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					Item   Question                           Austria

       Could you please send us
 1     material concerning the
       following Legislation?

       Consumer Credit Legislation

       Consumer Bankruptcy
       Legislation

       Any other Legislation relevant
       to the below mentioned
       questions#




       We prefer material in electronic
 1     form. If you have a foreign
       language version please
       provide.#Otherwise please
       indicate where the material is
       available on the net. In this
       case please complete the net-
       address in the right column.
    -#Could you please also
2   provide a list of the relevant
    literature for your country?




    -#Are there any research
3                                    yes#"Excluded from the debt adjustment procedure", AK
    studies, reports or evaluations Wien/ASB 1998#Please provide a            copy or
    of the above mentioned fields
                                     indicate where the material is
    of law within the last 5 years?#
                                     available:#see enclosed AK_ASB_Studie 1998.pdf#
    Which department of your
4   government is primarily in
                                   Federal Minstry of Justice

    charge of consumer
    overindebtedness?#




    Does a general consumer
5   protection law exist in your
                                   yes; Consumer Protection Law, amended
                                   several times, with regulations for contracts
    country?                       between entrepreneurs and consumers and
                                   federation complaints.#
    Is consumer credit regulated
6   under this general consumer
                                   yes; #Partly, i.e. #§ 6 general inadmissible
                                   parts in contracts with consumers, in particular
    protection law?                Z 13 prohibition of interest on arrears of more
                                   than 5% over agreed upon interest rates#§ 12
                                   premature repayment for consumer credits#§
                                   25 obligations of notification to spouses in credit
                                   contracts#§ 25b, c credit commitments of
                                   consumers and joint debtor liability#§ 25d
                                   moderation rights for judges##




    Is consumer credit regulated
7   under a special law?
                                   yes; #Bankwesengesetz (Banking Law),
                                   regulations for consumer credit agreements and
                                   consumer current account contracts in §§ the
                                   33 ff.#
    Are there maximum interest
8   rates in credit contracts?
                                  no#There is a Usury Law in Austria (see
                                  question 26, enclosed Wuchergesetz.pdf), the
                                  Austrian justice however is extremely reserved
                                  concerning usury credit interests, so there´s no
    Present average Interesst
    rates?                        relevant iurisdiction to usury interests.#



                                  approx. 6,5% in accordance with a price
                                  comparison of the Arbeiterkammer OÖ in March
                                  03 (see enclosed Kreditvergleich März03
                                  PKW.pdf)#




    What is the present maximum
9   interest rate for consumer
    credit?#
     What is the present maximum
10   interest rate for mortgage
                                        approx. 6% in accordance with a price
                                        comparison of the Arbeiterkammer OÖ in March
     loans?#                            03 (see enclosed Kreditvergleich März03
                                        Wohnung.pdf)#




     What is the present maximum
11   interest rate for small business
                                        approx. 6% as per telephone information of the
                                        Wirtschaftskammer OÖ on March 24th 2003.#
     credit?#




     Who determines this (these)
12   interest rate(s)?
                                        The credit interests are subject to the free
                                        contract design between entrepreneurs and
                                        consumers and are regulated by supply and
                                        demand on the market.#
     What are the consequences if
13   the credit contract proves a
                                    #None.#Only if an Interest Indexation Clause
                                    was agreed upon. In that case there exists a
     higher interest rate?          claim for restitution for the consumers, if
                                    interest rate lowerings were not bound to an
                                    objective yardstick and were not passed on.#




     Which cost elements have to be #The consumer credit agreement has to contain
14   disclosed?                     at least the following cost data in accordance
                                    with § 33 Banking Law (see enclosed
                                    Bankwesengesetz.pdf):
                                    a) Credit costs of - payments of public charges
                                    and #- payments of insurance or collateral, as
                                    far as they secure the repayment of an amount
                                    that exceeds the total amount of the credit for
                                    the credit institute in case of death,
                                    disablement, illness or unemployment of the
                                    consumer and this payment is not compellingly
                                    a condition for the granting of the credit by the
                                    credit institute. #b) Credit costs, which arise
                                    for the consumer through: #- default of his
                                    obligations, #- backpay transfer of the
                                    installments for the credit or account, if these
                                    costs are not higher than those for consumer
                                    current accounts.#
     How is this disclosure
15   achieved?
                                       The requirements are described exactly in § 33
                                       Banking Law. The consumer credit agreement
                                       has to contain at least the following data: #1.
     Please describe more detailed,
                                       In each case in form of absolute amounts #a)
     i.e. forms, fixed wording,
     prescription of a payment plan    the total cost in accordance with Exp. 7, #b)
     with dates and instalments.#      the sums of the cost elements that are
                                       excluded in Exp.7 Number 2 lit. c and d and #c)
                                       the sum of the amounts which can be indicated
                                       in accordance with lit. a and b, #2. the effective
                                       annual interest rate in Arabic numerals in
                                       remarkable place of the contract, #3. a
                                       reference to the notice of the valid fictitious
                                       annual interest rate for the default of payment
                                       in accordance with § 35 Exp. 1 Number 1 lit. d,
                                       #4. a possible interest-indexation clause, which
                                       has to be bound to oblective yrdsticks (§ 6
                                       Exp.Paragraph 1 Number 5 KSchG remains
                                       unaffected) and #5. the number, the height
                                       and the maturity times of the installments of
                                       the total cost; #6. a reference to the savings
                                       component, if for the purpose of the credit
                                       provision of security with the consumer credit
                                       agreement an experiencing insurance or a life
                                       insurance are to be locked, as well as a
                                       reference if the insured sum is higher than the
     Does your country have more
16   informational duties than
                                       #None, except those mentioned in the
                                       Consumer Protection Law (see question 6
     prescribed in Article 4 of the EU above, especially § 25a KSchG).#
     Directive on Consumer Credit
     (87/102/EWG) especially
     concerning warnings?#
     Does the creditor have to
17   investigate the debtor’s
                                        There is no legal obligation for the creditor; in
                                        practice both income and amount of
     income?                            indebtedness are queried before granting of
                                        credit. Incorrect data of the debtors cause
     i.e.: income to debt ratios etc.?#
                                        disadvantages in debt adjustment procedures
                                        (§ 210 Abs.1 Z 4 KO).




