{"id":359,"date":"2014-12-23T11:07:07","date_gmt":"2014-12-23T11:07:07","guid":{"rendered":"http:\/\/zerveaslaw.gr\/?page_id=359"},"modified":"2021-05-04T09:44:37","modified_gmt":"2021-05-04T09:44:37","slug":"faq-3869210","status":"publish","type":"page","link":"https:\/\/zerveaslaw.gr\/en\/services\/indebted_households\/faq-3869210\/","title":{"rendered":"QUESTIONS \u2013 ANSWERS"},"content":{"rendered":"

QUESTIONS \u2013 ANSWERS ABOUT LAW 3869\/2010 (KATSELIS PREFACE)<\/strong><\/p>\n

    \n
  1. What is the name of the law and when did it come into effect?
    \n<\/strong>This is Law 3869\/2010, as amended by Law 4161\/2013, and has become widely known as the Katselis Law. It was passed in October 2010 and has helped thousands of households so far.<\/li>\n
  2. What is the purpose of the law?
    \n<\/strong>Its purpose is to help borrowers hit by the crisis, reduced income, unemployment, obligations to the state and health problems, who are unable to meet their loan repayments and debts in general.<\/li>\n
  3. Which persons are covered?<\/strong>;
    \n<\/strong>All natural persons except merchants are included. Specifically, public and private employees, freelancers, retirees, artists, housewives, income earners, the unemployed and those deprived of any income.<\/li>\n
  4. Who is excluded?<\/strong>;
    \n<\/strong>Merchants and entrepreneurs are excluded (not all). For example, wholesalers, shopkeepers (not all), importers, owners of health shops, general partners of a company with a commercial purpose are not included in the law. The same does not apply to partners of a limited liability company, shareholders of a limited liability company, administrative bodies of capital companies, members of the board of directors of a municipal cooperative, etc.<\/li>\n
  5. Are small traders subject to the law? \/ Who are considered small traders?
    \n<\/strong>Small traders are subject to the law. Small traders are considered to be those who carry out commercial transactions at a low intensity and without particular risk. For example, a small trader is considered to be a craftsman, a craftswoman, a small vendor, a shoemaker, a dressmaker, a tailor, a haberdashery, a baker, a canteen owner, a furniture maker, a carpenter, a vendor at street markets, a hairdresser, a manufacturer of small jewelry and small objects, a lottery seller, a private teacher, etc.
    \nUnder certain conditions, a small business owner may be considered a micro-entrepreneur, a building contractor, a taxi driver, a truck driver, the owner of a gym, body shop, paint shop, dry cleaner, etc.<\/li>\n
  6. Are business and commercial loans also covered by the law?
    \n<\/strong>Yes, as long as the borrower-debtor meets the conditions for being subject to the law mentioned above. That is, merchants are exempt from the law, but not commercial debts.<\/li>\n
  7. Is the former trader subject to the law?
    \n<\/strong>The former trader can only be subject to the law if he has stopped paying his loans after ceasing his commercial activity. That is, he must first have eliminated the commercial capacity and then become insolvent. The cessation of commercial activity occurs with the cessation of the tax office, the actual cessation of activity for a long period of time, even if there has not been a formal cessation, the transfer of the business or the departure from the company.<\/li>\n
  8. Which debts are subject to the law? \/ Are only debts to banks subject to the law?
    \n<\/strong>The law covers debts to credit institutions - banks, to individuals, to insurance funds, to local authorities and to the Tax Administration.<\/li>\n
  9. Which debts are not included?<\/strong>;
    \n<\/strong>Debts arising from a tort or fraud, debts incurred in the last year since the application was filed, debts relating to administrative fines or financial penalties, as well as those relating to the obligation to support a spouse or minor child, are not included.<\/li>\n
  10. Is there a limit on the amount of total debts?
    \n<\/strong>No. The law does not set a limit on the amount of debts.<\/li>\n
  11. Is there a limit to the number of creditors - banks that someone owes?
    \n<\/strong>No. The law does not set such a limit.<\/li>\n
  12. Which is the competent court to hear the cases?
    \n<\/strong>The competent court is the Court of Peace of the place of residence of the borrower-debtor.<\/li>\n
