More than 5,000 applications submitted to its platform out-of-court debt settlement mechanism in January, registering a new historical record while the new monthly settings remain consistently high, exceeding 1,000.
According to his announcement Ministry of National Economy and Finance the figures reflect the dynamics of the specific tool that in recent months has been used significantly by debtors following the recent improvements that were instituted. In particular, according to the data of the General Secretariat of the Financial Sector and Private Debt Management:
• In the month of January 2024, 5,031 new applications were launched on the platform and 1,075 new successful debt arrangements, which correspond to a particularly high total of initial debts of 425 million euros.
• In total, by the end of January 2024, 13,101 successful debt arrangements have been carried out, which correspond to 4.8 billion euros of initial debts.
• The rate of approval of the arrangements by the financial institutions is also maintained at a consistently high level.
What are the changes in the out-of-court debt settlement mechanism?
It is worth noting that a few days ago the Ministers of National Economy and Finance Kostis Hatzidakis and Development Kostas Skrekas signed the Joint Ministerial Decision which significantly improves the algorithm of the extrajudicial mechanism. In particular, with the changes that are taking place, the amount of debt limitation (“haircut”) in collateralized loans is improved by up to 28% compared to the existing situation.
With the same decision, the interest rate for all debt arrangements to the State, Banks and debt management companies is set at 3% fixed for 3 years.
It is noted that the interest rate for debts to financial institutions was until now euribor plus 2.5 points for secured debts and plus 3 points for unsecured debts. For debt settlements to the State and Social Security Agencies it was already fixed at 3% fixed.
In the coming days the changes to the platform
The introduction of the relevant amendments to the platform of the extrajudicial mechanism is already underway and will be completed within the next few days. The exact date will be announced by the Ministry of National Economy and Finance.
Besides, by a Joint Ministerial Decision of the Ministers of National Economy and Finance Kostis Hatzidakis and Labor and Social Security Domnas Michailidou, the possibility of joining the extrajudicial mechanism is given to persons who “inherited” debts to the State and Social Security Agencies, from companies that have closed.
In relation to the extrajudicial, it is recalled that Law 5072/2023 “Loans: Transparency, competition, protection of the vulnerable” also provides that:
– The proposal to restructure the debt of vulnerable debtors, as it results from the application of the out-of-court algorithm, will be automatically and mandatorily accepted by all creditors (banks and the State).
– The debtor reserves the right to reject this proposal.
– Creditors can challenge it in court only if they have evidence that parameters of the application are not true.
According to the provisions of the same law (5072/2023), the activation of the special digital platform to inform borrowers by the servicers follows until March 31, 2024. In particular, the servicers are obliged to provide, through a digital platform, personalized and detailed information to the debtors, regarding the amount of the debt, the history of payments, installments, the interest rate of the arrangement, etc.
The debtor will be able to see these details by logging in using his password in a special application on the servicers’ websites (by analogy with the web banking of banks). up to and including revocation of the operating license.
How can debtors stop the auction
In order to suspension of the auction debtors have the possibility to follow the judicial or extrajudicial way. Any debtor who goes to court can file an objection once morest the payment order and subsequently an objection once morest the attachment report.
It is also important to correct the price of the first offer through the procedure of injunctive measures. Debtors can also request suspension of the auction by paying ¼ of the debt. At the same time, the out-of-court procedure can be “run” either through bilateral negotiations or through the process of the out-of-court debt settlement mechanism.
Source: enikonomia.gr
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