     Is there any liability towards
18   other creditors or the debtor for
                                       #No.#

     improvident credit extension?#
     Do you have a central credit
19   reference system in your
                                         yes; #In Austria the Kreditschutzverband von
                                         1870 (KSV) - a creditor protection society -
     country?                            runs the so-called "Consumer Credit Evidence"
                                         (KKE). in this database all information about
                                         granted credits can be stored and downloaded
                                         by the banks. There is no obligation for the
                                         banks to upload the information.#




     How is this central credit
20   reference system organised?
                                         The credit evidence is organized privately. With
                                         the granting of the credit the consumers sign
                                         an explanation, which reads about as follows:
     i.e.: Is it privately or publicly
                                         #"I agree that on the occasion of my request
     organised?#
                                         for the credit or the granting of the credit my
                                         data may be sent to the Consumer Credit
                                         Evidence and the Warning List run by the
                                         Kreditschutzverband von 1870 for the purpose
                                         of the unification and passing on of these data
                                         to participating companies for keeping their
                                         interests of creditor protection to be conveyed
                                         and you may inform the aforementioned
                                         partner companies about the result of the
                                         examination."
     How does this central credit
21   reference system work?




21   i#i.e.: Only default or also   The granting of credit is bound to the
     positive registration?#        agreement of the customers to the forwarding
                                    of their data to the central credit evidence.
                                    Creditors are liable to pay the costs for inquiries
                                    the the KKE. #The KKE works on a system of
                                    positive registration. That means that already
                                    credit requests and grants are stored. #
     Does the central credit
22   reference system create special
                                        The organization of the clause - hidden in the
                                        General Trading Consitutions is frequently
     legal problems for the debtor?     intransparent. The customers do not know who
                                        runs this "central credit evidence" and therefore
     i.e.: improper use of data
                                        cannot efficiently make use of their rights to
                                        rectification and deletion of wrong information.#




     Are there any preconditions for
23   the co-liability of spouses or
                                        In accordance with § 25a KSchG banks have to
                                        instruct spouses who together sign a credit as
     children in credit contracts and   consumers - may the liability of one of them
     other debts?
                                        only be a bailsman - or a spouse, who signs the
     i.e.: information, warning,        liability for an existing credit of the other one as
     minimum age, own facility for      a consumer on a separate document about #1.
     repayment, own interest in the     that, if the spouses are liable solidarily the
     credit etc.?#                      creditor can order the full sum of the debt in
                                        arbitrary sequence of all of them without
                                        consideration, who got the credit sum, #2. that
                                        the liability remains upright upon divorce,#3.
                                        that only the court in the case of adivorce can
                                        limit the liability of one of the spouses in
                                        accordance with § 98 Marriage Law to a loss
                                        endorsement, which has to be requested within
                                        a year after the divorce is res judicata. #There
                                        are no more protection regulations for wives.
                                        #Children, who are not yet of age, may be
                                        obligated only in the context of their limited
                                        legal competency in Private Law. Since
                                        consumer credit agreements usually do not
                                        belong to the "usually business concern" of
                                        persons under age, such are subject to
                                        approval by the court (§ 154 Exp. 3 ABGB:
                                        Representative actions and consent of parents
                                        in financial affairs require the agreement of the
     What are the consequences if
24   these conditions are not met?
                                         The violation of the regulations in the Banking
                                         Law are sanctionless to a large extent. The
                                         violation of the regulations of the KSchG may
     i.e.: void, pay of damages,
                                         result in a fine for companies up to EUR 1,450,-
     reduction of the debt?#
                                         , the contract remains valid. #Violation of the
                                         legal competency in Private Law means nullity
                                         of such a contract.#




     Have problems connected with
25   co-liability and personal
                                         Only to a small extent, especially still no
                                         regulations with effective sanctions such as
     guarantees for loans by family      nullity of such contracts could be achieved (See
     members, relatives etc.
                                         for example question 6, § 25 b, c, d KSchG,
     received any political attention?
                                         which have no substantial relevance in practice
                                         so far).#
     Do you have a maximum
26   default interest rate?
                                         yes; #Only relative ones regarding to the
                                         agreed upon interest rates (see below question
                                         27). There is a usury law, which may result in
                                         nullity of payments under certain strict
                                         conditions, however does not indicate a
                                         maximum interest rate. In practice the Usury
                                         Law (see enclosed Wuchergesetz.pdf) is of no
                                         meaning.#




