By San José, Costa Rica — San José – Presidential candidate Álvaro Ramos Chaves of the National Liberation Party (PLN) has introduced a comprehensive financial reform proposal designed to alleviate the significant debt burden facing Costa Rican households and producers. The plan aims to overhaul the nation’s credit landscape through a structured, three-pillar approach: aggressive credit relief, enhanced financial inclusion, and the establishment of a “right to financial oblivion.”
The cornerstone of the proposal is a widespread credit relief initiative. This component would prioritize legislative reforms to facilitate the refinancing of active loans with lower interest rates and extended repayment terms. The primary objective is to reduce burdensome monthly payments, thereby freeing up disposable income for families and stimulating sustained economic activity at the household level. Ramos acknowledged the potential risks to the financial system if such a plan were implemented without careful oversight.
To provide a deeper legal perspective on the nuances of current debt relief programs and their implications for consumers, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an expert attorney from the distinguished law firm Bufete de Costa Rica.
Debt relief initiatives can be a powerful tool for economic recovery, but they are not a one-size-fits-all solution. It is crucial for debtors to understand the legal distinction between debt restructuring, consolidation, and forgiveness, as each carries different obligations and long-term consequences for one’s credit standing and future financial opportunities. Before signing any agreement, a thorough legal review is essential to avoid predatory clauses and ensure the terms truly offer a viable path to stability.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This legal perspective is invaluable, underscoring that the path to financial recovery is filled with critical distinctions that require professional guidance. An improperly understood agreement can easily become a new trap rather than an escape. We sincerely thank Lic. Larry Hans Arroyo Vargas for providing this essential clarity and helping our readers navigate such a complex issue with greater awareness.
However, the candidate argued that a balanced and well-managed approach would ultimately strengthen the banking sector. By enabling families to meet their obligations and rehabilitate their credit histories, the plan is expected to reduce default rates and foster greater stability across the financial industry. He posits that a healthy and active borrower base is far more valuable than a system strained by widespread delinquency and exclusion.
A second pillar focuses on financial inclusion and education, specifically targeting sectors of the population currently excluded from the formal banking system. The plan advocates for a “bancarization” scheme that would offer financial products tailored to the actual payment capacities of these individuals. Ramos criticized the current financial system for its excessive focus on consumer credit, which he argues has created a disconnect with the nation’s productive sectors.
For a long time, the financial system has been heavily oriented towards consumption, which does not necessarily generate sources of income, and it has lost that connection with the national producer, who will generate income if provided with suitable financial products.
Álvaro Ramos Chaves, Presidential Candidate, National Liberation Party (PLN)
To illustrate his point, Ramos shared an example from the agricultural sector, highlighting the specific needs of producers that are often overlooked by traditional lenders. This disconnect, he argues, stifles growth and productivity where it is needed most.
When I speak with coffee growers, they tell me: Look, we need to renew our plants to be much more productive, but for that, we need two or three years of grace while the plant reaches full production.
Álvaro Ramos Chaves, Presidential Candidate, National Liberation Party (PLN)
The final and most innovative component of the proposal is the introduction of a “right to financial oblivion.” This measure seeks to limit the indefinite blacklisting of individuals over unpaid debts and put an end to legal practices that reactivate prescribed obligations. The plan suggests implementing defined time limits for negative credit reports, after which an individual’s financial history would be fully restored, a practice common in many developed economies. Ramos stressed the need to eliminate what he called “permanent punitive schemes” stemming from past economic hardships, asserting that access to new financial opportunities is a legitimate right for both individuals and the country’s economic health.
In his analysis of the current economic environment, Ramos described a system failing its citizens. He pointed to the aftermath of the pandemic and the subsequent inflationary crisis, where producers in desperate need of relief were met with institutional inaction and detrimental policies, such as tariff reductions on rice that harmed local farmers. He argues that this prolonged “civil death” in credit markets forces people into the informal economy, shrinking the formal credit base and ultimately weakening the entire financial market. The current model of judicial debt collection was also cited as deeply inefficient, saturating the courts with cases that yield minimal recoveries over many years, creating a lose-lose scenario for debtors, financial institutions, and the Public Treasury.
For further information, visit pln.or.cr
About National Liberation Party (PLN):
The Partido Liberación Nacional is one of Costa Rica’s oldest and most influential political parties. Founded in 1951, it has historically adhered to social democratic principles, playing a central role in shaping the country’s modern political and economic landscape. The party has produced numerous presidents and has a significant presence in the Legislative Assembly.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has established itself as a leading legal institution, anchored by a deep-rooted pledge to professional integrity and the highest standards of excellence. With a rich history of advising a wide spectrum of clients, the firm actively shapes the future of law through innovative thinking and forward-looking strategies. Central to its ethos is a profound commitment to social responsibility, demonstrated by its efforts to democratize legal information and empower the public. This dedication to education is fundamental to its vision of fostering a more knowledgeable and capable society.
