This Statute is formulated for the purpose of enabling consumers with debts to clear their debts according to the process set out in this Statute, to adjust the consumers' rights and obligations with their creditors and other interested parties, to assure fair repayment of creditors, and to promote financial rehabilitation of consumers and sound development of the social economy.

The term Consumers as used in this Statute refers to natural persons who have not engaged in business activities within five years or have engaged in small business activities.
"Small business" in the preceding paragraph refers to a business of which gross income per month is less than NTD 200,000.
The amount specified in the preceding paragraph may be increased or reduced by an order of the Judicial Yuan if circumstance so requires.

If a debtor is unable or might be unable to repay his/her debts, he/she may clear his/her debts according to the rehabilitation or liquidation process set out by this Statute.

If a debtor is a person without capacity for juridical acts or a person with limited capacity for juridical acts, the provisions of this Statute regarding the obligations and penalties of the debtor shall also apply to his/her statutory agent.

Rehabilitation and liquidation matters shall be under the exclusive jurisdiction of the district court where the domicile or residence of the debtor is located.
If the court of jurisdiction cannot be determined under the preceding paragraph, the court at the place where the majority of the debtor's property is located shall have jurisdiction.

The district court shall establish either a dedicated tribunal for consumer debt clearance or a dedicated division for settlement of consumer debt clearance matters.

Each application for rehabilitation or liquidation shall require an application fee of NTD 1,000.
The postal service fee and the travel expense of court personnel will not be otherwise charged. However, if the amount of the expense required exceeds the amount of application fee charged, the excess amount shall be charged according to the actual amount expensed.
In respect of the expense required under the preceding paragraph and the fee necessary for the rehabilitation or liquidation process, the court may fix a reasonable amount, and determine a date and order the applicants to make prepayment of such amount within a fixed period. If the prepayment is not made, unless otherwise provided for, the court may dismiss the application for rehabilitation or liquidation.

A debtor who applies for liquidation but has no financial means to pay the fee under the preceding Article may apply to the court for temporary exemption from payment.
The reason for the debtor's lack of financial means to pay the fee shall be explained.
No appeal may be taken from a ruling of the court concerning the approval or denial of temporary exemption from payment.
The fee for which payment is temporarily exempted under the first paragraph of this Article shall be advanced by the national treasury.

If the application for rehabilitation or liquidation fails to conform to the applicable legal requirements, the court shall dismiss the application. However, if such failure can be corrected, the court shall determine a period and order the correction first.

The court shall investigate the necessary facts and evidence on its own initiative, and may make inquiries with taxation or other agencies or organizations.
In order to investigate the facts, the court may order any related person or statutory agent to be present in person or state his/her opinions in writing.
The court's investigation and interrogation may not be made public.

Relatives of the debtor, persons who manage the property for the debtor, or other related persons shall have the obligation to reply when the court inquires about the debtor's property, income, and business conditions.
If any person mentioned in the preceding paragraph does not respond to the court's inquiry without reason or makes a false statement, the court may impose a fine of NTD 3,000 to NTD 30,000.
If any person to whom this article applies has been fined under the preceding paragraph, but makes a false statement or fails to reply without reason, the court may impose additional punishment on him/her.
The court shall give the punished person an opportunity to state his/her opinions before the rulings under the preceding two paragraphs.
The rulings under paragraphs 2 and 3 of this article shall be suspended when an appeal is pending.

Adjudication for rehabilitation or liquidation matters shall be determined by a single judge.
The appeal shall be heard by judges sitting in council of the district court with jurisdiction.
If an appeal is dismissed by an appeal court on ground of nonconformity with the law, no re-appeal may be taken. Notwithstanding, an objection may be filed with the original court.
For the objection under the preceding paragraph, the provisions of paragraphs 2 and 3 of Article 484 of the Taiwan Code of Civil Procedure shall apply mutatis mutandis.
Except as provided in the preceding two paragraphs, a re-appeal may be taken from a ruling made by the appeal court only when it is based on the ground that there is a manifest error in the application of the law.
No application for rehearing may be made with respect to the ruling rendered under this Statute.

Before rendering a ruling dismissing the application for rehabilitation or liquidation, the court shall give the debtor the opportunity to state his/her opinions before the court.