27   Are there restrictions concerning   #The interests on arrears may not be more
     the repayment of debts in           than 5% over the agreed upon interest rates
     default? #i#i.e. anatocism,         (see § 6 Exp. 1 Number 13 KSchG).#
     compounding of payments to the
     principal first, separate account
     for default interest?
     What are the preconditions of a In § 13 KSchG the so-called date loss is
28   creditor for early termination of regulated. A creditor may require a premature
     a consumer credit contract?       fulfilment only if he already fulfilled his
                                      obligations, the consumer is in default for at
     i.e.: number of instalments due,
     amount due, time elapsed         least six weeks and the creditor reminded the
     between default and              consumer unsuccessfully under menace of the
     cancellation, restricted to      date loss and under setting a deadline of at
     certain other reasons?           least two weeks.#




     What steps has the creditor to
29                                    #See question 28#Reminder under setting a
     take before early termination of two-week respite.#
     the consumer credit contract?#
     Are intermediaries regulated?
30                                   yes; #Regulations exist in Part 4
                                     (Personalkreditvermittler) in the Broker Law in
     Is their role regulated under   §§ 33ff (see enclosed Maklergesetz.pdf).
     general or special law?#Does
                                     #Regulated are: #Minimum contents of the
     this law regulate maximum
     fees, fees in case of           contract#Duration of the contract #Collection
     unsuccessful intermediation     activity of the intermediary#Inadmissible
     etc.?#                          remuneration #Duties of the mediator to supply
                                     information#These regulations are however
                                     toothless, since no sanctions are written in the
                                     law. #In the "regulation against the
                                     exploitation of credit-requesters from 1933"
                                     remunerations are held for excessively, if for
                                     the mediation the intermediary gets more than
                                     2% of the loan amount. The remunertions can
                                     be reclaimed in § 4 so far as it is excessiv in
                                     relation to the achievement of the creditor or
                                     the intermediary (see enclosed
                                     Kreditvermittler.pdf).#




     Is there an effective
31   supervision of skills and
                                     #The practice of the trade of the personal loan
                                     intermediary is a trade, for which a certificate
     practice of intermediaries?     of competency is necessary in accordance to
                                     the regulation for the mediation of personal
                                     loans and fortune consultation (see enclosed
                                     Kreditvermittlerverordnung.pdf).#
     Is there a special liability for   no##
32   intermediaries in credit
     transactions?




     Is there any specific regulation
33   for other forms of consumer
                                        yes; #In § 43 Banking Law there are minimum
                                        contents for consumer current account
     credit?                            contracts, in the Consumer Credit Regulation
                                        there are minimum contents for financing
     Examples for other forms of
     consumer credit: overdraft,        leasing contracts (see enclosed
     payment facilities, mail order     VerbaucherkreditVerordnung.pdf).#
     credit etc.
     Is there a general provision in    no
34   your law used by the courts
     actively to cope with problems
     of overindebtedness through in
     credit transaction?

     i.e.: good morals; social force
     majeure, bona fide?




     Is there any specific regulation   no##
35   to protect consumers against
     cutting-off-policies by utility
     companies?

     Utility companies = energy
     supply companies, gas or water
     or telecommunication supply
     companies#
     Is there any specific regulation
36   to protect consumers against
                                        yes; #Evacuation can be obtained only after
                                        judicial asserting based on a court title. #The
     eviction by landlords?             judicial termination of rent contracts (also due
                                        to payment in arrear) is regulated in the Rental
                                        Law (Mietrechtsgesetz): #§ 33. (1) Rent
                                        contracts can be quit only judicially. The
                                        landlord has to state the reasons for
                                        termination briefly in the termination; he
                                        cannot make valid any longer other reasons for
                                        termination in this procedure. If objections
                                        against the termination are raised, the landlord
                                        has to prove that the reasons for termination
                                        made validly by him are given. Against missing
                                        the period for the mounting of objections the re-
                                        instatement into previous conditions according
                                        to the regulations §§ 146 ff. ZPO is
                                        permissible. #(2) If a tenant, who for the
                                        reason of § 30 Exp. 2 Number 1 is quit and who
                                        for the payment in arrear meets no rough
                                        blame, pays before conclusion of the decision of
                                        the court of first instance the owed amount of
                                        the directly preceding negotiation, the
                                        termination is to waive; the tenant has to pay
                                        however the costs to the landlord, as far as
                                        without its payment a cost obligation to
         Are there any provisions
                                        indemnify would have met him. If the amount
                                        no##
37   for relief
     concerning#taxes#public
     fees#fines?
     Is assignment of wages
38   allowed under your law?
                                        yes; #Assignment of wages for not yet due
                                        demands in consumer contracts are forbidden
                                        in the Consumer Protection Law: #§ 12. (1)
                                        KSchG: Wages or salaries of consumers may
                                        not be assigned to entrepreneurs for security or
                                        for satisfaction of not yet due demands. #In
                                        practice this prohibition in KSchG is gone
                                        around. Instead of assignment of wages (in
                                        which the bank steps into the salary claim right
                                        of the debtor against his employer) the banks
                                        get from the debtors contract attachments of
                                        the wages (here the bank does not own the
                                        claim for wage, but the wage claim is
                                        contractually attached to the creditor as
                                        security of the credit). #Employers are allowed
                                        to make payments due to a contractual
                                        attachment right only if the creditor has a
                                        requirement on utilization and this the
                                        employer were indicated (§ 300a EO).#




     Are there any specific             no
39   regulations or judgements to
     protect the debtor or his family
     against the enforcement of
     assignment of wages?
     Is private debt collection
40   regulated under your law?
                                        yes; #The conditions for entrance are regulated
                                        in the Collection Agency Regulation of
                                        28.01.2003 (see enclosed
     i.e.: Is private debt collection
                                        InkassoinstituteVerordnung.pdf).#
     regulated by statute, licence,
     codes of practice, common
     practice (commercial
     reputation) or is it not
     regulated at all?




