The leaders of the Chamber of Deputies have postponed by a week the plans to hold an extraordinary session to address the draft law on the insolvency of individual persons. The plenary meeting where the subject will be discussed will most likely take place next Wednesday, by that interrupting the MPs’ holiday, as a result of the Swiss franc crisis.
The Standing Bureau of the Chamber of Deputies decided on Tuesday to call the Legal Affairs Committee in session as of Wednesday, in order for it to write the report on the personal insolvency bill. Valeriu Zgonea noted that the plenary session of the Chamber would be called the following week, within 24 hours of the completion of the report, Mediafax informs.
The Wednesday meeting of the Legal Committee will begin at 10 am and debates may continue until next week.
According to the Chamber Speaker, Valeriu Zgonea, the plenary session will be called within 24 hours of the finalisation of the report on the draft law, next week.
The Standing Bureau of the Chamber of Deputies also decided to call in session on Wednesday, at 11 am, the Budget Committee, at the request of the Committee chairman, to discuss the situation created after the steep appreciation of the Swiss currency against both the euro and the leu.
PNL Co-president Alina Gorghiu had announced in a release sent to Mediafax on Monday that PNL was going to ask for an emergency session of the Parliament for the adoption of the law on the insolvency of individuals, pointing out that it was ‘the only regulation’ that could help in the context of the massive appreciation of the Swiss currency.
What would an individual insolvency law mean and how it would help Romanians who can no longer cope with debt
Following the model of company insolvency, individuals who have debts and who are unable to repay them will be able to choose to declare insolvency, after this new law enters into force, in which situation they will be protected from creditors for a certain period.
According to the draft law currently under debate in Parliament, a judge must approve the insolvency of a person. Once the procedure is opened, the insolvent person will have a grace period of 3-5 years to set up a financial redress plan and repay part of the debt.
During the grace period, the debtor will be protected from possible foreclosures which, under the current law, may occur shortly after the accumulation of outstanding debt owed to banks.
‘The individual person insolvency law places the defaulting client in a position where his assets may not be executed and where he is able to carry out his agreement with the bank. The individual insolvency law gives the bank client who is unable to repay the loan a solution of re-scheduling of instalments and a correct negotiation position in relation to the bank, based on his actual income. Unlike other proposed regulations which do not apply retroactively, this one can be enforced right away’, PNL states in a release. The party has asked for an emergency meeting of the Parliament to adopt the individual insolvency law, in the context of the crisis caused by the appreciation of the Swiss franc.
Personal insolvency may be requested by any Romanian who has a minimum of two debts and is able to prove that he/she is unable to repay those within 30 days of the date when they fall due.
The person who applies for insolvency must submit to the Tribunal an application, a list of all assets he owns, the situation his debts as well as a report on income made in the last three years and expected incomes in the future.
Upon the beginning of the insolvency procedure, a judicial administrator will also be appointed. Debts exiting at the time the procedure is opened will not accumulate any more interest, additional costs or penalty charges.
The law on the insolvency of individual persons was tacitly approved by the Senate in December 2014 and will now be debated on by the Chamber of Deputies.