Also, the regulation may include debts to the State and Social Security bodies, which have been established against companies that are in dissolution or liquidation or have ceased to exist<\/strong> at the request of a third person (e.g. a company’s manager or board member) who is jointly and severally liable with the company.<\/p>\n\n Especially for vulnerable<\/a><\/strong> debtors and for debtors with a disability of over 67%, the new changes stipulate that banks and the State must automatically and obligatorily accept the proposal for debt restructuring<\/strong>, provided that a Certificate of Vulnerable Debtor has been issued beforehand. Previously, banks could ‘refuse’ the restructuring proposal to vulnerable debtors as well. <\/p>\n\n Banks and servicers can disagree with the status of the debtor as vulnerable (if they have evidence that the vulnerable person is not really vulnerable), but they will have to go to court and bear the full cost of the procedure.<\/p>\n\n Those who have already applied for<\/p>\n\n In all of the above cases, in order to be able to apply for inclusion in the Extra-Judicial Mechanism of Law 4738\/2020, a waiver of these procedures must be obtained.<\/p>\n\n The basic rule for the possibility of debt cancellation<\/a> is that the amount of the debts must exceed the value of the debtor’s assets and the value of the co-debtors – guarantors (if they are involved in the proceedings).<\/p>\n\n In particular, the Mechanism provides for partial write-offs:<\/p>\n\n The debt adjustment proposal is automatically derived from the law’s calculation tool, i.e. an algorithm that takes into account the value of the debtor’s assets and disposable income, after covering the reasonable and inelastic costs of both the debtor and his\/her co-debtors – guarantors.<\/p>\n\n In addition, a second settlement proposal is automatically generated in the debtor’s application, called “Creditors’ Counterproposal”, which is more “friendly” to creditors and provides less favourable terms than the one of the calculation tool, such as a shorter write-off, shorter duration of the arrangement, etc.<\/p>\n\n It is noted that in the cases of non-vulnerable persons for whom an auction programme has been issued, a limit of up to 10% of the debt is set on the amount of the advance payment that creditors can request in order to agree to an arrangement and thus suspend the auction.<\/p>\n\n The application is submitted electronically, once completed correctly and without any omissions, through the online platform of the Out-of-Court Debt Settlement Mechanism: After 3 years of operation and many corrections, the Out-of-Court Mechanism procedure has reached a satisfactory level, so that one can say (depending on the case) that it can offer a realistic regulation of accumulated debts to the State, the Insurance Funds, the Banks and the servicers with long repayment periods and the possibility of significant write-offs.<\/p>\n\n However, it is a process with both technical (in terms of correctly completing the application) and monitoring requirements as although the law promises completion of the application within 2 months of final submission, the practice seems to be that the process usually takes 3 to 4 months.<\/p>\n\n If proper and careful work is not done when preparing, completing, submitting and monitoring the application, the law “punishes” with 1 year to submit a new application and the result may not be the desired one.<\/p>\n\n Our office, with responsibility, consistency and knowledge, has successfully<\/a> managed dozens of applications for the Extrajudicial Mechanism, helping our fellow citizens to solve realistically and permanently the debt problem they were facing.<\/strong><\/em><\/p>\n\n Our successes<\/strong><\/a><\/p>\n\nVulnerable Debtors – Privileges<\/h2>\n\n
What are the benefits of integration?<\/h2>\n\n
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Which debtors are not included?<\/h2>\n\n
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<\/h2>\n\nAbility to write off debts<\/h2>\n\n
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How is the regulation proposal calculated?<\/h2>\n\n
How to submit the application?<\/h2>\n\n
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