January 2022

Decision of the Magistrate Court of Drama on Registration in the Solvency Register and the possibility of discharge from debts amounting to 153.000 euros

The decision number 10/2022 of the Magistrate Court of Drama was issued today, based on which - and in conjunction with the order 5/2022 of the bankruptcy rapporteur - the registration of our client's name in the Electronic Solvency Register of article 213 of Law 4738/2020 is ordered. This has as a consequence the possibility of discharge from her debts, amounting to 153.000 €, within three years. 

Our client was not engaged in business activity and under the previous regime she could have been included in the law. 3869/2010, just as she had attempted to do in the past, but unsuccessfully.

Her debts stemmed from loan agreements in which she was a guarantor. The Court held that she was in a general and permanent default of payment of her outstanding financial debts. 

Precisely because its unencumbered assets (e.g. a mortgage) were considered to be small and made up of illiquid assets, the Court did not declare bankruptcy, since the costs of the bankruptcy proceedings could not be covered (e.g. the necessary service of documents, the fees of the trustee, etc.). Therefore, it was ordered to enter its name in the Electronic Solvency Register (ESR) so that after three years it could be discharged from all its debts. 

This is one of the first decisions on small-scale bankruptcy applications ("small-scale bankruptcies") under the new Law 4738/2020. Especially in the case of natural persons - as in this case - it will be a small-scale bankruptcy if the value of the debtor's assets does not exceed the amount of 350,000 euros. As regards the real estate of the person, the value is calculated at ENFIA values and if there is no ENFIA value (e.g. land outside the project), the objective values are taken into account.

For more in relation to the bankruptcy discharge and the "second chance" through the new bankruptcy law see here.