Financial and banking measures the extend the facilities granted to debtors
1. AN EXPECTED INTERVENTION OF THE GOVERNMENT
As expected, given the prolongation of the state of alert within the territory of Romania and the continuation of the related measures and restrictions, the Romanian Government
adopted a series of measures intended to further support debtors in distress.
In this regard, the Government adopted Emergency Ordinance no. 227 of 30 December 2020, published in the Official Gazette Part I, no. 1331 of 31 December 2020 (“GEO 227/2020”) amending and supplementing Emergency Ordinance no. 37 on granting certain facilities for loans granted by credit institutions and non-banking financial institutions to certain categories of debtors (“GEO 37/2020”).
Until the approval of GEO 227/2020 on December 2020, a number of 558,000 debtors have benefited from legislative and private moratoria, accounting for 14.7% of the total loans granted by the banking industry. GEO 227/2020 entered into force on 1 January 2021.
2. MAIN AMENDMENTS TO GEO 37/2020
GEO 227/2020 expressly provides that the obligations to pay the due installments related to loans granted by creditors until 30 March 2020 are subject to postponement, at the request of the debtor, for a period between minimum one month and maximum nine months.
The new amendments extend and clarify the categories of debtors that may benefit from the moratorium:
Categories of debtors, maximum suspension period and loan-related requirements
(i) debtors who were granted the suspension of the payment obligations until 15 June 2020,
(ii) debtors who benefitted from the application of a non-legislative moratorium.
The debtors provided under items (i) and (ii) above, including those falling under both cases, may benefit from the postponement only provided that the maximum period of suspension (which includes the previous period of suspension) does not exceed the 9-month period, on a cumulative basis (irrespective of the type of suspension – on a legislative or non-legislative moratorium basis).
(iii) debtors who did not apply for the suspension until 15 June 2020, for loans granted until 30 March 2020.
It sets forth that the above debtors may benefit from facilities if they have a loan agreement which has not fallen due and which has not been accelerated by the creditor, on and including 31 December.
Furthermore, the above-mentioned qualifying debtors are conditioned not to have any outstanding payments on the date of applying for the suspension.
New deadline to submit the application for suspension:
In order to benefit from the suspension of loan repayment, a debtor should submit an application to its creditor, by mail or electronic mail, to the contact details indicated in the loan agreement or through another remote communication channel provided by the creditor by 15 March 2021.
The creditor has the obligation to analyze and issue a decision by 31 March 2021.
Conditions applicable to debtors which are not natural persons:
GEO 227/2020 sets out the special conditions applicable to all debtors which are not natural persons. More precisely, such debtors qualify if:
(i) they submit the affidavit on the decrease in their monthly average income or proceeds of at least 25% in the last three months before applying for the suspension of the payment obligations compared to the similar period in 2019/2020, as applicable.
(ii) they are not insolvent on the date of applying for the suspension of loan repayment, according to the information available on the website of the National Trade Registry Office.
3. ADDITIONAL PROVISIONS
GEO 227/2020 brings clarifications as regards the suspension of the payment obligations related to mortgage loans for which the application for suspension of the payment obligations was submitted until 15 June 2020, according to the law.
Thus, if the requested suspension has an end time limit of the postponement period before the entry into force of GEO 227/2020, the supplemental suspension of the payment obligations up to maximum 9 months is applicable by cumulating the receivable/remaining receivable related to the interests calculated in the first period suspended according to GEO 37/2020 to the receivable corresponding to the interests calculated for the second period suspended under GEO 227/2020.
The interest for the resulting receivable is 0% and the payment of such receivable by the debtor shall be made staggered over 60 equal monthly installments starting with the month immediately following the end of the second period of postponement.
The payment of the interest calculated as indicated above, related to mortgage loans taken by individual debtors, is 100% secured by the Romanian State, through the Ministry of Finance.
Within 10 days from publication of GEO 227/2020, the Ministry of Finance will issue
the rules for the application of this ordinance.
*N O T I C E: This Legal Alert is only provided for information purposes and is not intended to be deemed as a legal opinion; therefore, no decision can be taken based on this Legal Alert. An opinion may be provided only after analyzing the particular facts and circumstances, as well as in consideration of the issues which cannot be approached in this document. BirișGoran SPARL has copyright over this document ©2021. All rights reserved. Any distribution or reproduction of any part of or of the entire document is
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