The following is the Decision of the Naoussa Magistrates' Court dated January 10, 2020 and No. 10/2020, on yet another case successfully handled by our office, which imposed zero payments on the applicant and saved his main residence, as well as all of his other real estate and movable property.
Specifically, he set zero payments against debts of 68,374.84 euros, judging that the relationship between his liquidity and his debts is negative in the sense that after deducting the amount required to cover his monthly needs, his remaining liquidity does not allow him to meet his debts.
At the same time, the applicant will pay the amount of 12,500 to save his first residence, which corresponds to the commercial value of the property minus the costs of enforcement.
Therefore, the total "haircut" amounted to approximately 55,874.84 euros, accounting for 82% of the debts!
The following is an excerpt from the Decision (edited to remove the names of the parties)
VOLUNTARY JURISDICTION
DECISION NUMBER: 10/2020
THE COURT OF PEACE OF NAOUSSA
IT WAS ESTABLISHED by Justice of the Peace Cornelia Hatzipanayiotou, who was appointed by an act of the director of the Veria Court of First Instance, with the collaboration of the Secretary Rodoula Tsiousi.
SAID publicly in its courtroom in Naoussa on April 11, 2019, to try the following case between:
Aitons: ……………….. resident of …………. Naoussa Imathia, with Tax Identification Number ………………T.O.Y. Veria, who appeared in Court through his attorney-in-fact Thomas Kalokiris (Reg. No. 11982, Thessaloniki City Council).
Defendants of the application: 1. The banking company with the name "Piraeus Bank S.A.", headquartered in Athens, Amerikis no. 4 and legally represented, which was represented in Court by the attorney-at-law ……….. 2. The Independent Authority of Public Revenue (A.A.D.E.), legally represented by the Head of the Tax Office of Veria, which was represented by a statement of the Head of the Tax Office of Veria Dimitra Stamou in accordance with article 20 par. 6 of law 3086/2002 3. ……….., resident of …….. Naoussa Imathia, who did not appear in Court, nor was he represented by anyone.
SUBJECT OF CASE: The application dated 3-12-2018 and with cat. no. 144/5-12-2018 for judicial regulation and exemption from debts under Law 3869/2010, of voluntary jurisdiction, for the discussion of which the hearing referred to at the beginning was set.
STUDY THE FILE
IT WAS CONSIDERED IN ACCORDANCE WITH THE LAW
[…] With the present application, as it was admissibly completed (224, 236, 741, 745 and 751 of the Code of Civil Procedure), with an oral statement by the applicant's attorney, which was recorded in the minutes with the same number as this one, but also with his proposals, which were legally filed, the applicant, citing a lack of bankruptcy capacity, a permanent inability to pay his overdue financial debts to his creditors, mentioned in the application, and setting out his family and property situation, requests that the plan for settling his debts included in the application be ratified or amended in accordance with the provisions of art. 7 of Law 3869/10 and, in the alternative, that the settlement of his debts be ordered, with the aim of partially relieving him of them, that the main his residence and to exclude his other assets from the sale. The application is duly brought for discussion before this court, under the procedure of voluntary jurisdiction (article 3 of Law 3869/2010) and for its admissibility a) the procedure provided for in article 5 of Law 3869/2010 was complied with and in particular the applicant notified within fifteen days from the filing of the application a copy of the application with an act of designation of court and a summons for it to his defendant creditors and to the co-debtor …………. (see the service reports of the bailiff of the Thessaloniki Court of Appeal district with headquarters in the Veria Court of First Instance with numbers 11063Β/17-12-2018, 11071Β/17-12-2018 and 11073Β/17-12-2018), b) no other application by the applicant for the settlement of his debts is pending in this Court or another Court of Justice of the country, nor has a decision been issued for settlement with exemption from his debts, as ascertained after an ex officio inspection pursuant to art. 13 par. 2 of the same above law and by the certificate of the Athens Court of Justice with number 1397/16-7-2019. Furthermore, the applicant's solemn declarations dated 3-12-2018 regarding the accuracy and completeness of the statements of his assets and income, his creditors and his claims in terms of capital, interest and expenses, as well as regarding the non-transfer of real rights over his real estate during the last three years, that he does not have bankruptcy capacity and consents to the lifting of banking secrecy for the reasons provided by law, as well as the other documents specified in par. 1 and 2 of article 4 of Law 3869/2010, have been submitted legally and within the deadline. […] Also, the application is final, since the applicant includes in his application the elements of art. 4 par. 1 of Law 3869/2010 as well as the conditions of art. 1 of Law 3869/2010 and legal, based on the provisions of articles 1, 4, 5, 8, 9 and 11 of Law 3869/2010, as amended […].
