The Ministry of Economic Development suggested that debtors whose debt is deducted from their salaries and pensions should be able to keep their subsistence expenses, Izvestia reports.
Currently, the law allows withholding up to 50% of the debtors’ income. However, the amount of income does not matter and it does not matter which money is left for the individual after the deduction. As a result, people with low income are literally left without any means of living at all. Debtors can only dispute the amount of deduction in court but in most cases their request is rejected because it is difficult to prove the lack of other income in addition to official salary. The ministry suggests that the debtors be left with the amount of minimum wage, which is around RUR 10,000 ($150). For pensioners the subsistence level is around RUR 8,000 ($120).
The initiative should protect debtors with low income the number of which is at least 2 million. At the same time, it may close the opportunity of withholding debts from many Russians if their income is close to the subsistence level. The minimum wage currently equals subsistence level; however, a person’s salary can be even lower if he or she works part time. This will lead to banks no more issuing loans to people with low official income. Specifically, bankers will stop providing loans to pensioners because it will be almost impossible to enforce credit payments in case of delay.