After the court approves initiation of the rehabilitation or liquidation process, the debtor may not withdraw the application for rehabilitation or liquidation without the consent of all creditors who have declared their unsecured and unprivileged claims. The same shall apply to any case when the disposition of preservation has been made under Article 19 before the court's ruling.
The withdrawal of the application for rehabilitation or liquidation shall be made by pleadings.
The creditors under paragraph 1 of this article shall be deemed to have agreed to the withdrawal if they fail to raise an objection within 10 days from the date of service of the withdrawal pleading.

If the debtor has applied for rehabilitation or liquidation under this Statute, creditors may not apply for declaration of bankruptcy of the debtor in accordance with the Bankruptcy Act.

Each public notice under this Statute shall be publicly announced in the court's bulletin, or on its information website or other proper place; the court may also order that the notice be published in a bulletin, newspaper, or by any other method, if it deems necessary.
Unless otherwise provided for in this Statute, each public notice under the preceding Paragraph shall have the effect of service on all interested parties from the day following the last announcement date.

Regarding the rehabilitation or liquidation process, unless otherwise provided for in this Statute, the provision of the Taiwan Code of Civil Procedure shall apply mutatis mutandis.

After ruling on the initiation of the rehabilitation or liquidation process, the court may order the judicial associate officer to conduct the rehabilitation or liquidation process; and, if necessary, may select one attorney, CPA, or another proper natural person or juristic person as the supervisor or the administrator.
If it is deemed necessary, the court may order the supervisor or the administrator to provide reasonable security.
Remunerations to the supervisor or the administrator shall be determined by the court and shall have priority to be paid off.
Rules of selection of juristic persons as the supervisors or the administrators by the court shall be determined by the Judicial Yuan.
If the court orders a judicial associate officer to conduct the rehabilitation or liquidation process, but does not select a supervisor or administrator, unless otherwise provided for or otherwise restricted by the court, the procedure to be conducted by the court and the supervisor or administrator shall be conducted by the judicial associate officer.
If after ruling on the initiation of the rehabilitation or liquidation process, the court neither selects a supervisor or administrator, nor orders a judicial associate officer to conduct the rehabilitation or liquidation process, unless otherwise provided for, the duties of the supervisor or administrator shall be performed by the court.

The supervisor or administrator shall be subject to the direction and supervision of the court. The court may order him/her to make a report on clearance affairs and make other necessary investigations from time to time.
The court may replace the supervisor or administrator based on the resolution of the creditors' meeting or on its own initiative. However, before the replacement, the court shall provide him/her with the opportunity to state his/her opinions.

The supervisor or administrator shall perform his/her duties with due care of a good administrator; and may not resign from the duties without approval of the court.
If the supervisor or administrator breaches the obligations under the preceding paragraph, resulting in damage to the interested parties, he/she shall be liable for compensation of damage.

Before ruling on the application for rehabilitation or liquidation, the court may, on application of the interested parties or on its own initiative, make the following order of preservation by a ruling.
1. Disposition of preservation of the debtor's property.
2. Restriction on the debtor's performance of debts and the creditors' exercise of claims against the debtor.
3. Suspension of the compulsory enforcement proceedings of the debtor's property.
4. Disposition of preservation of the beneficiary's or the acquiring person's property.
5. Other necessary dispositions of preservation.
Unless the initiation of the rehabilitation or liquidation process has been ruled on by the court, the disposition of preservation under the preceding Paragraph may not exceed 60 days. If necessary, the court may, on application of the interested parties or on its own initiative, extend such period once more for a further period of not more than 60 days.
When the application for rehabilitation or liquidation is dismissed or if it is deemed necessary, the court may, on application of the interested parties or on its own initiative, change or revoke the disposition of preservation under paragraph 1 of this article.
Before expiration of the period under paragraph 2 of this article, if the application for rehabilitation or liquidation is dismissed and such dismissal becomes final, the disposition of preservation under Paragraphs 1 and 3 shall be inoperative.
The disposition of preservation under paragraphs 1 and 3 of this article shall be executed by the competent court on its own initiative by applying mutatis mutandis the provisions of the Compulsory Enforcement Act with regard to provisional seizure and provisional injunction.
Public notice shall be effectuated for any ruling rendered under Paragraphs 1 to 3 of this article.

