The Ministry of Economy and Finance offers an upgraded solution to debt settlement through the updated platform of the Extra-Judicial Mechanism
. This platform incorporates the latest legislative changes and enables debtors to settle their debts in a more simplified and automated way, avoiding complicated and time-consuming court procedures. Key changes incorporated into the platform include the application of an additional “haircut” of up to 28% for loans secured by collateral, thus improving debt restructuring prospects for debtors. This is done through automated proposals generated by the platform’s algorithm and voted on by creditors, ensuring a faster and fairer process. Another important objective of the upgrades is to protect vulnerable debtors, with the new arrangements seeking to improve the functioning of the Mechanism for the benefit of all debtors. Debt restructuring proposals for vulnerable debtors are mandatorily accepted by banks, servicers and the State, with the possibility of rejection by the borrower if they are not satisfied, while financial institutions will have recourse to the courts to challenge the proposal in case of disagreement. It also adds a new dimension to the arrangements, with the fixed interest rate for all debt arrangements set at 3% for the first three years, thus providing greater predictability and stability for debtors. The upgraded system of the
The upgradedOut-of-Court Mechanism represents a significant improvement in debt management and settlement, offering a holistic and sustainable solution to achieve financial stability and recovery for individuals and legal entities.
At CPA Auditors & Consultants, we aim to financially strengthen your business by providing cohesive advisory services for debt consolidation and debt settlement.
Find out more about how we can support you, visit the CPA website for further information and contact.
. This platform incorporates the latest legislative changes and enables debtors to settle their debts in a more simplified and automated way, avoiding complicated and time-consuming court procedures. Key changes incorporated into the platform include the application of an additional “haircut” of up to 28% for loans secured by collateral, thus improving debt restructuring prospects for debtors. This is done through automated proposals generated by the platform’s algorithm and voted on by creditors, ensuring a faster and fairer process. Another important objective of the upgrades is to protect vulnerable debtors, with the new arrangements seeking to improve the functioning of the Mechanism for the benefit of all debtors. Debt restructuring proposals for vulnerable debtors are mandatorily accepted by banks, servicers and the State, with the possibility of rejection by the borrower if they are not satisfied, while financial institutions will have recourse to the courts to challenge the proposal in case of disagreement. It also adds a new dimension to the arrangements, with the fixed interest rate for all debt arrangements set at 3% for the first three years, thus providing greater predictability and stability for debtors. The upgraded system of the
The upgradedOut-of-Court Mechanism represents a significant improvement in debt management and settlement, offering a holistic and sustainable solution to achieve financial stability and recovery for individuals and legal entities.
At CPA Auditors & Consultants, we aim to financially strengthen your business by providing cohesive advisory services for debt consolidation and debt settlement.
Find out more about how we can support you, visit the CPA website for further information and contact.