The defendant creditor "Piraeus Bank S.A.", by a statement of its attorney, which was made in the hearing during the discussion, was registered in the same numbered minutes of this hearing and specialized in its written proposals submitted during the discussion and the Greek State with the numbered prot. 15241/2019 statement in accordance with article 20 par. 6 of law 3086/2002, denied the application and requested its rejection. Furthermore, "Piraeus Bank S.A." claimed that the applicant was fraudulently rendered permanently unable to pay his overdue financial debts, as he knew when he assumed the loan obligations that he would not be able to meet them. This claim constitutes a legitimate objection and will be examined in substance below. It also proposed the claim that the applicant is abusively exercising his right to be subject to the regulations of Law 3869/2010, since on the one hand, although he had the financial capacity to service his debts, he made them overdue in order to benefit from the beneficial provisions of Law 3869/2010, and also failed to lease the land of his property referred to in the application in question. However, these claims - even if true - do not constitute the claim under art. 281 of the Civil Code, an objection is considered to be rejected, because the applicant's choice to be subject to the regulations of the law constitutes his legal right in a modern state of law that requires his economic and social liberation in order to integrate into social and economic activity with a view to the general interest (Ath. Cretan Law Regulation of the debts of over-indebted natural persons and other provisions - Ed. 2010, Introduction App.) and this choice alone does not establish abuse. The settlement plan is determined at the free discretion of the debtor and constitutes a proposal to the creditors, while it is not binding on the Court, which will freely assess this proposal based on the relevant elements, the lessons of common experience and the living conditions and needs of the applicant, and in case it deems this unreasonable and unacceptable, it intervenes and shapes it by deviating from what was requested (see I. Venieris, Application of Law 3869/2010 for over-indebted natural persons, 2nd edition, p. 179). Finally, weakness does not necessarily constitute an extraordinary event, but also other factors, such as failure regarding the borrower's financial capabilities, unfortunate planning, aggressive credit promotion practices, income constraints, high interest rates). Furthermore, it was claimed that the applicant violated the duty of honest declaration regarding his financial situation, as he did not state that in order to secure the loan agreement No. 0010-1212-00002605515 (former ATE 153/1999) he has registered a mortgage on a property, as well as that the actual commercial value of the main residence is valued at at least 78,610 euros. This claim is legal (art. 10 par. 1 of Law 3869/2010) and will be examined further on its merits.
From the sworn examination of the witness in the hearing of this Court, which is contained in the minutes of the same number as this, from the documents admissibly and legally presented by the parties, useful also for the collection of judicial evidence, from the confessions deduced from all the allegations of the parties and from what is known to all, the following essential facts were proven: The applicant, born in the year ….. is married and the father of three adult children. Both he and his wife are retired farmers with a monthly income of 456.60 euros and 368.12 euros respectively and reside with their son and his four minor children in a privately owned residence in …….. Naoussa, Imathia. It turned out that they are helping the latter financially, as he has a meager income, while his wife passed away in 2015. In addition, the applicant is facing serious health problems, as he suffers from chronic end-stage renal failure and undergoes a four-hour hemodialysis program three times a week (see the medical report of nephrologist Nikos Zoumbaridis dated 9-10-2018). According to the tax returns he provides, his total declared family income was: for the financial year 2008 (fiscal year 2007) 5,802.94 euros for the applicant and 4,137.35 euros for his wife, for the financial year 2009 (fiscal year 2008) 6,566.61 euros for the applicant and 4,870.31 euros for the wife for the fiscal year 2010 (fiscal year 2009) 6,707.87 euros for the applicant and 4,998.23 euros for his wife, for the fiscal year 2013 (fiscal year 2012) 7,056.88 euros for the applicant and 5,286.83 euros for his wife for the fiscal year 2014 (fiscal year 2013) 5,788.66 euros for the applicant and 4,511.40 euros for his wife, for the tax year 2014 5,679.85 euros for the applicant and 4,511.52 euros for his wife for the tax year 2015 5,625.75 euros for the applicant and 4,464.44 euros for his wife, for the tax year 2016 5,567.44 euros for the applicant and 4,417.44 euros for his wife and for the tax year 2017 5,479.24 euros for the applicant and 4,417.44 euros for his wife. The applicant has in full ownership a