Unless otherwise provided for in this Statute, the following acts of the debtor may be revoked by the supervisor or the administrator:
1. Any gratuitous act of the debtor within 2 years before the court's ruling on the initiation of the rehabilitation or liquidation process, which act is likely prejudicial to the rights of creditors,
2. Any non-gratuitous act of the debtor within 2 years before the court's ruling on the initiation of the rehabilitation or liquidation process, which act is likely to be prejudicial to the rights of creditors, if the debtor knew of the likelihood of prejudice at the time of doing that act and a beneficiary of that act had knowledge of the act knew of the circumstance at the time of receiving the benefit.
3. Any provision of security, repayment of debts or other act of the debtor within 6 months before the court's ruling on the initiation of the rehabilitation or liquidation process, which act is likely prejudicial to the rights of creditors, if the likelihood of prejudice to the rights of creditors is known to the beneficiaries when they receive their benefits.
4. Any provision of security, repayment of debts or other act of the debtors within 6 months before the court's ruling on the initiation of the rehabilitation or liquidation process, which is likely prejudicial to the rights of creditors, if such act is not his/her obligation or the obligation has not been due for repayment.
Any non-gratuitous act between the debtor and his/her spouse, lineal relative or family member, which involves the debtor's disposition of his/her property at a price lower than half of market price shall be deemed a gratuitous act.
If the debtor performs any act under subparagraph 3 of paragraph 1 of this article with his/her spouse, lineal relative or family member, it shall be presumed that the beneficiary knew such act is likely prejudicial to rights of creditors at the time he/she received the benefit.
If the security provided under Subparagraph 3 of Paragraph 1 has been undertaken and notarized earlier than 6 months before the date of the court's ruling on the initiation of the rehabilitation or liquidation process ruled by the court, such security may not be revoked.
The right of revocation under paragraph 1 of this article s extinguished by prescription if it is not exercised within one year from the day following the court's ruling on the initiation of the rehabilitation or liquidation process.
If the debtor is under any obligation of performance due to a revocable act, even if the right of revocation is extinguished due to the preceding paragraph, the debtor or the administrator may refuse the performance.
The provisions of paragraphs 2 and 3 of this article shall apply mutatis mutandis to the non-gratuitous acts done between the debtor and the person specified in Article 4 and their spouses, lineal relatives or family members.

After any act under paragraph 1 of the preceding article is revoked, the following provisions shall apply:
1. The beneficiary is liable for restoration to the status quo ante. However, a bona fide beneficiary of gratuitous acts is liable only for return of the existing interest in money or other property which the debtor previously received from the beneficiary, or repayment of the price of that interest.
2. The beneficiary may request for return of his/her money or other property to the debtor; if such money or other property cannot be returned, he/she may request for repayment of the amount of its price and shall have the priority to be paid off.
If the beneficiary has received other money or other property in lieu of the money or other property originally agreed, the effect of his/her claim shall be restored when the money or other property received is returned or the amount of its price is repaid.

The right of revocation under Article 20 may be exercised by any person who acquires property of the debtor under any of thefollowing circumstances:
1. The acquiring person knew that his/her predecessor had the ground for revocation at the time of acquiring.
2. The acquiring person is the spouse, lineal relative or family member of the debtor or the person defined under Article 4 or has had such relationship, unless the acquiring person can certify that he/she did not know of the ground of his/her predecessor for revocation at the time of acquiring.
3. It was acquired without compensation by the acquiring person.
The provision of subparagraph 1 of paragraph 1 of the preceding article shall apply mutatis mutandis to the circumstance under the preceding paragraph.

After the debtor has applied for rehabilitation or liquidation, his/her gratuitous acts shall be inoperative. His/her non-gratuitous acts beyond normal administrative acts or acts within the normal business scope, shall have no effect against the creditor if the counterparty knew of the fact at the time of such acts.
For any inoperative acts specified in the preceding paragraph, the supervisor or the administrator may request the counterparty and the acquiring person to return the money or other property they accepted, unless such money or other property was bona fide acquired with compensation by the acquiring person.

After the court has ruled on the initiation of the rehabilitation or liquidation process, if either party has not completely performed the obligations under a bilateral contract executed by the debtor, the supervisor or the administrator may terminate or rescind the contract, unless it is obviously unfair under the circumstance.
In the circumstance under the preceding paragraph, the other party may demand the supervisor or the administrator to give a definite reply whether he/she would terminate or rescind the contract within 20 days of the demand. If the supervisor fails to give the definite reply within the prescribed period, he/she shall be deprived of the right to termination or rescission; if the administrator fails to give the definite reply, he/she shall be deemed to have terminated or rescinded the contract.

