Spending ban on debtors

Debtors who refuse to pay up have been banned from spending by the Intermediate People's Court in Changsha.

According to the Legal Daily, the court announced in January that 73 of the city's enterprises and individual debtors had to repay debts before they were allowed to spend on unnecessary consumer goods.

Spending at luxury restaurants and shopping centres, as well as extravagant forms of entertainment, were banned.

Debtors also faced severe restrictions on transportation, telecommunications equipment and housing expenditure. The provincial Government set a minimum living standard allowance for the debtors.

All had been previously ordered by the court to repay debts, but had refused to comply.

Instead, many continued to spend money as if they did not owe anything, said the paper.

Under the new ruling, they would be treated as if they had committed a crime. They would be detained and fined if they went against the court's order and were found spending money.

A system had been set up by the court for people to inform on the debtors.

Mainland courts have a hard time in getting debtors to pay.

One popular method to induce repayment is to cause the debtors to lose face.

Initially, the court hoped to embarrass 138 debtors into paying back their debts by announcing their names in the newspapers and on television and radio.

Only half of them were ashamed enough to pay back arrears totalling more than 50 million yuan (HK$46.5 million).

The move in the Hunan provincial capital is part of a nationwide effort by courts to reinforce orders which have been ignored.

Some of the cases go back several years.