     Is there a maximum to the
41   collection cost?
                                        #Yes, there is a regulation of the Federal
                                        Minister for Economic Affairs from the year
                                        1996, adapted to Euro Conversion in the year
                                        2001, in which maximum costs for debt
                                        collection are fixed (see enclosed
                                        InassoinstituteHöchstsätze.pdf).#
     Is private debt collection
42   otherwise restricted?
                                     #No.#




     Are there any restrictions on
43   wage garnishments?#
                                     #Wage garnishments are regulated in §§ the
                                     290 ff. of the Execution Law (see enclosed
                                     Exekutionsordnung.pdf). A subsistence
                                     minumum has to remain to the debtors, which
                                     consists of a basic amount and amounts of
                                     increase in dependence of the obligations of the
                                     debtor to pay alimony. The computation of the
                                     subsistence level is to be accomplished by the
                                     employers of the debtors. This load to the
                                     employers impairs the security of the jobs
                                     and/or the chances on beginning of work of
                                     debtors. The subsistence minima are published
                                     yearly in tables in a regulation of the Federal
                                     Minister of Justice (see enclosed
                                     ExistenzminimumVerordnung03.pdf).#
     Are there any exemptions for
44   private households etc.?
                                      See above remarks to wage garnishments,
                                      examples can be found in the enclosed table in
                                      the "Subsistence Minimum Regulation 2003".
     i.e.: exemption from execution
                                      This regulation is adapted to the inflation rate
     etc.#
                                      (compensatory allowance basic rate) annually.
                                      #Seizing of assets is regulated in §§ 249 ff.
                                      Execution Law. In §§ 250 f EO the unseizable
                                      articles are aforementioned. Unseizable are in
                                      particular "things for the personal use or the
                                      household of the debtors, as far as they are
                                      necessary to them for a modest living." (see
                                      enclosed Exekutionsordnung.pdf).#




     Are there any recent revisions
45   of your exemption laws?
                                      #No.#
     Are there specific regulations   yes#What is the legislation in your country that
46   for consumer bankruptcy?         applies to consumer bankruptcy? Please give the
                                      name of the law:#The legal regulations can be
                                      found in the Bankruptcy Code in the §§ 181 ff
                                      (Third part: Special Regualtions for Natural
                                      Persons, First Main Piece: Bankruptcy and Debt
                                      Adjustment Procedures, see enclosed
                                      KonkursordnungPrivatkonkurs pdf).#Effective
                                      date of this law: 1.1.1995#




     Is this regulation or is a new   no##
47   regulation for consumer
     bankruptcy under discussion?

     Are there any proposals to
     reform this regulation or to
     introduce a consumer
     bankruptcy law?
48   What is the legal                   Insolvency is defined as follows in the
     definition of consumer              Bankruptcy Code: #§ 66. (1) The opening of
     bankruptcy in your                  the bankruptcy presupposes that the debtor is
     country?#                           insolvent. #(2) Insolvency is to be accepted in
                                         particular if the debtor stops his payments.
                                         #(3) Insolvency does not presuppose that
                                         creditors crush. The circumstance that the
                                         debtor satisfied demands of individual creditors
                                         totally or partly or still can satisfy, does not
                                         justify the acceptance for itself alone that he is
                                         solvent.




     Is “fresh start” an explicit goal   Please explain the philosophy of your bankruptcy
49   in the consumer bankruptcy          legislation more detailed:#The Austrian
     law? How is the reality?            bankruptcy model can not be described as a
                                         "fresh start" - model, it more represents the
                                         German "Re-Education-Approach". The
                                         acquisition of discharge of debt in practice
                                         however is made very difficult through:# -
                                         frequent exclusion of debtors from cashless
                                         money transfer, since banks are not willing to
                                         contract for accounts with debtors#- creditors
                                         who did not claim their demands in the court
                                         proceeding but after the proceeding try to
                                         execute their claims#- public proclamation of
                                         the insolvency procedure and thus taking place
                                         "Stigmatisierung" #- debts, which are excluded
                                         from discharge, in particular fines, demands
                                         from bad actions.#
     Do you have a mandatory pre-   yes; please describe this procedure more detailed:
50   court procedure?               #If the prospective law costs are not covered
                                    the debtors have to certify that a extrajudical
                                    agreement was tried and failed and/or was
                                    doomed a priori to failure (§ 183 exp. 2 KO). In
                                    this regard pre-court procedure (offer of an
                                    extrajudical agreement) is mandatory.#




     Do you have a voluntary pre-
51   court procedure?
                                    no#A pre-court procedure is not mandatory if#-
                                    the procedure costs are already covered with
                                    the bankruptcy petition or #- a extrajudical
                                    agreement had from the beginning been
                                    doomed to failure, e.g. due to the high number
                                    of creditors (starting from approx. 10
                                    creditors). #In all other cases the debtors have
                                    to certify the fact that a extrajudical agreement
                                    was tried and failed (§ 183 KO).#




     What body is responsible for
52   the mandatory pre-court
                                    The extrajudical agreement can be run by the
                                    debtors themselves, in the Bankruptcy Code
     procedure?#                    however there is the regulation that an
                                    extrajudical agreement, "especially by a
                                    privileged debt advice company or a privileged
                                    creditor protection society" is to be
                                    accomplished. #The evaluation of the
                                    adequance of the attempt in the judicial debt
                                    adjustment procedure is incumbent on the
                                    responsible district court.#
     Who bears the costs for the
53   mandatory pre-court procedure?
                                    The debtors.


     i.e.: the debtor, the state?