When the contract is terminated or rescinded in accordance with the provisions of the preceding article, the other party may raise an objection within 10 days.
The court shall rule on any objection under the preceding paragraph.
In case of appeal from a ruling under the preceding paragraph, the appeal court shall conduct an oral argument before its ruling.
When the rulings under the preceding two paragraphs become final, such rulings shall have the same effect as a final judgment.

When a contract is terminated or rescinded in accordance with the provisions of article 24, the other party may exercise his/her rights to the claims of rehabilitation or liquidation for the damage caused.
When the contract is terminated or rescinded in accordance with provision of Article 24, the other party may request for return of the money or other property, interest or profit that should be returned by the debtor. If it cannot be returned, such other party may request for repayment of the amount of its price and shall have the priority to be paid off.

If any subrogation of litigation, withdrawal of litigation or other litigation is brought by a creditor for the preservation of rights relating to the property of the debtor before the court's ruling on the initiation of the rehabilitation or liquidation process, and has not been concluded at the time of initiation of the rehabilitation or liquidation process, the proceeding of such litigation shall be suspended automatically until the supervisor or the administrator resumes the litigation or the rehabilitation or liquidation process is terminated or concluded.

Any claim against the debtor that was established before the court's ruling on the initiation of the rehabilitation or liquidation process shall be a claim in rehabilitation or liquidation.
Unless otherwise provided for in this Statute, the claims under the preceding paragraph, regardless of the existence of any party's right to court enforcement, may not be exercised unless they are made in accordance with the rehabilitation or liquidation process.

The claims under the following Subparagraphs are inferior claims and may be repaid only out of the balance after other claims are repaid. The same shall apply to the case after termination or conclusion of the rehabilitation or liquidation process:
1. The portion exceeding 2% of annual rate of the principal of the total amount of damage compensation, default penalty and other expenses arising from the default on performance of monetary debts before the court's ruling on the initiation of the rehabilitation or liquidation process. The same shall apply to any damage compensation, default penalty or other expense for secured or preferential claims.
2. Interests accrued after the court's ruling on the initiation of the rehabilitation or liquidation process.
3. Damage compensation and default penalties arising from the default on the performance of debts after the court's ruling on the initiation of the rehabilitation or liquidation process. The same shall apply to damage compensation and default penalties for secured or preferential claims.
4. Penalties, fines, default surcharges, overdue charges, delinquent reporting surcharges, late report fees, non-reporting surcharges, and additional levies.
If there are provisions in the law for claims under subparagraph 4 of the preceding paragraph, such provisions shall govern.
The creditor may not request the debtor to return the expenses paid for his/her participation in the rehabilitation or liquidation process.

If several persons are jointly and severally liable for the full repayment of the same money or other property, and if one or several or all of them are subject to the court's ruling on the initiation of the rehabilitation or liquidation process, the creditor may exercise his/her right to the existing amount of the claim at the time of the ruling against each rehabilitation debtor or the liquidation estate.
If the guarantor is subject to the court's ruling on the initiation of the rehabilitation or liquidation process, the creditor may exercise his/her right to the existing amount of the claim against the guarantor at the time of the ruling.

If several persons are jointly and severally liable for the full repayment of the same money or other property, and if one or several of them are subject to the court's ruling on the initiation of the rehabilitation or liquidation process, other joint debtors may exercise their rights to the amount that they may claim for repayment in the future; unless the creditor has exercised his/her right to the existing amount of the claim at the time of initiation of the rehabilitation or liquidation process.
The provision of the preceding paragraph shall apply mutatis mutandis to the person providing the security for the debtor or the guarantor of the debtor.

If the issuer or endorser of a bill of exchange is subject to the court's ruling on the initiation of the rehabilitation or liquidation process, and if the payer or other person who prepares to pay the bill of exchange makes acceptance or payment thereof without knowledge of such fact, the claim arising therefrom may be exercised as a right to the claim in rehabilitation or liquidation.
The provision of the preceding paragraph shall apply mutatis mutandis to checks and other securities of which objects are monetary payment or other things.

Any claim that has not yet become due shall be deemed to have become due at the time of the court's ruling on the initiation of the rehabilitation or liquidation process.
Regarding a claim without interest that becomes due only after the court's ruling on the initiation of the rehabilitation or liquidation process, the amount of such claim shall be deducted with the statutory interest accrued for the period from the court's ruling on the initiation of the rehabilitation or liquidation process until the due date.

