Russian Justice Ministry develops bill on protection from “credit traps”
MOSCOW, March 14 (RAPSI) – Russia’s Justice Ministry is developing a bill on protection of Russian citizens from “credit traps” by introducing priority of debt repayment over penalty repayment, RIA Novosti reported on Tuesday.
The Ministry proposes to register money received from a consumer credit debtor as repayment of the principal debt before the demands for repayment of penalty costs.
This measure is going to prevent the growth of debt and improve the situation of consumers, the ministry explained.
According to the Justice Ministry, currently the order of debt repayment puts consumers in a position worse than one for entrepreneurs, which follow the general procedure provided by the Civil Code. The Code does not allow putting demands for repayment of penalties higher than ones for repayment of principal debt and corresponding interest.