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Faced with a new reality you will find from the first months of 2021 Thousands of homes and companies are currently overloaded with debts with the State, insurance funds and banks, worth about 234,000 million euros. The new bankruptcy law where it will be voted tomorrow in Parliament and is expected to take effect next January and replace all under-debt settlement tools (over-indebted households, first-home protection, extrajudicial mechanism etc.), giving the borrowers the following two alternatives: either settle out of court their debts or go bankrupt, returning to normal after one to three years.
the protothema.gr presents the main points of the bill, then and “face lift” recently done by the Minister of Finance, Mr. Christos Staikouras, after listening to market participants.
Extrajudicial mechanism
Right application to the extrajudicial mechanism has any natural or legal person with insolvency capacity unless:
a) At least 90% of your total debts are with a creditor or your total debts do not exceed the amount of 10,000 euros.
second) Has served or debts a day to all its creditors and does not invoke facts that indicate a deterioration of its financial situation – due to a decrease in income or an increase in expenses – at least 20%.
By submitting the request on a special platform designed by Special Secretariat for Private Debt Management (BSEC) the borrower consents to the lifting of his banking and fiscal secrecy. Most financial institutions (banks and administrators) are necessary to start the process. If the “green” light is given, then Suspension of seizures and auctions is expected. and a proposal for the settlement of total debts in up to 240 installments, resulting from a computer tool (that is, its determination will be made known in a relevant ministerial decision, to be issued in the next two months). If there is no debt with the State, banks and administrators can present another proposal, without the calculation tool. Alternatively they can also mediate on request – within 10 days – by the borrower. The termination of the contract occurs in the event that the latter expires, resulting in the total amount the arrears exceed in total the value of three installments or the value of at least 3% of the total amount owed.
Installment payment subsidy
The new law stipulates that those have arranged or have not been delayed for more than 90 days your debts with financial institutions, public institutions and social security, a grant is awarded for five years from the date of application, with the maximum amount that is established as follows:
a) For the applicant: 70 euros per month.
second) For each additional member of the household an increase of 35 euros per month.
C) The single parent family has an additional surcharge of 35 euros per month.
re) Households with an unprotected child receive an additional surcharge of 35 euros per month for each unprotected child.
re) The maximum limit of the housing allowance is set at 210 euros per month, regardless of the composition of the household.
«The installment subsidy cannot exceed the following limits: a) Speed 80% on the monthly fee, in the case of loans administered or loans with a delay of up to 90 days at the time of application, second) 60% of the monthly fee for loans with a delay of more than 90 days at the time of application, C) Speed 40% on the monthly fee, to present loans delay of more than 90 days and also have been reported on time no more than one year before the application is submitted “, it is usually stated.
Regarding the criteria, the debtor must cumulatively meet the following:
a) You have a real, exclusive or ideally shared right of ownership, total or partial or usufruct of a property, which is your main residence and is located in Greece.
second) To guarantee the debt in real time, a mortgage or pre-mortgage note has been registered before submitting the application on a property used as the principal residence of the debtor.
C) The total of your debts with financial entities, Public Institutions and Social Security is at least 20,000 euros.
re) The balance of the debt of the loan guaranteed by the debtor’s main home does not exceed the amount of 135,000 euros for a one-person household, which is increased by 20,000 euros for each additional member, up to a maximum of 215,000 euros per creditor. .
me) The loan has not been terminated for more than a year since the application was submitted.
F) There has been a decrease in family income.
For business, beyond the previous possibility, they too can, to resort to the reorganization process, for which:
The consent of two categories of creditors is required, those with security and the remaining creditors, at a rate of 50% of each category.
Agreement can only be reached if 60% of creditors in all categories agree to a debt settlement proposal. The agreement must be ratified by the Court. Submitting the application to the Court Seizure suspension and auctions by secured creditors.
Creditors who minorities are bound by the agreement as long as the basic principle is met no deterioration of the situation and equal treatment of creditors.
Employee rights are not affected by the resolution agreement kand their demands are not met with the suspension of the prosecution measures.