     What is the success rate for pre- Approx. a third of all extrajudical agreements
54   court procedures? Please give     are accepted by the creditors (see enclosed
     figures.#                         Grafik zu Pkt. 54.pdf, Source: Bankruptcy and
                                      Threshold Data Report of the ASB for 2002).#




     What is the minimum and
55   maximum duration of the
                                      No periods are prescribed, in the forms for
                                      bankruptcy of the Federal Ministry of Justice
     mandatory pre-court              there´s a statement period of 6 weeks to
     procedure?#
                                      extrajudical agreement proposals from debtors
                                      to creditors.#
     Are there special problems with Please explain in detail and give examples:#-
56   the mandatory pre-court         Creditors do not react to extrajudical
     procudure?#                     agreement offers from debtors#- in demand
                                      lists of creditors unauthorized, to high demands
                                      are made validly (demands and interests barred
                                      by statute of limitations or the like), only in the
                                      following judicial procedures they then often
                                      correct these registrations #- assignment of
                                      wages and contractual attachment of wages
                                      make extrajudical agreements more difficult #-
                                      there is no seizing protection during the balance
                                      phase, in addition no requirement on interests
                                      stop #- creditors and courts appoint themselves
                                      to inadequate extrajudical agreements in order
                                      to prevent or retard procedure openings#




     Please describe briefly your
57   court run consumer bankruptcy
                                      In the judicial debt adjustment procedure
                                      debtor companies have to explain formally their
     system. #                        insolvency and the court opens the bankruptcy
                                      over the assets of the debtor. #After opening 2
                                      possibilities of successfully terminating the
                                      procedure exitst for debtors: #1.) Acceptance
                                      of a judicial payment plan or compulsory
                                      settlement by a creditor majority. #The
                                      payment plan has to contain a ratio to the
                                      bankrupt's creditors, that correspond to the
                                      income situation of the next 5 years. This offer
                                      is to be accepted during a hearing before court
                                      of a majority of the present bankrupt's
                                      creditors. #2.) Going through a probationary
                                      period with discharge of debts. This procedure
                                      comes into force if the offered payment plan did
                                      not find creditor majority and if no introduction
                                      obstacles do exist. #A trustee is appointed who
                                      during the period of 7 years administers the
                                      seizable part of the income of the debtor. These
                                      amounts are passed on by the trustee to the
                                      creditors. During the probationary period
                                      obligations are imposed upon the debtor. After
                                      the probationary period of 7 years it is
                                      examined by the court whether the creditors
                                      got at least 10% of the original demands. If this
     If your system differentiates
58   between a pre-court and a
                                       For an extrajudicial agreement the agreement
                                       of all creditors is necessary, in the payment
     court run system please           plan in a judicial procedure it is sufficient that
     describe the main differences
                                       the majority of the creditors agree. #In the
     between both procedures.#
                                       judicial procedure bankrupt's creditors have to
                                       announce the demands to the procedure, these
                                       demands concerning height and legal standard
                                       are examined, in the procedure out of court this
                                       examination should take place by the debtors
                                       themselves.#




     Who can be appointed as a
59   trustee in the court-run
                                       Debtors can have any person as representative,
                                       there´s no obligatin for a lawyer. In practice
     system?                           debtors are represented by debt advice
                                       companies or attorneys. The court can also
     i.e.: lawyer, social worker, debt
     adviser?#                         appoint a "trustee in bankrupty" in complex
                                       problem situations who supports the court
                                       during the procedure.




     Does your law offer a discharge
60   at the end of the procedure?
                                       #In principle the debtors attain discharge of
                                       debts in the judicial debt adjustment procedure.
     Does the discharge also apply     In the payment plan and/or compulsory
     to co-debtors?
                                       settlement with fulfilment of the ratio accepted
                                       by the creditors, in the probationary period with
                                       judicial resolution. In the probationary period
                                       however fines and demands from bad actions
                                       are excluded from discharge of debts (215 KO).
                                        #The rights of the bankrupt's creditors against
                                       joint debtors and vouch inside the debtors are
                                       not affected by judicial bankruptcy proceedings
                                       (§ 214 exp. 2 KO).#
     Is there any provision in your    no
61   law that forbids discrimination
     of former bankrupts?