The creditor shall, within the period for declaration of claims as fixed by the court, submit a description of claims, which shall include categories, amounts and priority of his/her claims, as well as supporting documents, if any.
If the creditor is a financial institution or an asset management company, the description of claims under the preceding paragraph shall also state the following:
1. The principal of the outstanding claim and the occurrence date of the claim.
2. The amount of interest and default penalties, and their respective calculation methods.
3. The amount already repaid by the debtor.
4. The sequence and amount of offset of expenses, interest and principal against the amount under the preceding subparagraph.
5. The account number at a financial institution used for repayment, the handling person, and the contact method.
6. Other matter requested by the debtor which is considered proper by the court.
If the creditor fails to submit the description of claims in accordance with the provision of the preceding paragraph, the court shall, on application of the debtor, determine a date and order the creditor to make all necessary corrections. If no correction is made within such period, the court, in rendering the ruling under Article 36, shall take into consideration any evidence presented during oral argument.
If a creditor cannot provide the declaration of claims within the period prescribed under paragraph 1 of this article due to a cause not attributable to him/her, he/she may supplement the declaration within 10 days after that cause is extinguished; however, the extra time allowed may not go beyond the period for supplemental declaration of claims prescribed by the court.
If the creditor declares his/her claim after the prescribed period, the supervisor or the administrator shall report to the court for dismissal of such declaration by a ruling; however, this shall not apply to the circumstances under the preceding paragraph.
After receipt of the declarations of claims, the supervisor or the administrator shall prepare the list of claims after expiration of the prescribed period for supplemental declaration of claims. Such list shall be publicized by the court and shall be served on the debtor and creditors whose residence, office, or business place are known.
If neither a supervisor nor an administrator is selected, the list of claims under the preceding paragraph shall be prepared by the court.

Any relevant statute of limitations shall be tolled by the declaration of claims.
At the end of the prescription period, if the prescription cannot be interrupted in accordance with the provision of the preceding Paragraph for cause not attributable to the creditor, the prescription shall not be completed within one month from the time when the hindering cause is extinguished.

If the creditor has a preferential right, pledge, mortgage, lien or other security right in rem over specific property of the debtor, he/she shall declare such claims in accordance with provisions of this Statute.
If necessary, the supervisor or the administrator may request the creditor under the preceding paragraph to surrender the object of his/her right or to assess the amount of its price. If the creditor fails to surrender it without any justifiable reason, the supervisor or the administrator may apply to the court for handover of such object.

Regarding the claims and their categories, amounts or priorities declared by the creditor, the debtor or other creditors may raise an objection within 10 days from the next day following the service of the list of claims, and the supervisor, administrator or other interested party may raise an objection within 10 days from the day following the last disclosure of the list of claims.
The objection under the preceding paragraph shall be ruled on by the court, and shall be served on the objector and the creditors subject to the objection.
For any appeal from a ruling under the preceding paragraph, the appeal court shall conduct the oral argument before rendering its ruling.
The appeal from the ruling under paragraph 2 of this article shall not be prejudicial to the resolution of the creditors' meeting. The creditor subject to the objection may exercise his/her right according to the content of such ruling before the ruling becomes final. However, the amount repaid according to the rehabilitation or liquidation process shall be lodged with the court.
The claims declared by the creditor, which are not subject to objection in accordance with the provisions of paragraph 1 of this article, or regarding which the objection is ruled upon and becomes final, shall be deemed as final and have same effect as a final judgment on the debtor and all creditors.

If the court's ruling on the dispute over the participation of a claim and its category, amount or priority becomes final, the supervisor, the administrator or the court shall revise and publicize the list of claims.

If necessary, the court may convene the creditors' meeting on its own initiative.
When convening the creditors' meeting, the court shall predetermine the date, place and matters to be discussed at the meeting and shall publicly announce them within 5 days before the predetermined date.

The creditors' meeting shall be directed by the court.
The supervisor or the administrator shall appear at the creditors' meeting.

A creditor may appoint a proxy to attend the creditors' meeting on his/her behalf by producing a written power of attorney. However, the court may limit the total number of persons represented by a proxy to one-tenth of the number of the creditors declaring their rights.

The debtor shall attend the creditors' meeting and shall reply to inquiries of the court, the supervisor, the administrator, or the creditor.