Bankruptcy
It is aimed at both homes, as well as in business, who have no way to pay their debts or the settlement has failed debt settlement process.
It is presumed that o the debtor is in default when it does not pay past due financial obligations to the State, Social Security Institutions or credit / financial institutions in the amount of at least 40% of the total of its past due liabilities to the respective institution for a period of at least six months, provided that its bad debt exceeds the amount of 30,000 euros.
The right to declare bankruptcy, when the debtor is in “suspension of payments”, has – in addition to the same – the creditor, as well as the Prosecutor’s Office. The exemption comes in one year for debtors. be liquidated your main residence or other assets in excess of 10% of your liabilities for a value of at least 100,000 euros or in three years for other categories of debtors.
Company bankruptcy procedures state that the decision to declare bankruptcy decides the liquidation of the entire company or of your individual assets. If the sale is not fully achieved within 18 months, then the individual assets are sold. The exemption period occurs within three years of filing for bankruptcy or two years after bankruptcy, whatever happens before.
The bankruptcy estate includes:
one) All the property belonging to the debtor at the time of the bankruptcy, wherever it is located.
two) In the case of a natural debtor, the part of his annual income that exceeds reasonable living expenses.
According to the Minister of Finance, the Law provides for horizontal insurance on bank accounts, regardless of whether it is individual or public, 1,250 euros / month, while reasonable living expenses, as determined by ELSTAT, amount to 537 euros for a household with one adult / month, with two adults at EUR 906 / month, with two adults and a child at EUR 1,126 / month, with two adults and two children at EUR 1,347 / month, and finally with two adults, two children and a Additional dependent adult at 1,555 euros / month. Thus, in most of the average households in the country, reasonable living expenses are equal to or greater than the unsecured amount of 1,250 euros.
3) The debtor’s annual income is excluded from the bankruptcy estate regardless of the amount when, at his request, the bankruptcy court determines that the bankruptcy estatethe property includes the principal domicile of the debtor and / orand other fixed assets that exceed 10% of its total liabilities and its minimum value is not less than 100,000 euros, excluding those acquired during the 12 months prior to the declaration of insolvency.
If the debtor’s annual income exceeds five times reasonable living expenses, the excess
amount belongs to the bankruptcy estate.
5) The bankruptcy estate does not include property acquired by the debtor after filing for bankruptcy.
The Real Estate Acquisition and Rental Agency
In the event that the debtors belong to a vulnerable social group based on the criteria defined in Law 4472/2017, regardless of whether or not they have a business activity, they can go to the private Real Estate Acquisition and Rental Agency, to avoid eviction. The JMC that will determine the terms and conditions of the institution in question will be issued within November, while immediately afterwards the open international bidding will be executed for the selection of the investor, who will lease to the borrowers their properties auctioned for a period 12 years. The rent arises with yield base corresponding to the average mortgage interest rate with a floating interest rate in force, according to the statistical bulletin of the Bank of Greece, during the last month, for which there is a measurement, adjusted with a reference rate to that of the Main Refinancing Operations of the European Central Bank. The lease is reviewed annually on the anniversary of the lease. This can be terminated if the tenant is behind in paying three rents and the arrears are not fully remedied within a month due to the corresponding inconvenience of the tenant. The lease contract will also be terminated in the event that the competent bankruptcy court determines that the debtor is not released from his debts.
Within 12 years they have the opportunity to buy back the property, after reimbursing the rents for the entire period and the value of the property at the time of exercising the right to buy back. The margin to which borrowers must apply The institution is designated within 60 days from the date of the attached document. or the publication of the resolution that declares them bankrupt in the Electronic Solvency Registry.
Mechanism … insolvency risk alert
Introduced in the new Law for the first time an electronic mechanism for early warning of debtors three levels of insolvency risk (low – medium – high) for natural and legal persons, which will be supervised by the Special Secretariat for Private Debt Management.
Membership application provides permission of the interested party to the supervisory authority search, access, collect, process and cross-reference data concerning you, determine the level of insolvency risk, classify it, and capture opinions and suggestions to address risk.
As for the bodies that can support debtors, The legislative improvement will stipulate that these include the institutes of social institutions.
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