The "Pre-Investigation and Abandonment" Mechanism Facilitates the Rapid Resolution of Financial Disputes

Preface

In recent years, China's financial industry has been thriving, with the consumer finance market gradually emerging and the demand for small loans increasing. Along with this, there has been a surge in financial disputes over small debts, posing a significant challenge to financial institutions and grassroots courts. Currently, the procedures for financial institutions to handle small debt disputes are cumbersome and lengthy, which undoubtedly poses certain risks to the healthy development of the financial market.

To address the difficulty in handling small debt financial disputes, some localities have actively explored and introduced the "Pre-Investigation and Abandonment" mechanism. The introduction of this mechanism has undoubtedly provided strong support for the rapid resolution of financial disputes and is expected to optimize the judicial process to some extent, enhancing the risk control capabilities of financial institutions. So, how exactly can the "Pre-Investigation and Abandonment" mechanism assist in the rapid resolution of financial disputes? And what impact will it have on the financial market? This article will explore these questions.

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Financial Disputes Are Frequent, and Small Debt Disputes Pose a Problem

With the rapid development of consumer finance, more and more people choose to meet their consumption needs through financial means, including small loans. Compared to traditional bank credit loans, consumer finance companies offer small loans with lower thresholds and faster approval processes, which are highly favored by borrowers.

As the demand for small loans increases, so do financial disputes over small debts. It is understood that currently, small debt dispute cases in China are mainly distributed across various grassroots courts. Some of these cases involve low amounts of money but involve a large number of loan contracts, posing certain difficulties for the trial work of grassroots courts.

In current judicial practice, the handling period for small debt financial dispute cases is generally long, mainly because debtors often evade repayment obligations through various means, which hinders the exercise of creditors' rights by financial institutions. Once the execution procedure is initiated, it is also difficult to ascertain the debtor's property information, which poses certain difficulties for the execution work.

In addition, there are certain drawbacks in the current execution procedures. Some debtors take advantage of the deficiencies in the execution process and use illegal means to transfer and conceal property, leading to a serious situation of "distortion" in the execution process. Faced with this reality, financial institutions are also very troubled. They need to go through a series of trial procedures before they can finally apply for debt write-off, consuming a lot of time and labor costs.

The "Pre-Investigation and Abandonment" Mechanism Arrives to Help Resolve Small Debt Financial Disputes QuicklyIn response to the issues encountered in the handling of small debt financial disputes, some regions have begun to explore the implementation of a "pre-execution cancellation" mechanism. The so-called "pre-execution cancellation" refers to a process where, after the court accepts cases involving small financial loan contract disputes, it can issue a pre-execution cancellation certificate upon the creditor's application. This certificate verifies that financial loan contract disputes with a subject matter of less than 500,000 yuan, without collateral or with fewer than two guarantors, have entered the execution procedure, and the debtor already has executed cases indicating "no property available for execution."

Once this certificate is issued, the creditor can directly apply to the financial regulatory authorities for the write-off of the debt, without going through other execution procedures. Prior to the implementation of this system, banks had to go through a series of judicial procedures for debt write-offs, including filing lawsuits, acceptance, first-instance trials, second-instance trials, and so on. These procedures were cumbersome and time-consuming.

It can be said that the introduction of the "pre-execution cancellation" mechanism provides a more convenient pathway for financial institutions to write off non-performing debts and is also conducive to the rapid resolution of small debt financial disputes. The introduction of this mechanism can also prevent procedural idling, reduce unnecessary litigation and execution procedures, help optimize judicial processes, and improve the efficiency of judicial resource utilization.

The implementation of this mechanism also serves as a warning to debtors. Although "pre-execution cancellation" does not mean exemption from the obligation to repay, once a debtor is executed, they will be included in the "list of dishonest被执行人" (失信被执行人), which will have a certain impact on their personal credit record and may even lead to punitive measures such as restrictions on consumption and high-end consumption. Debtors need to fulfill their repayment obligations in accordance with the law and must not harbor any illusory hopes.

How to further improve the "pre-execution cancellation" mechanism

It can be said that the introduction of the "pre-execution cancellation" mechanism is of great significance for the rapid resolution of financial disputes and has also brought certain positive effects to the healthy development of the financial market. However, we should also be keenly aware that the introduction of this mechanism is only the beginning, and it still needs to be continuously summarized and improved in practice.

Financial institutions need to exercise caution when using the "pre-execution cancellation" certificate and should not abuse it, otherwise, it may cause certain damage to the legitimate rights and interests of the debtors. In the specific operation of the system, financial regulatory authorities should strengthen supervision and guidance over financial institutions to ensure that they can use the "pre-execution cancellation" certificate legally and in compliance, and handle debt issues fairly and justly.

The "pre-execution cancellation" mechanism should be further improved to enhance the transparency and fairness of debt write-offs, allowing more people to participate in the write-off process, including creditors, debtors, and the general public. Only when all aspects of the write-off process are effectively supervised can false procedures and injustices be effectively prevented, which is also more conducive to protecting the legitimate rights and interests of all parties involved.

In addition, the introduction of the "pre-execution cancellation" mechanism also poses new challenges to financial regulatory authorities. They need to continuously explore in practice how to better balance the risk prevention and control of the financial market and the accessibility of financial services, how to better guide and assist financial institutions in improving their risk identification and prevention capabilities, and ensure the stable development of the financial market.Conclusion

The introduction of the "pre-investigation abandonment" mechanism has provided a new approach and avenue for the resolution of current financial disputes, and has also offered certain insights for the regulatory work in the financial market. It is believed that with the continuous promotion and improvement of this mechanism, the rapid resolution of financial disputes will become more efficient, and it will also effectively promote the stable development of the financial market.

For financial institutions, they should fully recognize the importance of this mechanism, actively improve their risk prevention and identification capabilities, and carry out relevant risk management work. For the广大消费者, they should also enhance their self-protection awareness, consume rationally, borrow legally, and avoid getting into unnecessary financial disputes.

The "pre-investigation abandonment" mechanism is just one aspect of the resolution of financial disputes. It is hoped that through the introduction of this mechanism, it can also trigger more thinking and discussion, promote the continuous improvement of various systems in the financial market, and look forward to the joint efforts of the broad social public, so that the financial market can develop healthily and stably.