Writing off debt for mortgage borrowers in Kazakhstan is possible! An appropriate bill has been drafted

The Government of Kazakhstan is considering a draft law providing for the possibility of writing off the mortgage debts of insolvent Kazakhstanis. The bill “On Restoring the Solvency of Citizens of the Republic of Kazakhstan” was developed by the Committee of State Revenues of the Ministry of Finance of the Republic of Kazakhstan and is now actively discussed.

In the Bill, there are two main options for solving the problem:
1. A full write-off of the loan debt and keeping of housing for citizens belonging to socially vulnerable segments of the population (this status and financial capabilities of debtors will be the criteria for making decisions on “forgiving” the debt).
2. Debt collection in Kazakhstan from other mortgagors will be effected by repayment of debt received from the sale of collateral by means (if other measures of settlement of the debt do not yield results).

This does not mean that debts will be written off to everyone without exception! Now the project is actively discussed, since the state program for refinancing mortgage loans was completed in 2017, the situation in this area has developed crisisly, and the current legislation is not effective enough.

Debtors are in a difficult situation, creditors can not return their money, debts on execution sheets are not collected due to lack of property and income. At the same time, the number of citizens having problematic tax and credit debts is steadily growing.

The Government of the Republic of Kazakhstan counts on the fact that most of the problems will be solved by the above two options. The rest debtors will be eliminated by imposing on the creditors the obligation to offer debtors deferrals and installments of payments, write off penalties and parts of arrears, apply other sparing ways of resolving problems.