What debtors need to know

In the most significant improvementss that took place in debt settlement platform has opened
– 2024-02-25 08:40:48″>extrajudicial mechanismso as to make it the most attractive solution for debts to banks and the State, says Patras lawyer Evi Bilisi, specialist in debt settlement cases.

Mrs. Bilisi spoke to “P” about the decision number 1/2023 of the Plenary Session of the Supreme Court, which gave the “green light” to the funds to conduct auctions under their own name in real estate, after the purchase of the red loans from the banks.

After this decision of the Supreme Court, the debtors, especially to the banks, are faced with a flurry of auctions, as the funds reach the limits of insolvency.

It is indicative that, at the moment, 10,529 auctions have been posted on the online platform and are ready to take place by the end of the year, as the restriction due to the recent elections has now been withdrawn.

And the auction programs in Western Greece reach 600 and increase as time goes by.

Evi Bilisi emphasized that many debtors do not know the possibilities of the new out-of-court procedure

The individual arrangements that were made until recently with banks, the public and OTAs, most of the time ended in a dead end and became ineffective because the debtor could not serve them or because they were not profitable.

In practice, few applications resulted in a sustainable arrangement, said Mrs. Bilisi, with the result that the only path a debtor has to follow is the out-of-court mechanism.

Especially the improved out-of-court mechanism after the review of last February, comes to stop this invasion of auctions with the regulation of private debt, says the native lawyer. Already with the new Law 5024/2023 there are some essential changes in the procedure of the extrajudicial mechanism, such as:

By finalizing the application, all enforcement procedures, such as payment orders, seizure of bank accounts, auctions, are suspended.

The justification on the part of the financial institutions of their non-consent to the debt settlement proposal and in the event that the reason for the rejection is not “convincing”, the debtor will be able to invoke the abusive behavior of his creditor in any future legal battle.

In the public and OTAs, debts are regulated in 240 installments and in credit institutions they can reach 450.

The reduction of the interest rate for arrangements with public bodies, from a floating Euribor three-month rate +5%, to a fixed rate +3%.

The debtor can now apply even if he owes to only one bank, as long as the amount of the debt does not exceed 10,000 euros.

Therefore, the out-of-court mechanism is a lifeline for natural persons and businesses

THE SYSTEM HAS BEEN IMPROVED

Of course, the revised out-of-court settlement is not perfect either. With the former, the debtor made an application and without the need to complete the process, all enforcement measures against him were suspended. Now, it doesn’t happen that way. The filing of the application must be finalized to prevent a foreclosure.

As Mrs. Bilisi explains, the finalization of the application does not take as long as before. It is done in a period of one month and in parallel with its submission, the banks are obliged to respond immediately and document rejection cases with justification.

These arrangements have significantly improved the out-of-court settlement, which is why it has found a great response from many debtors who now turn to it to protect themselves against funds and creditors and to put their debts in a group settlement program.

Lawyer Mrs. Bilisi emphasized that many debtors do not know the possibilities of the new extrajudicial, so they must be informed as much as possible in order to have an umbrella of protection. After all, there is no other means of defense.

Also, there is a climate of disappointment from the first generation of the extrajudicial, where really most of the applications did not succeed due to the aforementioned problems and that is why citizens think that the same may be true with the revised law, but it is not so.

HOW FUNDS WEAKER DEBTORS

Until the decision of the Plenary of the Supreme Court came out, which opened the way wide for the funds for the auctions, the fixed practice of the creditors was to issue a payment order. Against this measure, the debtor could file an appeal and until this appeal was heard, he still gained 2-3 years of waiting, without moving against him, some foreclosure process and auction.

But after the issuance of the decision of the Supreme Court, the tactics of the funds have changed radically and have become very aggressive. Creditors now serve an immediate payment order, which the debtor can again defend with a stay, but this time he is not fully covered, even if he makes an additional stay.

The fund’s tactic is to simultaneously launch a seizure program of the debtor’s real estate, which practically starts the auction process, with the result that the debtor does not have the time or the money to defend himself.

In fact, many debtors are taken by surprise, receiving the notice of seizure and mistakenly believe that their lawyer has been inactive, while this is not the case, as a result of which mistrust is created between them.

If the foreclosure report is issued, the debtor must immediately initiate a new foreclosure process and within a short period of time to prevent the auction, which many debtors do not know or do not have the money to do, resulting in funds with this way to weaken them economically to prevent them from taking defensive measures.

For these reasons, debtors must now look very seriously at resorting to the only means of protection, which is the out-of-court debt settlement mechanism.