The following is from March 30, 2018 and no. 1201/2018 Decision of the Magistrate's Court of Thessaloniki, which ordered the "haircut" of debts arising from loans in the amount of 71,53% with the parallel rescue of the borrower's main residence and exemption from the sale of his other assets.
Specifically, he ordered the repayment of the total amount of 36,240.00 euros over 22 years, i.e. with monthly installments of 120.00 euros for the first 27 months and then with installments of 137.50 euros for the next twenty years to save the principal residence, against monthly installments of approximately 700.00 euros and a total debt of 127,323.42 euros.
Consequently, the total "haircut" amounted to 91,083.42 euros, occupying 71.53 % of the loans.
The following is the text of the Decision (edited only to delete the names of the parties, published in the Legal Information Bank LAW):
Settlement of debts of over-indebted natural persons. The applicant is a retired civil servant with an unemployed husband and a child who has just finished his military service. The debtor's pension is the sole family income. Rejects creditor objections. Excludes main residence with defined monthly payments to save it. For the determination of the monthly rescue payment, the commercial value of the main residence, reduced by the costs of the execution, is taken into account, while for the assessment of the value of the seized property, its commercial value, as determined at the time of the seizure, is taken into account. Sale of other assets was not deemed appropriate. Grace period.
VOLUNTARY JURISDICTION PROCEDURE SETTLEMENT OF DEBT - Law 3869/2010 Number: 1201 /2018 THE THESSALONIKI COURT OF THE PEACE WAS ESTABLISHED by the Justice of the Peace ......., appointed by the President of the Three-Member Board of Directors of the Peace Court and the Secretary ..... ... HELD in public in his audience on March 7, 2018 to try the following case between the parties: THE APPLICANT (ex. reg. no. 7239/2017): .............. ........, with VAT number .............., resident of Thessaloniki, .............., which appeared after the attorney attorney of Thomas Kalokiris (AM 591 Board of Directors of Veria), who filed motions. OF THE PARTICIPANTS IN THE CREDIT COURT, who became parties after being legally summoned: 1. ....... 2. .......... The applicant with her application number 7239/2017 addressed in this Court, requested that what is mentioned therein be accepted. For the discussion of the above application, the one referred to at the beginning of this document was set to be tried by the above act. During the presentation of the case by the board in its turn and during the discussion in the audience, the attorneys of the parties, orally developed their claims and asked to accept what is mentioned in the minutes and in the proposals they submitted to the audience. STUDY THE LITIGATION CONSIDERED ACCORDING TO THE LAW [....] In the present application, as supplemented by a statement of her attorney at the hearing, the applicant recounts that she has fallen into a permanent inability to pay her overdue financial debts to the parties to the trial creditors, referred to in the detailed statement contained in the application and requests their settlement by the Court, so that it can be partially relieved of any existing balance of its debts towards the aforementioned creditors, according to the settlement plan it submits, after taking into account the her property and family situation, as presented in her application, as well as to exclude her main residence mentioned in the application from the sale. With this content and request, the considered application, admissible and competent, is introduced before this Court against the procedure of voluntary jurisdiction (art. 3 Law 3869/2010). [...] From the assessment of all the evidence, including the absentee's testimony that was lawfully examined and contained in the transcribed minutes of the public meeting at the same time as this decision, as well as all the documents presented and invoked by the parties, which are taken into account for the inference of evidence and judicial presumptions, none of which is omitted for the essential diagnosis of the case in question as well as their confessions inferred from the documents in question, the following facts were proven: The applicant conducts the .. .. year of her age and is married to ..........................., who holds the .... year of his age. From their marriage, they have had one child, aged ..... years (see marital status certificate). The applicant, a former civil servant, is currently retired and receives a monthly salary of 895.06 euros (see relevant documents in conjunction with her unbiased deposition), derived from a main pension of 827.06 euros and a dividend of 68.00 euros. The applicant's husband is unemployed, without having managed to find a job to date, likewise her son who has just finished his military service (see the applicant's non-judicial statement). Consequently, the only family income is the above monthly pension of the absentee. The applicant's income amounted in 2015 to the amount of 10,609.20 euros and her husband's to zero, in 2014 to the amount of 12.479.94 euros and her husband's to zero, in 2013 to the amount of 15.322.22 euros and her husband's to zero, in 2012 in the amount of 15,624.31 euros and of her husband to zero, while previously, in the year 2008 in the amount of 21,367.30 euros and of her husband in the amount of 87.26 euros, while in 2007 in the amount of 20,538.39 euros and her husband's in the amount of 4,465.00 euros (see settlement notes of corresponding years). There is therefore a clear decrease in the applicant's