Romania's controversial debt discharge law used only by 7,300 banking clients in one year

Romania’s controversial debt discharge law used only by 7,300 banking clients in one year

One year since the controversial debt discharge law has been enforced in Romania, it has been used by 7,300 debtors that decided to give up their homes in order to get rid of the repayment of bank loans.

Although the initiator of the bill, liberal MP Daniel Zamfir, claimed that there 800,000 families that were struggling to repay their bank loans and that such a law would help them, few debtors opted for this procedure.

According to data published by HotNews.ro, which come from the National Bank of Romania (BNR), there were 7,328 notifications based on the debt discharge law as of May 2. There were 25 banks that were notified, and close to 5,000 of these notifications have been challenged in court.

Out of the total number of notifications 2,449 were for debts of three months. There were 2,400 notifications from people that paid their bank installments on time or had delays of less than 10 days.

More than 3,600 notifications were made for loans taken out in euros, while debtors in Swiss francs had little over 3,000 notifications. Close to 547 notifications were made for loans in the local currency.

Close to half of the notifications were made for loans granted in 2008, which was the last year before the start of the financial crisis.

The banks have challenged the law at the Constitutional Court. Last autumn, the judges ruled out that the debt discharge law is partially unconstitutional. Another controversial draft bill, for the reconversion of loans taken in Swiss francs at the historic exchange rate, was declared unconstitutional.