Below is a description of a regulation of a loan amounting to 100,000 euro between a borrower and DoValueGreece, which is now managing most of the loans that were provided by Eurobank.

The loan was received by the borrower and her husband, who died in a plane crash a few years ago. She has three children, two of which are studying in different cities, away from their main residence, while the third one is a minor. The monthly income of the borrower is high compared to today’s standards, approximately 2,500 euro per month, yet we proved to the managing company that after the taxes and expenses, the remaining amount for the payment of her debt is extremely low.

The regulation request was submitted through the borrower’s lawyer, Mrs. Anna Korsanou. The request was processed, a procedure that lasted several months, and then the day of the negotiation was set. It shall be noted that the entire negotiation process adopted the form of a mediation; however the bank, on the grounds of the pandemic, requested that the mediation be made online despite our objections, since we considered that it could be made in person by following all the appropriate safety measures, namely keeping distances, wearing masks, airing the room, prior disinfection of the mediation area and although the mediator had already undergone the COVID test without having any symptoms just to prove that she is healthy, the company insisted on online mediation, otherwise the mediation would not have taken place.

Therefore, everyone was forced to participate in the online mediation as the borrower wanted and needed to regulate her loan in order to protect her residence. The process was performed through a specific teleconferencing program which presented difficulties and obstructions in the connection and communication, which was yet again requested by the bank considering all other programs, such as zoom, as unsafe.

The borrower maintained a serious and respectable attitude; she wished for a low installment, extension of the loan repayment, write off of interests and 50% remission of the capital. Two of her four requests were met. This means that a low installment rare which was very close to the amount she wished for was achieved. An extension of the loan repayment was also achieved; however for this case no writing off of interest or capital remission took place.

In general, a lot of parameters are taken into account for a loan regulation. The amount of the loan, the borrower’s income, the borrower’s expenses, his/ her immovable property and its value, the collateral securities. Generally, these circumstances, namely the economic conditions of each period and time are fundamental. Nowadays, the legal arsenal of borrowers has weakened, as by the end of 2020 Katseli’s law, which was the main way to write off large amount of debts, will be repealed and a large number of pending cases will be rejected. The new law on bankruptcy to be voted will write off debts with the simultaneous liquidation of assets, while the protection of the main residence will only apply to vulnerable borrowers having specific income and meeting specific conditions

The regulations with the banks and managing companies have such a balance of powers that the bank has more power than the borrower. In any case, the borrowers shall form realistic expectations. In the mediations I have undertaken there are cases where a write off was achieved and others that it was not. All the regulations achieved, at least in the ones I participated, offer a viable solution to the borrower, which allows him/ her to keep his/ her property, but not a happy solution, since all borrowers wish for the greatest possible write off of their loan. Mediation is a weighting of interests and alternatives that each part has at its disposal.

For more information on the extra-judicial regulations and mediation you can contact my office by booking an appointment.

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