income compared to the past, where she worked as a civil servant. However, in the past she relied on the repayment of her obligations and on the income of her husband, who had an indicative income of 4,465.00 euros, based on the 2007 settlement note, which increased the family budget. Consequently, given the excessive increase in living expenses, through the economic crisis, her overall income picture appears significantly lower than in the past, since her income has decreased by approximately 10,000.00 euros. Furthermore, as far as her immovable property is concerned, the applicant owns an independent and divided apartment on the ... floor of a building, located on the street ................... ..... in Thessaloniki, with an area of 47.90 m2, which he acquired with the no. .......................... contract of the notary of Thessaloniki .................... ............, which was legally transcribed. This apartment is the main residence of the applicant. The objective value of the apartment amounts to 40,236.00 euros (see the objective property value calculation sheet) and its commercial value in the amount of 35,700.00 euros (see certificate - assessment of the mechanical engineer ......... .....). Also, the applicant owns a percentage of 50%, by virtue of inheritance, three plots of land of 350.00 sq.m., 100.00 sq.m. and 196.00 sq.m. in the area ................. .. , as well as five parcels of land measuring 3,200.00 m2, 5,000.00 m2, 3,744.00 m2, 5,000.00 m2 and 2,500.00 m2 in the same area as well as in the areas ........... .......... of .............. and .................... Movable assets no available to the applicant (see the relevant documents submitted above). As regards these properties (except the main residence of the applicant) Law 3869/2010, in art. 9 stipulates that the debtor may request the exemption of his main residence from the liquidation, a possibility which derives both from the protection of his personality and from the protection of the family and the family home. Although the exclusion of the principal residence is mandatory for the Court, as long as it deems the debtor's claim of permanent inability to pay his overdue financial debts to be valid and then mandatorily adjusts his debts based on his financial situation, the Court does not proceed with the expropriation of the other property of the debtor, if he does not consider it necessary. A divestiture is not necessary when the debtor can cover his debts from the arrangement for the exemption of his main residence. The liquidation is also not necessary, when after the three-year regulation and the regulation for the exemption of the main residence, the amount of the remaining debts can be covered by an alternative utilization of his asset and not by selling it. Furthermore, divestiture is not necessary, when it is not expedient, suitable to yield some consideration to the satisfaction of creditors. This happens when the assets are not of buying interest, due to a percentage of real estate in them, or for some other reason. From the weighing of interests between debtor and creditors, it may appear that keeping an asset at the disposal of the debtor benefits him much more compared to the benefit of creditors and the loss of the debtor in the event that he is deprived of it (see Ir. Sik 285/2013, IrPer 56/2012 TNP LAW). Currently, the Court considers that there is no reason to sell these properties, as their possible sale will not generate either buying interest or a significant price, since the area they are located in does not give them a high commercial value, while it is about percentages ownership and not full ownership over them. Nor does it emerge from the evidentiary process that the applicant makes use of these properties in any way (see forms E1). Consequently, they must be excluded from liquidation. Based on the above and in view of the fact that the applicant is also burdened with the living expenses of other persons, namely her husband and child, the amount necessary for her living amounts to 775.06 euros in the judgment of the Court, which considered particularly moderate. However, for the calculation of the above amount, the fact that the debtors who request to be subject to the beneficial regulations of the law, must, for their part, reduce their expenses to a minimum only to those absolutely necessary and necessary for what is provided by law time period of the regulation. Moreover, in a time prior to the year from the filing of the application, the applicant has assumed the following loan obligations: a) From the first of each the no. ...../........... housing loan agreement in the amount of 124,457.05 euros, equipped with real security and b) From the second of each the no. loan agreement with reservation number TEADY ....., amounting to 2,866.37 euros. The total of her debts therefore amounts to 127,323.42 euros. [...] Based on the above, it is concluded that the above loans due to their amount and the actual situation in which the applicant finds herself today, described above, led her to a permanent and lasting inability to pay her overdue debts to her creditors . Moreover, at the time of undertaking the above obligations, her income was higher (see evidence above in combination with her husband's income in the past) and further, due to the financial crisis with the adverse consequences it had on the Greek economy, it became unfeasible the repayment of the above debt, given that in addition to the reduction of incomes, the current expenses and living expenses of the average Greek family have increased significantly. It is noted that the total debt of the applicant is not considered high, on the contrary, it is common