolvent citizens. Ironically, this has led to a continuous cycle of debtors and their families committing suicide or resorting to crime to pay off debts, backfiring and creating even greater social turmoil.

The purpose of establishing a bankruptcy mechanism is to protect debtors, give those who have suffered temporary economic failure a chance at a fresh start, and build a fair operational system. If judicial practice only considers protecting creditors and disallows bankruptcy as a way to wipe the slate clean, it not only deviates from the legislative intent of the Bankruptcy Act but also leaves individuals facing temporary economic failure with no other way to resolve their lifelong burden of massive debts than suicide or crime. This severely undermines the protection of the right to survival for citizens in a constitutional state under the rule of law. We hope that the judicial practice community will place greater emphasis on the original legislative intent of protecting debtors in the future, allowing the Bankruptcy Act to fulfill its function of economic recovery and rehabilitation!

※ Published in: China Times / A19 / Forum