two-storey residence with a total area of 152 sq.m. built on a plot of land of 544 sq.m. which constitutes a divisible part of the plot numbered …. of a plot of land with a total area of 1,632 sq.m. included in the approved town planning plan of the Community of ….. Naoussa, Imathia. The said part of the plot came to him by virtue of the declaration of acceptance of inheritance numbered 4227/1992 of the notary of Naoussa, Zoe Zachariadou – Douldouri. The above two-storey house constitutes the applicant's main residence, for which he requests the exemption and its non-objective value is 19,753.92 euros. Furthermore, by virtue of the sales contract No. 3498/1978 of the notary of Naoussa Evangelos Biliouris, the applicant is the owner of the field No. …… of category B with an area of 4,770 sq.m. located at the location …… in the rural area of …… Naoussa, Imathia. Apart from this, he does not own any other movable or immovable property. The living expenses of the applicant's family, taking into account reasonable living expenses, which, however, only function as guidelines and cannot produce binding legislative force for the Court (see I. Venieris-Th. Katsas, Application of Law 3869/2010 on Overindebted Natural Persons, 2nd Edition, p. 498), and the fact that he supports his son and his four minor grandchildren, amount to approximately 800 euros. Furthermore, in a period prior to the year from the filing of the legal application, the applicant assumed the following debts towards his creditor, respectively, which, by law, are considered overdue upon notification of the application and are calculated at their current value at the time of notification of the application, with the exception of loans that are secured in rem, the interest on which continues at the interest rate of the current debt until the time of issuance of the decision (article 6 par. 3 of law 3869/10) and specifically the applicant owes the defendant "Piraeus Bank S.A.", according to the certificate of debts dated 29-10-2018, a) from the housing loan agreement numbered 10121200002627756, the amount of 22,070.03 euros, b) from the housing loan agreement number 101212000026272238, the amount of 25,359.46 euros and c) from the agricultural loan agreement number 10121200002605515, the amount of 20,945.35 euros. Therefore, the total amount of the above debts of the applicant that can be settled amounts to 68,374.84 euros. The above amounts do not include the applicant's debts to the Greek State, as their inclusion in law 3869/2010 was deemed contrary to the constitution. The applicant was initially consistent with his above-mentioned loan obligations, which of course were mainly covered by his co-debtor son, and in any case he was able to cover them, as the income he earned from his pension was higher. Moreover, his son, who happens to be a farmer, was in a much better financial situation, while the illness and death of his daughter-in-law and mother of his four minor grandchildren significantly burdened the financial situation of the wider family. Consequently, due to the economic crisis due to which his pension was reduced, the above-analyzed unexpected problems of his son's family, the unforeseen increase in the cost of living and the increase in direct and indirect taxation, the repayment of his loans became impossible. It should be noted that the applicant is facing serious health problems which, as mentioned above, require constant medical monitoring. As a result of the above, the relationship between his liquidity and his debts during the current period is negative in the sense that after deducting the amount required to cover his monthly needs, his remaining liquidity does not allow him to meet his debts. This relationship is not expected to improve, at least in the near future, since the monthly needs of his family are not expected to be limited, while at the same time his loan obligations are constantly increasing due to the burden of the loan agreements with default interest. Under the above facts, it is proven that the applicant, who does not have bankruptcy capacity, has become, without malice, permanently unable to pay his financial debts. The plan proposed by him to settle his debts was not accepted by his creditors and consequently the applicant meets the conditions for his inclusion in the regulation of Law 3869/10 and the conditions for the settlement of his debts by the Court, pursuant to art. 8 et seq. of Law 3869/2010, are met, as there are no disputed claims. It is further concluded that the applicant does not have assets to satisfy the defendants for liquidation. In particular, taking into account the low commercial value of his field, in combination with the downward trends prevailing at this time in the real estate market, it is not considered suitable for sale, because it is not going to generate purchasing interest, nor will it yield a significant price to satisfy creditors, taking into account the costs of the sale process (liquidator's fee, publication costs, etc.), so its sale should not be ordered pursuant to article 9, paragraph 1 of Law 3869/10.
