What does debt custody mean?

Debt custody refers to the fact that intermediaries reach an agreement with debtors or creditors in accordance with market principles and with the support of relevant policies to transfer debts to creditors or compensate them. Intermediaries with such policies will operate and manage in accordance with commercial laws.

Debt trusteeship is a high-risk commercial behavior, which can clear up a large number of bad debts, alleviate the debt problems of some enterprises or individuals, and reduce many civil disputes for the government. So how to solve a large number of bad debts is a problem that has been discussed in theory and practice. One of the better ways is neutral debt custody, which rationally allocates assets according to market principles and transfers its debts and non-performing assets to help balance the debts of both parties and the interests of the three parties.

What are the benefits of personal debt custody?

Debt custody is a high-risk business behavior, which is conducive to clearing up bad debts of banks and reducing the debt burden of a large number of state-owned enterprises. Its function is equivalent to "garbage collection and treatment plant", creating conditions for the reorganization of enterprises and banks. Therefore, the state should provide policy support to the enterprises it manages.