     Does the procedure stop all the
62   enforcement activities of all
                                       A judical bankruptcy procedure principally
                                       causes a seizing stop. Special arrangements
     creditors?                        and/or exceptions exist for: #- creditors with
                                       contestation-safe pledge rights at assets of the
     Are there exceptions for
     mortgage lenders, tax officials   debtors (inclusive mortgages), whereby
     etc.?                             contractual attachment rights at the income
                                       expire 2 years after opening (§ § 12, 1à KO) #-
                                       fines are excluded claims in the procedure, i.e.
                                       if fines cannot be paid, spare imprisonment
                                       threatens #- if employers have existing setting
                                       off claims against debtors (e.g. salary
                                       advances), those rights to setting off expire 2
                                       years after opening#- as per iurisdiction social
                                       security institutions arrears can set off against
                                       debtors temporally for an unlimited period #-
                                       maintenance creditors are fully to be staisfied
                                       regarding current maintenance and since
                                       youngest iurisdiction regarding backward
                                       maintenance payments#
     Are there any preconditions to
63   enter the procedure?
                                      Conditions for the opening of a judicial debt
                                      adjustment procedure are according to § 183
                                      KO: #- no entrepeneurs activity #- insolvency
     i.e.: a qualifying amount
                                      #- schedule of property#- submitting of a
     (minimum or maximum
     amount) of debts, good faith,    payment plan offer #- certificate that procedure
     previous bankruptcy filings,     costs are presumably covered #- proof of the
     filing fees etc.?#               failure of a extrajudicial agreement




     How is the actual home (rented
64   or owned) protected?
                                      There is no special protection for property. Rent
                                      contracts of the necessary dwelling are not
                                      impaired by the bankruptcy proceedings, as
     i.e.: no eviction possible,
                                      long as no renting arrears are present.
     mortgage debt reduced to the
     foreclosure price?#
     Which kind of other security
65   does persist?
                                      The seizing regulations of the Execution Law
                                      regarding subsistence minumum and assets do
                                      apply (see in addition above question 43, 44).
     i.e.: reservation of property
     (car), wage assignment,
     guarantees?#




     Which other debts are excluded
66   from discharge?
                                      - maintenance payments #- fines#- demands
                                      from intentionally committed bad actions

     i.e.: taxes, alimonies, fines,
     torts?#




     Which kinds of priority claims
67   do exist?
                                      with exception of the special arrangements for
                                      contractually secured creditors and
                                      maintenance creditors mentioned above, NONE.
     i.e.: taxes, rent, claims from
     necessary living expenses?#
     How much of the debtor’s
68   income is allowed to keep?
                                       The debtors has to remain the subsistence
                                       minumum according to the Execution Law (see
                                       above question 43 and enclosed
     i.e.: percentage of income or
                                       ExistenzminimumVerordnung03.pdf).
     fixed amount?




     Which assets is the debtor
69   allowed to keep?
                                       In accordance with § 5 KO the debtors has to
                                       remain, "what is essential to a modest living."
                                       Thus there is an interpretation clearance, that
     i.e.: defined by their function
                                       again depends on the exemptions from seizure
     for work or enumerated?#
                                       according to the regulations of the Execution
                                       Law (see in addition above question 44 and
                                       enclosed Exekutionsordnung.pdf,
                                       ExistenzminimumVerordnung03.pdf).




     What is the minimum and the
70   maximum duration of the
                                       Minimum duration: #Immediate payment of a
                                       unique ratio#Maximum duration: #7 years plus
     repayment plan within the         extension by max. 3 years#Exceptions: #If a
     court run system?
                                       payment plan or a compulsory settlement is
                                       achieved, discharge of debts is reached with
                                       immediate payment of the accepted ratio. #In
                                       the probationary period the fundamental
                                       procedure duration is 7 years, after at least 3
                                       years discharge can be given if the creditors
                                       received a ratio of 50%. With a ratio of under
                                       10% after 7 years running time, the
                                       probationary period can be extended under
                                       certain conditions again for 3 years (§ 213
                                       KO).#
     What are the fees for the
71   trustee? Please give figures.#
                                      The costs of the trustee in the probationary
                                      period are in accordance with § 204 KO 4% of
                                      the first 22,000 euro of the amounts which are
                                      transferred to the trustee because of the
                                      asignment, 2% from the excess amount to
                                      100.000 euro and 1% of the amount going
                                      beyond it, at least however 10 euro monthly, in
                                      each case plus Value Added Tax. #For the
                                      trustee in the bankrupty proceeding there is a
                                      special rule in § 191 Exp. 1 KO with a minimum
                                      of EUR 750, - for their activities.#




     How are these fees paid?#
72                                    Through retain from the amounts which the
                                      trustee gets from the asignment.#




     Are there special problems with - the special treatment of contractual secured
73   the court run system?           creditors (§ 12 a KO) complicates the procedure
                                      #- creditors do not claim the demands to the
                                      bankruptcy proceedings and frequently try to
                                      execute the demands after the procedure#- the
                                      set-off rights of the social security institutions
                                      and the privileged position of maintenance
                                      creditors make bankruptcy proceedings more
                                      difficult#- the duration of the bankruptcy
                                      proceedings is not taken into account in the
                                      duration of the probationary period#- the 10%
                                      minimum ratio in the probationary period is an
                                      arbitrary one and especially is for income-weak
                                      debtors and debtors in precarious employer-
                                      employee relationships an obstacle for
                                      discharge of debts#
     Is there any special law on debt yes; #There is no special "debt counselling law",
74   counselling?                     relevant regulations are: #- § 12 Insolvency
                                         Law Introductory Law: Privilegation of a debt
                                         advice company# § 12. (1) The Federal
                                         Minister of Justice has to give the privileg to a
                                         debt advice company if#1. it is not directed
                                         toward profit, #2. the consultation it offers is
                                         free of charge, #3. it is reliable, #4. it works on
                                         the average of at least three debt advisors in
                                         the financial year all day busily, #5. it has an
                                         up-to-date organization aligned at the
                                         requirements of a quality management and #6.
                                         it successfully works for at least two years in
                                         the area of the debt consultation. Before the
                                         decision a statement of the umbrella
                                         organsiation of the debt advice companies is to
                                         be caught up. #(2) The privilege expires with
                                         the dissolution of the debt advice company.
                                         The Federal Minister of Justice has to determine
                                         an expiring by decision. #(3) The Federal
                                         Minister of Justice has to extract the privilege
                                         with decision, if the conditions among whom it
                                         was given are ommitted. The umbrella
                                         organisation of the debt advice companies has
                                         to report to the Federal Minister of Justice on
     What does it regulate (i.e.:)?
                                         the omission of the conditions according to Exp.
75                                       see aboce question 74.

