The loan arrangements came off through the out-of-court mechanism

By Leonidas Stergiou

The number of applications for out-of-court debt settlement through the platform of the new bankruptcy law is increasing, after many months in the system as non-finalized.

This development was expected by the people of the market and the executives of the Ministry of Finance, as the main source of delay was the non-finalization of the application, as several debtors were waiting to collect other debts to be settled. Another reason was the collection of data that was not available electronically, while several were left at the submission stage, as those interested did not press the button to remove tax and banking secrecy.

According to the latest available data, about 39,000 applications for out-of-court settlement have been submitted to the platform, most of which have reached the stage of declassification and are in the process of collecting and cross-referencing data with banks and funds.

To date, 600 applications received from creditors have been sent through the online platform. Of these, there have been responses for about 60. Of these, 40 were settled by adjustment, including mowing, while for about 20 the process was fruitless. The rejections are mainly due to the amount and the already debts that do not fall under the new bankruptcy or incomplete data. For example, the out-of-court settlement concerns debts of more than 10,000 euros in total to banks and funds, while the debt can not be settled only to one or a group of creditors.

In the next few days, creditors are expected to make proposals for about 180 applications, which debtors will have to negotiate, reject or accept. Based on the rate of applications found on the platform and in the creditors’ systems, it is estimated that the total number that will be examined by the end of the year will reach 600 cases. Of these, based on the data to date, 500 applications will be settled, while for about 100 the process will be considered fruitless.

It is noted that when the process ends in failure because there is no way to settle the debt in a sustainable way, then there is the possibility for vulnerable debtors to proceed to the second stage, ie bankruptcy and the second opportunity. To date, none of the fruitless proceedings concerned a vulnerable debtor who was unable to settle his debt and would go bankrupt.