L. 4738/2020 – DEBT SETTLEMENT AND PROVISION OF A SECOND CHANCE

The new law 4738/2020 was passed to fill the gap created in the area of over-indebtedness by the repeal of law 3869/2010 (Katselis law). Its aim is to solve the problem of bad loans that continues to plague many of our fellow citizens and legal entities.

Many individuals from 2010 onwards joined the Katselis law and settled their debts. Others, however, did not join, because they managed to continue repaying their loan installments and other obligations by making arrangements with the banks or by limiting their living needs. While others did not meet the formal requirements of the Katselis law, such as merchants of all kinds, small or large entrepreneurs and some freelancers. Furthermore, a large percentage of borrowers joined the Katselis law, but ultimately and usually after several years the court rejected their application, as a result of which they found themselves owing the same amounts and even with interest. So yes, they managed to ease their financial burden for a few years by waiting for their court and usually paying a not particularly high installment within the framework of the temporary order granted to them by the Justice of the Peace, but ultimately they found themselves facing the same problem, with their debts having ballooned and the banks persistently requesting that their loans be serviced. There are also some borrowers - debtors who, while they were properly included in the Katselis law, lost the regulation in the process, as they were unable to pay the installment which often became higher after 3 to 5 years.

All of the above, as well as those who from now on will face problems repaying their debts, will have recourse to the new law 4738/2020 and the debt settlement process it provides, in other words, the second chance, as it is called, as long as they have stopped making payments and are considered vulnerable by law, a criterion that is related to annual income, spouse and number of children. This article lists your favorite at extremely low prices. Choose from same-day delivery, delivery by car or order pickup.

The procedure, depending on the case, can be extrajudicial or judicial. However, for those who apply for bankruptcy and the objective value of their real estate is up to 350,000 euros, the application is made electronically, while for those who exceed the above amount, it is made before the Multi-Member Court of First Instance. The electronic procedure is done through a special online platform and is immediate, which means that it will not take years and courts for the debtor to settle his loans and any remaining debts to the State, insurance companies, etc. It is also important that the procedure, in addition to being short, is less expensive for the interested party. Furthermore, it also includes those who were not included in Law 3869/2010 (Katselis Law) because they were merchants or entrepreneurs, as well as those whose application under the Katselis Law was rejected.

As regards the main residence, the Acquisition and Leaseback Agency is given the opportunity to purchase the debtor's residence and lease it to him for a period of twelve years and then re-transfer it to him against a repurchase price. This can be done even before the end of the twelve-year period, provided that the debtor pays the above Agency the current value of the rents until the end of the lease period.

Furthermore, it is important to note that the procedure of Law 4738/2020 suspends the pursuit measures and execution against the debtor and his property by the creditors.

Debtors are therefore given a "second chance" to organize their obligations and the way is opened, through a simpler process, to settle debts and find a solution with the final result of debt relief in a short time. The law also includes loan guarantors.
Our office, with the experience it has gained over the past years, having handled hundreds of loan and debt settlement cases, can assist you in your compliance with Law 4738/2020 with confidentiality, immediacy and professionalism.