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May 24, 2022

Personal bankruptcy law adopted

The Lower Chamber unanimously adopted on Wednesday the draft personal bankruptcy law which stipulates that any citizen that finds himself unable to pay his debts through no fault of his own should be able to reschedule his debts on the basis of a five-year financial restructuring plan. All parliamentary groups backed the draft law filed by PSD MP Ana Birchall and by another 153 MPs. PSD MP Ana Birchall stated that the adoption of the draft law has made “legislative history,” being for the first time when citizens will have a personal insolvency law.

“The draft law is based on studies conducted in 12 states and is the result of debates that took place since March 2014 and that involved all institutions concerned. The law will be a real help for good-faith Romanians that struggle with debt,” Birchal added.

According to the stipulations adopted, any good-faith debtor that enters “financial troubles” through no fault of his own can reschedule his debts on the basis of a five-year restructuring plan. From the moment the insolvency procedure starts the debtor can no longer be the target of a foreclosure procedure and any penalties for debt payment delays are stopped.

“From the moment the personal bankruptcy procedure starts, any good-faith debtor that has financial troubles through no fault of his own will no longer worry about being foreclosed or losing his home, so the foreclosure is an exception, not a rule. If he has certain debts and believes he cannot recover financially and finds himself in financial troubles through no fault of his own, a good-faith debtor can reschedule these debts, on the basis of a five-year reimbursement plan that can be extended for another year, so as not to be foreclosed. The moment the insolvency procedure starts debt no longer piles on debt, penalties on penalties. Any debt payment delay penalty is immediately stopped,” Ana Birchall explained.




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