It should be noted that the provision of article 62 par. 3 2b of law 4549/18 provides for the distribution of the monthly installments of the arrangement of article 8 par. 2 and that of article 9 par. 2 during the period of payments of the three-year or five-year period of the first arrangement. It should be noted that in the context of the distribution, the basic principles of the two arrangements must be observed, namely that of not exceeding the debtor's repayment capacity, as defined by the court, with regard to the arrangement of article 8 par. 2 and that of paying the mandatory rescue consideration to the creditors with regard to the arrangement of article 9 par. 2 (see also explanatory memorandum of law 4549/18). Therefore, with regard to the installment of article 8 par. 2, the amount of the difference after deducting from the amount of the installment of article 8 par. 2, as formed after the inclusion of the advances, of the installment of article 9 par. 2, and of course if there are margins. In addition, according to the above provisions, no grace period is provided between the two arrangements, they begin at the same time and the amount of the monthly installment is distributed as above. In this case, the Court will oblige the applicant to pay a certain amount monthly to his first defendant creditor for a period of three years, namely 36 months [art. 8 par. 2 of Law 3869/2010]. Thus, given that the applicant's family income amounts to approximately 824.72 euros per month according to the above, while his family's living expenses amount to 800 euros, he can allocate the amount of 25 euros per month. However, as regards the installment of article 8 par. 2, the amount of the difference should be determined monthly after deducting from the amount of the installment of art. 8 par. 2, as formed after the inclusion of the advances, that of the installment of art. 9 par. 2, and if of course there are margins, the Court should first rule on the amount that should be paid to save the applicant's first residence, since no grace period is now provided.
The above regulation of the applicant's debt will be combined with that provided for by the provision of article 9, paragraph 2 of Law 3869/2010, as currently in force after its replacement by article 14 of Law 4346/2015, if his debt is not repaid and a request is made to exclude his residence from the sale, after which the said exemption is mandatory for the Court if the conditions set out in the said article, as in force from 1-1-2016 for its inclusion in the regulation, are cumulatively met. In this case, it was proven that a) the property described above serves as the applicant's main residence, b) the applicant has a monthly family income that does not exceed reasonable living expenses increased by 70 % (800 euros living expenses X 170% = 1360 euros), since this amounts to approximately 824.72 euros per month, c) the objective value of his main residence does not exceed the protection limit set by law (180,000 euros for a single person, increased by 40,000 euros for a married person and by 20,000 euros for each child and up to a maximum of three) and d) the applicant is a cooperative borrower towards his creditors, based on the Code of Conduct of banks, since the contribution of specific condition. Therefore, the conditions of the law for the inclusion of his residence in the regulation of art. 9 par. 2 for exemption from sale are met. According to the above provision, in order to determine the amount that the debtor is obliged to pay to save his main residence, his maximum repayment capacity should be taken into account on the one hand and on the other hand, the fact that he will pay such an amount that his creditors are in the same financial position compared to their satisfaction from any sale of the residence by forced execution. Therefore, the estimated amount of the auction, based on the current commercial value of the property, less the costs of execution, is now important for what the debtor will pay to save his main residence, while the first bid price for the auction of a property is defined as its commercial value (see art. 993 par. 2 sub-paragraph c and 995 par. 1 sub-paragraph d of the Code of Civil Procedure as well as P.D. 59/2016 and No. 54/2015 Decision of the Executive Committee of the Bank of Greece). Therefore, in order to save his main residence, the applicant must pay an amount that his creditor would receive in the event of forced execution, namely an amount corresponding to the commercial value of his main residence (see art. 993 par. 2 sub-paragraph c' and 995 par. 1 sub-paragraph d' of the Civil Procedure Code), minus the costs of the forced execution. Given that his creditor did not submit, in accordance with no. 54/15-12- 2015 Act of the Executive Committee of the Bank of Greece, assessment regarding the estimated amount of the auction of the debtor's main residence, the Court, within the framework of the investigative system that governs voluntary jurisdiction and allows the ex officio verification of the facts, will determine the commercial value of the applicant's main residence described above based on the evidence provided. Specifically, taking into account the characteristics of the specific property, its area and age, the area where it is located, the commercial value of similar properties in the same area, as well as the downward trends in the real estate market due to the unfavorable economic situation, in combination with the assessment of the mechanical engineer Antonios Economopoulos, its