     i.e.: public, private or non-for-
     profit organisation, access,
     qualification?#
     Are there any restrictions on
76   who is allowed to give debt
                                     No.#

     advice?#




     What are the main agencies
77   providing this advice?#
                                     Non-profit consulting institutions, usually
                                     independent carriers in forms of associations or
                                     non-profit limited companies, financed
                                     predominantly by the countries.#
     What kind of services do they
78   primarily provide?
                                        Household budget analysis and optimization
                                        #settlement of debts out of court/judicially
                                        #socialeducational support #preventive offers
     i.e.: budgeting, court oriented
     assistance, psychological
     support?#




     Is the debtor entitled to (free)
79   legal aid?#
                                        Yes.#
     Is there any financial education
80   for overindebted people?
                                        #No.#




     Who can be a lender?               1.) In accordance with § 1 and § 4 Bankwesengesetz
81                                      consumer are banking transactions and only
                                        institutes, which possess a concession of the
                                        Finanzmarktaufsichtsbehörde are entitled to grant
                                        consumer credits (conditions for concession in § 5
                                        BWG).
                                        In accordance with Bankwesengesetz the
                                        Finanzmarktaufsichtsbehörde has to install a
                                        database until Jan 1st 2004, which provides
                                        information about the existing concessions of the
                                        credit institutes and can be searched via internet.
                                        the following insitutions are entitled to banking
                                        transactions (see enclosed
                                        zugelassenekreditinstitute.pdf):




                                        2.) Since Apr 1 st 2004 the
                                        Finanzmarktaufsichtsbehörde (legal basis:
                                        Finanzmarktaufsichtsbehördengesetz).




     Who supervises the lenders
                     Belgium                                           Denmark

Yes, see annexed list of legislation.




Legislation relating to consumer credit and       The texts (in Danish) of the Bankruptcy Act
collective settlement of debts is available in    (Konkursloven , the relevant paragraphs are §§ 197-
                                                  237) and of the Consumer Credit Agreements Act
French and Dutch on the Service Public Fédéral
                                                  (Kreditaftaleloven ) can be found
(SPF) Economie site:#http://                      at#http://www.cbs.dk/departments/law/sources_of_l
www.mineco.fgov.be#Recent legislation is          aw/love/lovindex.htm      #
available in French and Dutch on the Moniteur
Belge site:#http://www.moniteur.be#Draft
legislation is available in Franch and Dutch on
the Chambre des Représentants
site:#http://www.lachambre.be#Judgments of the
Cour d'Arbitrage are availabele in French and
Dutch at:#http://www.arbitrage.be#Judgments of
the Cour de Cassation are available in French
and Dutch at:#http://www.cass.be#
Consumer credit:#E. BALATE, P. DEJEMEPPE, F.                   Literature On Debt Adjustment (Gældssanering )
DE PATOUL, Le droit du crédit à la                             according to the Bankruptcy Act
consommation, De Boeck, Brussels, 1995#M.                      (Konkursloven ):#Mogens Munch: Konkursloven med
                                                               kommentarer, 9th ed. 2001 by Lars Lindencrone
DAMBRE, Consumentenkrediet, Gent, Mys &
                                                               Petersen og Anders Ørgaard #Lilian Hindborg:
Breesch, 1993#F. DOMONT-NAERT,                                 Gældssanering i praksis, 2nd ed. 1999 (with
Consommateurs défavorisés : crédit et                          Supplement 2001) #Gert Drews Jensen:
endettement, Contribution à l'étude de                         Gældssanering, 2nd ed.1998 ##Literature on
l'efficacité du droit de la consommation,                      Consumer Credit Agreements:# Lennart Lynge
Brussels, Story-Scientia, 1992#Le crédit à la                  Andersen: Lov om Kreditaftaler med kommentarer
consommation, Jeune Barreau de Bruxelles,                      (3d ed. 2001)#Hans Helge Beck Thomsen:
                                                               Kreditaftaleret (3d ed. 2002)
1997#P. LETTANY, Het consumentenkrediet,
Antwerpen, Kluwer,1993##Collective
settlement of debts:#E. BALATE, P.
DEJEMEPPE, F. DOMONT-NAERT, Le règlement
collectif des dettes, Dossier du Journal des
Tribunaux n° 30, Larcier, Brussels,
2001#COMMISSION UNIVERSITE-PALAIS, Les
procédures de règlement collectif du passif,
Liège, 1999#P. DEJEMEPPE, Le Guide du
traitement du surendettement, Centre
Coopératif de la Consommation, Brussels,
1999#B. DE GROOTE, De collectieve
schuldenregeling, Kluwer, 1999#G. DE LEVAL,
La loi du 5 juillet 1998 relative au règlement
collectif des dettes et à la possibilité de vente
de gré à gré des biens immeubles saisis, Fac.
Droit de Liège, 1998#E. DIRIX, P. TAELMAN
(eds), Collectieve schuldenregeling in de
praktijk, Intersentia Rechtswetenschappen,
1999#OBSERVATOIRE DU CREDIT ET DE
yes#CRIOC (Centre de Recherche et d'Information des            No#To my knowledge no report etc has been
Organisations de Consommateurs) has carried out an             published within the last 5 years. However, just a
evaluation of the Law of 12 June 1991 in relation to           few days ago (mid April 2003) a newspaper reported
                                                               that an accountant had studied cases from selected
consumer credit (CRIOC, Rapport final de synthèse - La loi
                                                               different bankruptcy courts. The study was said to
du 12 juin 1991 relative au crédit à la consommation : un
                                                               reveal rather big local differences concerning the
premier bilan, Brussels, 1996). #This evaluation formed the
                                                               success rate of applicants for gældssanering (Debt
basis for the reform which was passed recently (Bill           Adjustment). #
amending the Law of 12 June 1991 in relation to consumer       Please provide a copy or indicate where the material
credit, Documents parlementaires, Chambre, 2002, doc.          is available:I have not seen the ma+E11terial refered
n° 1730/8).#In 2000, the Observatoire du Crédit et de          to in the recent newspaper articles mentioned
l'Endettement carried out an evaluation of the Law of 5 July   above#
1998 on collective debt settlement. #Please provide
a copy or indicate where the material is
available:#CRIOC, Rue des Chevaliers, 18 - B 1050
Brussels#http://www.oivo-crioc.be#OBSERVATOIRE DU
CREDIT ET DE L'ENDETTEMENT, Château de Cartier,
Place Albert Ier, 38 - B 6030 Marchienne-au-
Pont#http://www.observatoire-credit.be#
Service Public Fédéral des Affaires Economiques The Ministry of Justice (Justitsministeriet ) is
                                                    administering both the Bankruptcy Act and the
                                                    Consumer Credit Agreement Act. The practical work
                                                    (consumer advice, information etc) is dealt with by
                                                    the Consumer Protection Agency
                                                    (Forbrugerstyrelsen ) and the Consumer Ombudsman
                                                    (Forbrugerombudsmanden )




