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Victoria Mindova

Households and individuals, who cannot meet their financial obligations to banks, will be able to take a breath with the entry of two new bills for vote in parliament. The new bill to settle the obligations of individuals will be introduced by the end of the week and will apply to citizens who are unable to meet payments on residential and consumer loans. Using it will allow individuals and households to declare bankruptcy - a rule that until now existed only for entities. This was announced by Minister of Economy, Development and Shipping Louka Katseli.

Compared with 2008 the number of households has increased with 70%, who have repeatedly overrun payments of monthly installments to repay the amounts due to banks and other financial institutions. In case of recognition of bankruptcy, the household will have to cover 10% of consumer loans for a period of 4 years. The remaining debt will be simplified and in case of a primary/only residence mortgage, the household will be able to pay 85% of the trade property value with considerably lower interest over a period of 20 years.

Bankrupt households will be announced after citizens file an application in court, which must be accompanied by a detailed description of the debtor and his family (spouse). It will also include the loan amount and expenses thereon (principal, interest and monthly installments) and plan to settle the amount due, which takes into account the interests of creditors and the ability of the household to pay the obligations. After a conducted inspection, the court will issue a decision approving the application and subsequently will issue a certificate by the Commission for Consumer Protection.