A bid to slash interest rates for people with court judgments against them for debt has been launched.

PLP Shadow Finance Minister David Burt tabled a Bill to cut interest rates on judgement debts in default from seven percent to three percent.

“Interest rates have fallen for a very long time — it’s so people who find themselves before the courts don’t have a very high rate of interest applied to their debts, adding to their distress,” Mr Burt said.

He explained that the seven percent rate was set years ago — before the global recession sent interest rates “through the floor”.

The move followed PLP MP Wayne Furbert’s bid to put an end to the threat of jail for people who fall behind on payments and end up in court.

“When we canvass, we hear things, and one of the things we hear about is people who may have these judgement debts applied to them,” Mr Burt said. “It seems a bit steep, considering interest rates have been at record lows for six years.

“It means anyone who may find themselves behind on a judgement debt doesn’t have a whole lot of interest to compound their distress.

“What we want to do is encourage people to get themselves out of a situation of debt, not compound it with what some people would call a usurious rate of interest.”

And Mr Burt said he hoped his Statutory Interest Rate Reduction Act 2014 would attract cross-party support.

“One would hope that the Government would support this,” he said.

“If the Government is interested in making sure people get out of debt and not compound it, they will support it and we look forward to their support.”

Mr Furbert last month tabled a Bill to outlaw prison time for debt — and said other methods, like taking a cut of wages or seizing property, should be used instead.

The Bill by Mr Furbert was backed by the Centre for Justice, and the Coalition for the Protection of Children.

The Coalition’s Sheelagh Cooper said that existing laws did say that people who genuinely couldn’t afford to pay a debt should not be imprisoned — but added that was “open to interpretation” during court proceedings.