Amsterdam will reportedly buy out the debts of its young adult population to give them the opportunity to have a fresh start.
A new trial project aims to curb the growth in money borrowing by young Dutch adults.
A municipal credit bank will negotiate to buy young people's debts off creditors. Under the new scheme, they will then by issued with a loan to repay based on their means.
Those young adults who enrol in training or educational programmes could see have more of their debts cancelled, under the new programme.
Creditors will be given €750 (about $1250) as an incentive to pass the debt onto the council's bank.
"Debts cause a lot of stress. And in the case of young people, debts often determine their future," said Amsterdam's deputy mayor, Marjolein Moorman, quoted by the Guardian.
"The majority of these young people started out in arrears and, due to bad luck or ignorance, found themselves in a situation where they could not get out without help. That is why we are now going to help them so that they can make a new start."
Each person will also be appointed a coach who will work with them on a "guidance plan" to restructure their finances.
The trial starts next month.