  13. What is the content of the application\/petition?
    \n<\/strong>The application, in order to be clear and definite, must contain all the information concerning the personal, family, property and income situation of the borrower - debtor. It must also state the reasons that led to his inability to pay, the detailed course of his income situation in recent years, his income situation when he took out the loans, his living expenses and finally the plan he proposes for the settlement of his debts.<\/li>\n
  14. What are the necessary documents that the borrower-debtor must present to the court?
    \n<\/strong>The necessary documents that must be submitted, so that the judge has full knowledge of the situation of the borrower - debtor and so that the application is admissible, are the following: 1. Certificate of family status of the applicant (from the Municipality or the KEP), 2. Living expenses (rent, PPC, EYDAP, OTE, utilities, mobile phone, etc.), 3. The applicant's income (salary, pension, rent or from another source), 4. Recent statements of legal debts from the Banks, 5. Unemployment card & OAED certificate regarding subsidy or not in the event of unemployment, 6. His\/her spouse's income, 7. In the case of real estate, the contract and the certificate of encumbrances from the Mortgage Registry, 8. In the case of a vehicle, the registration certificate, insurance costs and traffic taxes, 9. In case of a health problem, the medical documents certifying it, as well as expenses incurred by the patient (e.g. regular or emergency examinations, surgeries, medications, etc.), 10. In case of student children, the education expenses (e.g. tutoring), 11. In case of student children, the certificate of studies and living expenses if they study in the province or abroad, 12. Payroll statements for the last few years (where appropriate, mandatory for the last three years), 13. E9, 14. Police ID card, 15. EN.FIA, 16. Debts to the Tax Office or Insurance Agency (if any), 17. General criminal record, 18. E1 for the last three years, 19. Copies of loan agreements for all debts, 20. Complaints of loan agreements (out-of-court settlements, payment orders, etc.), 21. Estimate of the commercial value of the main residence. All of the above documents are now mandatory for the applicant's spouse, as well as for any minor children with property.<\/li>\n
  15. What procedure is followed?
    \n<\/strong>After the application has been carefully drafted, it is submitted to the competent Court of Peace and two hearings are held, the temporary order and the final hearing. It is advisable to submit the above documents at the same time, so that the file is complete. The application is then notified by a bailiff to the opposing parties within 15 days.<\/li>\n
  16. How are banks - creditors informed about the borrower - debtor's inclusion in the law?
    \n<\/strong>With the notification made to them by the bailiff.<\/li>\n
  17. Can banks harass the borrower-debtor by phone when he\/she is included in the law?
    \n<\/strong>Banks cannot harass by telephone from the moment the borrower-debtor files his application with the Court of Justice and must follow the legal process.<\/li>\n
  18. What are the most common reasons that lead to inability to pay loans?
    \n<\/strong>The most common reasons that lead a borrower-debtor to be unable to repay the installments or to have such difficulty that he reaches the point of being deprived of the essentials to be consistent in his payments are unemployment, a decrease in income, work or pensionable earnings, a decrease in rent or the tenant's withdrawal from the lease, if the borrower rents out a property of his, the unemployment of his children, the lack of income of his elderly parents whom he is forced to support, the appearance or worsening of health problems and all this in combination with the broader economic crisis, the increase in the cost of living, the fees, taxes and contributions that the borrower-debtor is obliged to pay to the state.<\/li>\n
  19. From what point in time is the borrower-debtor protected?
    \n<\/strong>From the moment the application is filed with the Court of Peace, all assets of the borrower-debtor are protected until the day of the temporary order when the Justice of the Peace will decide on the continuation of the protection of the assets with the condition of paying or not a certain amount of money monthly to the banks. This amount is usually only 10% of the loan installment, but in cases of unemployment, serious health problems and inability to cover the basic living needs of the borrower-debtor and his family, it may be even less or zero.<\/li>\n
  20. Do loans stop paying interest when someone falls under the law?
    \n<\/strong>Something very basic that the borrower-debtor should know is that from the time the application is submitted, interest on consumer loans and credit cards ceases to accrue. This is one of the most important positive elements of the law, as the interest rates on most consumer loans and credit cards are particularly high.<\/li>\n
