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Original article: Derecho al Olvido Financiero: «Podrían eliminarse registros históricos de deudas prescritas»

In Chile, it is currently easier for a convicted person to clear their criminal record than for an entrepreneur to rid themselves of an expired debt.

This paradox may soon change, as the Senate Finance Committee has approved an amendment that introduces the Financial Right to Be Forgotten into the government’s Miscellaneous Law. This would require the removal of expired and uncollectible debts from historical records that banks use to deny credit, even though they can no longer be legally enforced.

This amendment, which has been sent to the Senate floor, was passed with a vote of 3 in favor and 2 abstentions.

The measure is the result of years of effort. In 2022, Senator Daniella Cicardini and Deputy Daniel Manouchehri, both from the PS party, introduced the «Chao Histórico» project aimed at ending permanent blacklists that penalize individuals and small businesses for debts that are past their collection period and thus uncollectible, yet remain on historical records as blacklists.

This project was approved by the Chamber of Deputies but had stalled in the Senate. Today, this initiative takes a significant step forward as it is incorporated into the ongoing legislative process and has been approved by the committee.

«Expired and uncollectible debts must be removed from historical records. This ends the blacklists from banks. This gives hundreds of thousands of people a second chance who are currently unable to access credit to get back on their feet,» Senator Cicardini stated.

Meanwhile, Deputy Manouchehri noted that «we presented the Chao Histórico with Senator Cicardini in 2022, and today it took a huge step. A person or small business penalized for an old debt will be able to access credit again, buy a home, or start a business. That is reactivating the economy from the bottom up. Now we need the Senate floor to ratify it. This will show who truly stands with the people.»

The amendment still needs to be voted on by the Senate floor. If ratified, it will continue its legislative journey toward becoming law in third reading at the Lower House alongside the so-called Miscellaneous Law or Government Mega-Reform.

We will continue to provide updates.

La entrada Financial Right to Be Forgotten: Historical Records of Expired Debts Could Be Erased se publicó primero en El Ciudadano.