for the data of Greek society before the economic crisis and the overwhelming majority of it was taken to cover only her housing needs (see debt status). Due to the existence of higher incomes in the past and the then good economic situation of the country, with the stability presented by the working conditions of the public sector, the applicant believed that she could meet her obligations while she was not able to predict the financial crisis that would follow which led to her permanent and permanent inability to pay her debts. Indeed, today it is permanently unable to pay. This judgment is inferred from the applicant's liquidity relationship with its overdue obligations. In other words, this relationship is negative in the sense that, after deducting the expenses to cover her living needs (as defined above), the remaining liquidity does not allow her to meet the volume of her debts or at least a substantial part of them, without bearing responsibility for this (see also Eirkouf 1/2012 TNP LAW), since the monthly installments cannot be covered without limiting their necessary living expenses. As a result, the contrary claim of the first of the creditors is rejected as essentially untenable. Moreover, her inability to pay is emergent and did not exist before when she entered into her loan obligations with the creditors. The applicant's lending is within reasonable limits in relation to her income and was fully within her financial repayment capabilities. For this reason, its behavior as a whole is not considered fraudulent. Furthermore and as an additional element, although it is not required for the conviction of the debtor's fraud (see AP 286/2017, AP 153/2017, AP 65/2017, AP 64/2017 TNP LAW), it is stated that it was not proven by the hearing procedure how the applicant deceived the employees of the credit institutions by providing false information or concealing her obligations, which were not registered in the databases used by the banks for the financial behavior of their customers, given their possibility through the computerized system they have (see A . Cretan, Regulation of the debts of over-indebted natural persons, ed. 3rd, 2014, under article 1, no. 31, 32, 36, 37, 38, pp. 46-51, BrThes 26/2016, IrVamou 11/2015, IrKalam 28/2014, Eiriliou 405/2014 published in TNP LAW, EirHan 233/2014 civil, Eiriliou 408/2013, civil, IrAth 1338/2012 civil, IrAth 274/2012 EfAD 2012, 1124, IrF lor 1/2012 NoB 2012 , 1191, IrAth 257/2012 EPOLD 2012, 631, IrAth 209/2012 Hridik 2012, 293). As a result, the contrary claims of the first of the creditors regarding her fraudulent involvement in permanent insolvency are judged in this particular case to be rejected as essentially unfounded. Since, therefore, the applicant adequately met her obligation to prove that the conditions of Law 3869/2010 and in particular those of art. 8 par. 2 and 9 par. 2 of Law 3869/2010 as the latter were supplemented and amended by the provisions of Laws 4336/2015 and 4346/2015 (art. 338 of the Civil Code), the Court will settle the debts of . With regard to the more specific content of this arrangement, taking into account the applicant's basic personal and family needs and the fact that her financial situation will not improve, at least in the immediate future, it is judged that after deducting the family's living expenses, the amount of 120.00 euros remains , which must be made available to creditors. From the above arrangement, the period of validity of the temporary order, which has been in force since July 2017, i.e. nine (9) months (see payment documents) must be subtracted in combination with the fact that in the months of July and August 2017 the the first of the defendants continued to withhold the amount of the monthly installment from the applicant's payroll, so there was no obligation for additional monthly payments. Thus, his contrary claim of non-observance of the temporary injunction is deemed to be rejected as essentially unfounded. Consequently, the absent party will pay the amount of 120.00 euros to its creditors equally and for a period of 27 months as follows: a) To the first of all for the no...../.... ......... housing loan contract the amount of 117.29 euros per month for 27 months and b) In the second of each for the no. loan agreement with reservation number TEADY the amount of 2.71 euros per month and for 27 months. [...] The above first regulation will be combined with the provision of art. 9 par. 2 L. 3869/2010, as amended and supplemented by L. 4336/2015 and L. 4346/2015 since the payments for 36 months (including the temporary order) do not result in full payment of the creditors' claims and a request is submitted to exempt the applicant's house (main residence) from the sale, after which this exemption is mandatory for the Court (see Ath. Cretikos, op. p. 148 - no. 16), with the assistance and of the other conditions (its value does not exceed the limit of the tax-free amount for the acquisition of a first home, increased by 50%) and if a) There is a property that serves as its main residence for which a request for exemption from the sale is submitted, b) the applicant has an income that does not exceed 170% of reasonable living expenses (1126.00 euros the living expenses x 70% = 1.914.20 euros) since this amounts to 895.06 euros (see article 9 par. 2 which refers to article 5 par. 3 regarding the determination of the living expenses in conjunction with the decision of the Supreme Court 54 /15.12.2015 Official Gazette 2740), c) The objective value of her main residence does not exceed the amount of 180,000 euros, increased accordingly for a married debtor (see sheet for calculating the objective value of a property) and