  21. What benefits does the borrower-debtor receive from the temporary injunction?
    \n<\/strong>The benefits of granting a temporary injunction are multiple and very significant. Specifically, the borrower-debtor pays a much smaller amount than the installment, no one can tamper with his property, he improves his standard of living and gains time at a time when the economic crisis has brought every household to its knees. However, he must not forget to pay this amount every month and be aware that he is prohibited by law from selling any of his assets.<\/li>\n
  22. What is decided by the court's final decision?
    \n<\/strong>It is decided to settle the borrower's debts by paying the monthly installments that the court will determine and to protect his main residence if he so wishes.<\/li>\n
  23. When can the primary residence be protected?
    \n<\/strong>When the following conditions are cumulatively met: a) the monthly disposable family income does not exceed reasonable living expenses increased by 70%, b) the objective value of the main residence at the time of the application discussion does not exceed 180,000 euros for the single debtor, increased by 40,000 euros for the married debtor and by 20,000 euros per child and up to 3 children and c) the debtor is a cooperative borrower, based on the Code of Conduct for Banks. Simply put, there are very few residences that cannot be protected, since the above limit is high.<\/li>\n
  24. When are the remaining assets of the borrower-debtor liquidated?
    \n<\/strong>The Justice of the Peace decides whether the remaining assets of the borrower-debtor will be sold, examining on the one hand whether there are any debts remaining after the court settlement and on the other hand whether they are of interest to purchase. Usually, assets such as agricultural land, old and dilapidated buildings or properties in partial and undivided ownership do not present any interest to purchase.<\/li>\n
  25. What procedure is followed to implement the liquidation?
    \n<\/strong>The court appoints a liquidator, who undertakes to find a buyer for the property at its fair value. This can take a long time and it is possible that no prospective buyer will be found at a time when buying interest is almost non-existent. The money from the sale will go towards the borrower's debts and if these are repaid and a balance arises, this will be returned to him, minus expenses.<\/li>\n
  26. Does being subject to the law bring financial relief to the borrower-debtor?
    \n<\/strong>Most of those who have been subject to the law feel a great sense of relief, whereas until then they were completely trapped, as they tried to service their loan installments from their reduced incomes and their meager savings, burdening their mental health and feeling intense stress and anxiety on a daily basis.<\/li>\n
  27. Debts are being "cut"<\/strong>;
    \n<\/strong>The haircut is a function of the amount of the total debt and the liquid assets of the borrower-debtor. Simply put, the greater the total debt and the fewer or non-existent liquid assets, the greater the haircut. This of course assumes that the application will be accepted by the court. In some cases, especially for the unemployed, the elderly and the seriously ill, the haircut even reaches 90-95%, however, borrowers-debtors should be aware that, because each case is unique, it is good for their case to consult their lawyer.<\/li>\n
  28. What is the borrower-debtor prohibited from doing during the pendency of the lawsuit?
    \n<\/strong>During this period, i.e. from the filing of the application until its discussion in the final court, the borrower-debtor cannot sell his assets and must comply with the decision of the temporary order by paying the amount of money that the court has set each month. Also, if his income situation improves, he must declare it in the file kept at the competent Court of Peace (the same applies if he receives money from any compensation, insurance, lump sum, etc.) and it would be a good idea to update his file in the event that his place of residence or his property changes with the acceptance of an inheritance.<\/li>\n
  29. When is the borrower-debtor relieved of the balance of his debts?
    \n<\/strong>After the three to five-year period determined by the court, the borrower-debtor is released from the remaining debts, if he has consistently complied with the court-determined arrangement towards all creditors-banks. Payments for the rescue of the main residence constitute a separate arrangement.<\/li>\n
  30. Is the borrower-debtor protected until his case is heard?
    \n<\/strong>The borrower-debtor is completely protected until his case is heard. And this must be emphasized, because in almost all Justices of the Peace, and especially in Attica, the trial is scheduled after many years. During this time, the property, income and personal freedom of the borrower-debtor are not at risk.<\/li>\n
  31. Does the law also apply to loan guarantors?
    \n<\/strong>Yes. Loan guarantors can also be subject to the law, whether they have signed only as guarantors or as primary borrowers on their own loan.<\/li>\n
  32. If the <\/strong>debtor<\/em> makes use of <\/strong>law<\/em> and regulate or get rid of the <\/strong>debt<\/em>, exempted<\/em> at the same time the guarantor?
