"Radical" debt relief plan pitched to help Dutch people

Credit cards (Source: Wikimedia/Sprinno)
Credit cards (Source: Wikimedia/Sprinno). (Credit cards (Source: Wikimedia/Sprinno))

The debts of individuals must be bought on a large scale by a national investment fund.

This is the plan of the Catholic development organization Cordaid. Amsterdam's former councilor Pieter Hilhorst is also involved.

There will be two test projects, in which a bank and a charity fund will buy debt.

The initiators wants a radically different approach to debt counselling. The focus on dept repayment has to go. Hilhorst points to the large number of people who fall out of counselling programs prematurely and the large group of debtors who find themselves in major financial problems at a later stage. It seems that the current approach does not bring about a lasting change in behavior.

According to Hilhorst this is because the counselling brings a drastic intervention in the lives of people, in which every extra earned euro goes to the creditors. "The current motto is: those who owe has to pay, rather than: those who have debts must gain perspective."

"From a moral viewpoint it is understandable, from a pragmatic perspective it is stupid," he writes in a letter to the editor today in Het Parool.

If the current regulations make Hilhorst's desired approach impossible, he believes it is better to buy the debt.

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