d) the creditors in the context of art. 338 of the Code of Civil Procedure did not plead or prove as necessary that the applicant was not a cooperative borrower based on the banks' Code of Conduct. Also, based on art. 9 par. 2 b) the applicant has formulated with her proposals her debt settlement plan in such a way that, in order to save her main residence, she foresees that she repays on the one hand the maximum of her ability to repay, and on the other hand that she will pay such an amount that her creditors to be in the same financial position compared to their satisfaction from any foreclosure sale of the home. Therefore, it is now important for what the debtor will pay to save his main residence, its commercial value is reduced by the costs of the execution, while for the assessment of the value of the property, which is confiscated, its commercial value is taken into account, as determined at the time of seizure. This value is also defined as the first offer price based on the provision of art. 993 par. 2 and 995 of the Civil Code, as amended by the provisions of Law 4335/2015. Before this amendment took place, the appraised value by the bailiff or the hired expert, which could not fall short of the objective value, and the determination of the first offer price was made at 2/3 of the estimated value or the objective value respectively, something that does not apply today and does not occupy the regulatory scope of the present application. Consequently, the opposing request of the absentee (as formulated in her proposals) which specifies the first offer price of her main residence at 2/3 of its commercial value is not based on the law and is deemed to be rejected. Furthermore, the Bank of Greece issued the no. 54/2015 Act of the Executive Committee, but a database provided for in chapter B article 6 of the above Act has not yet been created and the Court based on the evidence presented and the permissible ex officio investigation of the actual commercial value of similar properties in the same area , taking into account the location, the age and the floor, the valuation report of the above-mentioned appraiser who values the commercial value of the property in the amount of 35,700.00 euros (see the attached property valuation) determines the commercial value of the above main residence of the applicant , indeed, in the amount of 35,700.00 euros. Deducting the costs of enforcement (i.e. bailiffs' fees, notary's fees, publication costs, Mortgage Registry compensation) which are calculated by the Court at 2,700.00 euros, the minimum amount that creditors would receive in the event of enforcement and auctioning of the main residence of the applicant amounts to 33,000.00 euros (see related to the above and EirThes 3534/2017 civil). The above amount is required to be paid by the applicant for a period of 20 years (240 months), i.e. an amount of 137.50 euros per month for 240 months, taking into account all of the applicant's debts, her financial capacity and her age. According to the provision of art. 977 par. 2 of the Civil Code, "if there are more requirements than those mentioned in article 976 no. 2, the substantively just order is followed". The article 1007 of the Civil Code, refers to the above provision. The above payments will therefore be made as follows: The 90% of the auction, i.e. 29,700.00 euros will be paid to the first party, while the remaining 10% of the auction, i.e. 3,300 00 euros will be paid to the second party. However, the total of her debt amounts to the amount of 2,866.37 euros, while with the previous arrangement and the temporary order, the total amount of 97.56 euros will be paid. Thus, the applicant will ultimately pay the second of the defendants the amount of 2,768.81 euros, while the first of the defendants will pay the amount of 30,231.19 euros. The monthly payment will be made as follows: On the first of each for the no. ...../....... housing loan contract the amount of 125.97 euros per month and for 240 months and b) In the second of each for the no. loan contract with number ......., the amount of 11.53 euros per month and for 240 months. The monthly installments will begin to be paid 27 months after the publication of this notice, immediately after the end of the previous arrangement, a grace period that must be given to the applicant, even though such an option is not provided in Law 4336/2015, since this is considered more juridically and politically correct and results in proper and effective compliance with the regulation on its part. In particular, regarding the issue of the grace period, in the new provision of art. 9 par 2 after Law 4336/2015, but also Law 4346/2015 the provision of the possibility of granting a grace period has been omitted. This, obviously, is due to a detour since it completely contradicts the whole spirit and purpose of the provisions of the law and especially this provision of art. 8 par 2, which provides for the definition of monthly payments based on the debtor's income and needs, with the aim of alleviating him, so that he can service part of their debts and get rid of the rest, preserving a minimum standard of living. And this is because, as long as the two arrangements for monthly payments coincide, that is, those of art. 8 par. 2 and 9 par. 2, the debtor will be asked to pay during the first three years, which will operate in parallel, amounts significantly greater than what he can based on his income and needs, which are also the criteria for his definition of the amount of the payments of the regulation of 8 par. 2, which leads with mathematical precision to his deduction, instead of his intended exemption. For this reason, the omission should