    \n<\/strong>No. The guarantor himself must be included in the law with his own application, in order to be protected, even if and as long as he meets the requirements for inclusion.<\/li>\n
  33. If the <\/strong>debtor<\/em> makes use of <\/strong>law<\/em> and regulate or get rid of the <\/strong>debt<\/em>, exempted<\/em> at the same time as the co-debtor?
    \n<\/strong>No. The co-debtor himself must join the law with his own application, in order to be protected, even if and as long as he meets the conditions for joining.<\/li>\n
  34. Must there have been an out-of-court settlement with creditors?
    \n<\/strong>With the passage of Law 4161\/2013, it is not necessary to have previously attempted an out-of-court settlement. The borrower-debtor can directly pursue legal action.<\/li>\n
  35. Can the borrower-debtor choose which of his debts will be subject to the law?
    \n<\/strong>Various opinions have been expressed on this issue from time to time. However, it would be most appropriate to include all debts and not exclude any or all of them.<\/li>\n
  36. Are the loans of the Deposits & Loans Fund, the Bank of Greece and OEK-OAED included in the law?
    \n<\/strong>Yes.<\/li>\n
  37. When monthly loan installments are automatically withheld, does the withholding stop upon becoming subject to the law?
    \n<\/strong>When a credit institution automatically withholds the loan installment, the borrower-debtor has the right to withdraw the order he has given to withhold the installment. If this does not happen, the Justice of the Peace, with his temporary order, orders the lifting of the withholding and decides what amount the borrower-debtor must pay each month, an amount which in any case is much less than the installment withheld.<\/li>\n
  38. What should the borrower-debtor do if he is served with a payment order?
    \n<\/strong>If a payment order is served for the first time on the borrower-debtor, he must immediately inform his lawyer, as he has only 15 working days from the service of the payment order to file an objection against it. If he intends or is preparing to be subject to the Katselis law, it would be advisable not to neglect it and to immediately file his application with the competent Court of Peace, so as not to risk punitive measures against his property.<\/li>\n
  39. What happens if the borrower-debtor is unemployed or in a very bad financial situation?
    \n<\/strong>In these cases, the court shows particular sensitivity and may even order zero payments to the borrower-debtor. It also shows the same sensitivity when there are health problems or the borrower-debtor is elderly.<\/li>\n
  40. What should the borrower-debtor do if his income situation changes before the case is heard or after the hearing?
    \n<\/strong>In the first case, he must update the file kept at the Justice of the Peace. If he remains unemployed or his income decreases and he is unable to pay the installment assigned to him by the Justice of the Peace's temporary order, he may request the revocation or reform of the temporary order.
    \nIf his income situation improves in the next three to five years from the issuance of the decision, he must make this known by means of a statement filed in the file kept at the court. If, on the other hand, his income decreases and he is unable to pay the installment assigned to him by the court, he may request the revocation or reform of the decision.<\/li>\n
  41. What are the obligations of the borrower - debtor and what should he pay attention to?
    \n<\/strong>The borrower-debtor must do whatever is necessary to facilitate the process and for the Justice of the Peace to have a complete picture of his situation. He must provide any document requested and be completely honest in what he states, otherwise he risks having his application rejected. He must also not forget to include a creditor-bank in his application, because he may face problems later. In the audience, he must be clear in his answers, if he is examined himself, if a third party is examined as a witness, it would be good to know well the income and property situation of the borrower-debtor, the reasons that he took on the loans and that ultimately led him to the inability to pay, in order to contribute to the evidentiary process and the successful outcome of the trial.<\/li>\n
  42. What can the borrower-debtor do if he is not happy with the court's decision?
    \n<\/strong>If the borrower-debtor's application is accepted by the court, but he considers that the monthly installments set are high and he cannot meet them, he can file an appeal, even an annulment. In some cases where the decision contains errors, he can request its correction.<\/li>\n
  43. What consequences does it have for<\/strong> borrower - debtor failure to comply with the court decision?
    \n<\/strong>If the borrower-debtor does not comply with the court's decision for more than 3 months, that is, if he does not pay the monthly installments that it sets to his creditors, then they have the right, within the time limits set by law, to submit a request for exemption from the law, which is introduced in the court that issued the decision and has the consequence of restoring the creditors' claims to the amount they would have been if the application had not been submitted.<\/li>\n
  44. What happens if the borrower-debtor dies?
    \n<\/strong>If the borrower-debtor dies before the court's decision, the process ceases and the heirs must continue it in their name, provided of course that they also meet the conditions.
