Over-indebtedness crisis: new procedures

Legalmente - 7 April

Legislative Decree no. 14 of 2019, approved at the beginning of the FY, has reformed the bankruptcy law applied in case of business crisis, as well as some procedures provided under law no. 3 of 2012, concerning the over-indebtedness of consumers, families and all those subjects classified as “non-fallible” (i.e. that cannot go bankrupt) that are in a persistent instability and are overburdened by debts that they cannot repay.

The main new provisions

Among the most important updates, there is the provision of the so-called “familiar procedures”, concerning those cases in which more cohabitants are over-indebted or in which over-indebtedness is due to a common reason and can be therefore solved jointly.

Also, it is now provided that a creditable individual who is not able to guarantee any direct or indirect profit, both now and in the future, can get free of debts, though only once. This is the so-called ‘fresh start’.

A further update provides that debt deriving from a mortgage loan for the purchase of the main house can be excluded, for repayment purposes, from the total debt due by the over-indebted individual, therefore ensuring an easier access to the procedures provided for over-indebted consumers and the possibility to safeguard their house.

Lastly, the new provisions introduced an extension of the creditors’ responsibility: those who are responsible for having worsened the situation of the over-indebted individual are subject to penalties and cannot object or complain, even if they dissent, except in case of malicious behaviour by the debtor.