be covered interpretatively based on the spirit of the law's regulations in order to realize the purpose pursued through them above. Since the fulfillment of the regulation of art. 8 par. 2 depends according to the law on the income criteria established by this provision, and its implementation is impossible if it operates in parallel with the regulation of art. 9 par. 2, since its basis for the definition of the installments is completely overturned, i.e. the debtor's current ability to repay, as judged on the basis of the provision's income criteria, the second regulation should logically follow the first, which which can happen by granting a grace period at the same time as the first regulation so that the two regulations do not coincide, as was expressly provided by the previous law and was accepted under its validity by the jurisprudence. Besides, the granting of a grace period is not provided for by the provision of art. 9 par. 2, but at the same time it is not prohibited, since it does not provide for a time for the start of payments, neither directly, for example, by issuing the decision, nor indirectly by prohibiting the judicial suspension of it as is done through the provision of art. 8 par. 6 in the regulation of this article (see also IrPatr 350/2016 TNP LAW). Finally, the repayment of this amount should be made with interest, without compounding, at the average mortgage interest rate with the floating interest rate, which will be valid at the time of repayment, according to the Bank of Greece statistical bulletin which will be adjusted with interest reference to the Main Refinancing Operations of the European Central Bank, or, in case of setting a fixed interest rate, the average mortgage interest rate for a period corresponding to the regulation, as similarly appears from the Bank of Greece's statistical bulletin. After this arrangement, there is no possibility of covering the remaining part of the applicant's debts, as regards the claim of the first of the defendants (the claim against the second is fully satisfied) which is not serviced as she has no other income, while other real estate her property was not considered suitable for sale. Pursuant to the above, the considered application must be accepted in part as well-founded and in its substantive aspect and the applicant's debts referred to in this application must be settled, as specifically defined in the ordinance. This regulation is valid on the condition of the normal execution of the obligations imposed on the applicant by this decision (art. 11 par. 1 Law 3869 /2010) and subject to its possible amendment.[...] FOR THE REASONS THEY ARE JUDGED in the absence of the second defendant and in opposition of the other parties. REJECTS what was deemed inadmissible on grounds. Partially GRANTS the application. SETTLES the applicant's debts. DEFINES monthly payments in the amount of one hundred and twenty (120.00 euros) and for a period of twenty-seven (27) months that will begin one month after the publication of this notice and will be paid on the first fortnight of each month symmetrically as follows: a) On the first of for the housing loan agreement no..../.............. the amount of 117.29 euros per month for 27 months and b) In the second of the for the no. loan agreement with number ..... the amount of 2.71 euros per month for 27 months. EXCEPTS from the sale the main residence of the applicant, i.e. an independent and divided apartment on the ... floor of a building, located on the street .................. in Thessaloniki, area 47 .90 sq. IMPOSES on the applicant the obligation to pay for the rescue of her main residence the total amount of thirty-three thousand (33,000.00) euros, i.e. one hundred and thirty-seven euros and fifty cents (137.50 euros) monthly and for a period period of twenty (20) years (240 months). These payments will begin after the lapse of twenty-seven (27) months from the publication of this notice (the first month after the end of the previous arrangement) and will be paid on the first fortnight of each month as follows: On the first of each for the no...../...... housing loan contract the amount of 125.97 euros per month and for 240 months and b) In the second of each for the no. loan contract number ..............., the amount of 11.53 euros per month and for 240 months. These payments will be made without interest at the average floating mortgage interest rate that will be in effect at the time of repayment, according to the Bank of Greece's statistical bulletin, adjusted by the reference rate of the main refinancing operations of the European Central Bank or, in case of fixed interest rate determination, the average mortgage interest rate for a period corresponding to the regulation, as similarly appears from the Bank of Greece's statistical bulletin. EXCLUDES the other real estate assets of the applicant mentioned in the reasoning. REMINDS the applicant that in the event that during the settlement period assets come to her due to death, she is obliged to allocate half of their value to the satisfaction of creditors. He must also notify the Court's registry within one month of any change of residence or pension institution as well as any significant improvement in his income or assets, so that the file kept in accordance with paragraph 5 of article 4 can be updated. DECIDED, DECIDED and PUBLISHED, after having been delivered in a cleanly written original and electronic format, in Thessaloniki at an extraordinary public meeting in his audience on 30.3.2018 without the presence of the parties and their attorneys. EIRINODIKIS THE SECRETARY
Thomas Steph. Summer
Lawyer
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