    \nHowever, if the borrower-debtor dies after the court decision is issued, then the heirs, under specific conditions, repay the installments that have been set and are relieved of their debts when this process is completed.<\/li>\n
  45. What happens if the application for inclusion in the law is rejected?
    \n<\/strong>Many applications are rejected either for formal reasons or on their merits. Over the years, amendments to the law and the issuance of court decisions, more and more applications are rejected. The rejection of the application results in the borrower not enjoying the protection of the law and his debts to the credit institutions being revived with interest. However, the rejection of the application at first instance does not imply a definitive loss of the case, as there is a right of appeal, which will give the borrower the opportunity to have his case examined on appeal by the Single-Member Court of First Instance, which will reassess the facts and the allegations presented at first instance. Appealing to a higher court actually means re-examining the case and must be done within two years of the issuance of the decision of the Court of Justice or within thirty days in the event that the decision was served by one of the parties. It is not uncommon for applications to be rejected by decisions that exhaust their severity or that have not properly assessed the evidentiary material, testimonies and documents submitted. The appeal therefore analyzes in detail the reasons why the court misinterpreted the law and therefore the judgment and will be examined during the hearing of the appeal in the audience of the Single-Member Court of First Instance during the hearing to be scheduled. If in the interim until the hearing of the appeal there is a risk to the borrower's assets, in parallel with the appeal, interim measures may be requested to protect his assets from sale, commonly preventing the enforcement procedure by the banks.<\/li>\n
  46. What happens if the application for inclusion in the law is accepted but sets high doses?
    \n<\/strong>It is also possible that the Court of Justice, with its decision, accepts the borrower's application, however, setting high monthly installments that the borrower is unable to meet. In reality, this is a submission to the protection of the law that is accepted but becomes impossible to fulfill because the borrower's finances do not allow, at the same time as covering the living needs of himself and his family, to cover the installments set by the decision. The inability to comply with what is set in the decision inevitably makes it unenforceable and leads to the borrower being excluded from the law. Here too, however, an appeal can be filed with a request to reduce the installment to a reasonable amount corresponding to the borrower's financial capacity. In this case, the second instance court will reassess the living needs of the borrower and his family, as well as his obligations of all kinds and the amounts required to cover them in relation to income, in order to reduce the monthly installment. The appeal against a non-rejecting decision is therefore filed before the Single-Member Court of First Instance with the same procedure as the appeal against a rejecting decision, and its success will result in the relief of the borrower and the eventual repayment of a smaller total amount to the credit institutions.<\/li>\n
  47. What happens if the borrower's income decreases or his obligations increase after the decision is issued?
    \n<\/strong>In the event that there is a change in the facts after the decision is issued, the law allows the decision to be reformed in the interest of the borrower. A change in the facts or, more simply, the borrower's living conditions is a decrease in income, an increase in living expenses, an increase in taxes and fees, the appearance or worsening of health problems, divorce, marriage and the birth of a child, new obligations that suddenly appeared, etc. Therefore, if there are changes in everyday life, the borrower submits an application for reform of the decision before the same Court of Justice that issued the decision to subject him to the law with the main request to reduce the monthly installment to the credit institutions but also with other requests as the case may be. The decision is issued by the same court and its approval results in relief for the borrower and further reduction of his debts.<\/li>\n
  48. What happens when the borrower repays the installments set by the decision?
    \n<\/strong>When the borrower repays the three- to five-year installments assigned to him by the court decision, in order to be permanently relieved of his debts to the credit institutions, that is, from the amount remaining after deducting the amount of the installments from the amount owed according to the loan or credit card, he submits an application to the Court of Justice called an application for exemption and his exemption from the remaining amount of the debt is certified. This specific application is simple, the documents are limited and it does not impose a particular financial burden on the borrower.<\/li>\n<\/ol>\n

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