Settling Multiple Debts in Japan

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If you bear too much debt and cannot pay your debt any more, you are advised to consult an attorney (“Bengoshi” in Japanese). In Japan, there are generally three methods to solve multiple debts with help of an attorney.

1) Voluntary Liquidation (“Nin-i Seiri”)
2) Rehabilitation for Individuals (“Kojin Saisei”)
3) Bankruptcy (“Hasan”)

1) Voluntary Liquidation

Attorney will negotiate with each creditor for installment payment. The period of installment payment is usually 3 to 5 years.

Attorney fee for this procedure is usually 43,200 yen per creditor. (If there is only one creditor, the fee will be 64,800 yen.)

2) Rehabilitation procedure for Individuals

Attorney will make a petition to the court to reduce the amount of debt. Also the attorney will make an installment payment plan for 3 years (in some cases 5 years).

The advantage of this procedure is that you can solve your debt problem without losing the ownership of your house.

There are some conditions for using this procedure. For example, your debt must be less than 50 million yen (excepting your housing loan), and you are required to have steady income.

Attorney fee for this procedure is usually around 216,000 yen to 648,000 yen. It may differ by the complexity of the actual case.

3) Bankruptcy

Attorney will make a petition to the court to release the debtor from payment of the debt.

The debtor will be released from most debt, but there are some demerits.
– You cannot keep your property which worth over 200,000 yen.
– You cannot get some kinds of jobs such as guards.

If your asset is less than 200,000 yen and there are no problematic acts such as gambling, simple procedure called simultaneous abolition of bankruptcy (“Douji-Haishi” in Japanese) is used. In this case, you can file a petition for bankruptcy in the actual cost of around 20,000 yen in addition to attorney fee.

In other cases (such as your asset being 200,000 yen or more), bankruptcy trustee will be appointed by the court. In this case, you will need to prepare at least 200,000 yen as the expense for the bankruptcy trustee, in addition to attorney fee.

Attorney fee for individual bankruptcy is around 216,000 yen to 648,000 yen. It may differ by the complexity of the actual case.

If you need help about your debt, don’t hesitate to contact us.

For mutiple debt cases, we can offer installment payment of attorney fee. Also, if you don’t have much income, we may be able to handle your case using the legal aid from Japan Legal Support Center.

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