commercial value is estimated at 15,000 euros. Deducting the costs of forced execution, which are estimated at 2,500 euros, the minimum amount that the creditor would receive in the event of forced execution by auction of the main residence amounts to 12,500 euros. Taking into account his financial capacity and his age, monthly payments are set to the defendant "Piraeus Bank S.A." for 60 months, i.e. for 5 years, starting on 01.02.2020, and will be payable within the first ten days of each month and each monthly payment will amount to (12,500 euros/60 months =) 208.33 euros. In the above manner, the applicant will pay the maximum of his repayment capacity, and an adjustment of the above amount does not appear to be possible based on his current financial data, and in addition, he will pay such an amount that his creditor will not be in a worse financial position than the one he would be in in the event of forced execution. The payment of the above installments will be made without compounding at the average interest rate of a floating-rate mortgage loan, which will be in effect at the time of repayment, according to the statistical bulletin of the Bank of Greece adjusted by the reference interest rate of the Main Refinancing Operations of the European Central Bank. It is noted that the two arrangements are applied simultaneously, without a grace period being provided for in accordance with the provision of article 62 par. 3 2b of law 4549/18. In this case, given that in order to save his main residence, the applicant must pay the first defendant "Piraeus Bank S.A.", monthly the amount of 208.33 euros, according to the above, no amount remains for the arrangement of article 8 par. 2, since the above amount exceeds the debtor's repayment capacity, which was calculated at 25 euros per month, even without taking into account the payments made pursuant to temporary order no. 16/2019. Therefore, the Court finds that for the applicant, the monthly payments for 36 months should be set at zero, with payments commencing on 1-2-2020, taking into account that an amount of 208.33 euros, as detailed above, will be required to be paid for the exemption from the sale of his main residence and therefore there is no balance left to fulfill his obligation under article 8 par. 2, in accordance with the method of distributing the payments of paragraph 2 of article 8 and paragraph 2 of article 9 of law. 3869/2010, defined in paragraph 2b of article 9 of law 3869/2010, which was added by law 4549/2018. The Court will not schedule a new hearing to examine the case of redetermination of the monthly payments for the applicant, as there is no possibility of improvement in his financial data and income within the time period of the above regulation, taking into account the general unfavorable economic situation and the resulting uncertainty of ensuring sufficient income in the immediate future, as well as the fact that the regulation of article 8 paragraph 2 applies in parallel with the regulation of article 9 paragraph 2 for the preservation of the applicant's main residence.
Consequently, the application should be partially accepted as well-founded in its substance and the applicant's debts should be regulated, with respect to his creditor "Piraeus Bank S.A.", which is included in the arrangement, since the inclusion of his debts to the Greek State was deemed unlawful, with the exception of the sale of his assets, in accordance with what is specifically defined in the operative part. Finally, no provision for legal costs will be included as defined in art. 8 par. 6 of L. 3869/2010.
FOR THOSE REASONS
JUDGES in the absence of the parties and in the absence of the co-debtor.
REJECTS everything he deemed unacceptable.
The application is partially GRANTED.
SETTLES the applicant's debt to his creditor "Piraeus Bank S.A.", which is included in the arrangement pursuant to art. 8 par. 2 of law 3869/2010, for three years, i.e. for 36 months, specifying zero monthly payments to the defendant, starting from 1-2-2020.
EXCLUDES from the sale a) the described main residence of the applicant, namely a two-storey house with a total area of 152 sq.m. built on a plot of land of 544 sq.m. which constitutes a divisible part of the plot numbered ….. with a total area of 1,632 sq.m. included in the approved street plan of the Community of …… Naoussa, Imathia and b) the field numbered …… of category B with an area of 4,770 sq.m. located at ….. in the rural area of ….. Naoussa, Imathia.
IMPOSES on the applicant the obligation to pay to the first defendant "Piraeus Bank S.A.", for the rescue of his above-mentioned main residence, the total amount of 12.500 euros in 5 years and in particular imposes on him the obligation to pay monthly for 60 consecutive months, the amount of 208.33 euros. The payment of these monthly installments will begin on 1-2-2020, will be made within the first ten days of each month, will last 60 months and will be made with interest, without compounding, at the average interest rate of a mortgage loan with the floating interest rate, which will be in effect at the time of repayment, according to the statistical bulletin of the Bank of Greece adjusted with the reference interest rate of the Main Refinancing Operations of the European Central Bank. JUDGED, decided and published in Naoussa on 10 January 2020 at an extraordinary and public hearing, of all the parties and their attorneys.
THE SECRETARY OF THE JUSTICE
THOMAS STEF. HAPPY
LAWYER MDE
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