yes; #The Law of 14 July 1991 on commercial         no
practices and consumer information and
protection applies to advertising, promotional
measures, exploitative terms, distance sales,
etc.##
yes; #Consumer credit is subject to the Law of
14 July 1991, but the Law of 12 June 1991
contains regulations which are stricter in many
respects.##




yes; #Consumer credit is regulated by the Law     yes; #The Consumer Credit Agreements Act
of 12 June 1991, as amended on a number of        (Kreditaftaleloven ), which implements the Consumer
occasions. A number of aspects of this Law        Credit Directive. contains detailed rules on
                                                  precontractual financial information, on credit sales,
have just been amended by Parliament (Bill
                                                  repossession etc) protecting the consumer debtor.
amending the Law of 12 June 1991 in relation
to consumer credit, Documents Parlementaires,
Chambre, 2002, doc. n° 1730/8). The new Law
has not yet been published in the Moniteur
belge. Part will come into force on 1/6/03 and
part on 1/1/04.#
There is no official data about the average intrest         no#
rate on the market.
The consumer magazine Budget & Droits publishes
every 2 months the best
rates of the market for some consumer credit. For
instance :
- the "best buy" for a loan of 10.000 euros was in
April a TEG of 7 % but
the cheapest big bank proposed a rate around 9 % ;
for a bad risk, the rate
would be 15,50 % (maximum rate legally
authorised) and the market is spread
between those different rates.
- if the loan is used to buy a new car, it is possible to
find the same loan
at 4,65 %.
- revolving credit associated to credit cards are
usually close to the
maximum rate legally authorised : 16 % including
the cost of the card.




Maximum authorised rates are set for consumer #
credit by royal decree as a function of changes
in the market.

Maximum rates vary according to the type of
credit, the amount and the term. #The
maximum TAEG authorised by law is currently
set at 25.5%; it applies to instalment loan
agreements for less than 500 euros repayable
over a maximum of 12 months.#The lowest
authorised maximum TAEG is currently set at
11%; it applies to hire purchase agreements for
more than 10,000 euros repayable over more
than 48 months.#For more information, see the
SPF Economie site
(http://www.mineco.fgov.be)#
There is no maximum rate for mortgages.##       ##




There is no maximum rate for business loans.#   #




The Ministre de l'Economie.#                    #
#Where the legal maximum rate has been             ##
exceeded:#- the consumer does not have to
pay any interest and retains the benefit of
staggered payments;#- the lender is at risk of
prosecution.#




#For all consumer credit loans:#Any advertising All costs connected to the credit to be paid by the
giving an interest rate or any other figure      consumer must be disclosed except mainly #1)
relating to the cost of credit must give the     costs in case of default, #2) costs connected with
                                                 money transfer, provided that the consumer is free
TAEG (global effective annual interest
                                                 to choose between different, reasonable methods of
rate).#The loan offer must state: the TAEG,      payment and the costs are not unusually high, #3)
where necessary through a typical example in     costs of membership of a union/an association
cases and under conditions set by the King;      according to another agreement than the credit
conditions for use and repayment of the          agreement even if the membership influences the
loan.#For sales by instalments:#All advertising terms of the credit and #4) insurance/guarantee
relating to the price of goods or services must  costs unless the insurance/guarantee secures
                                                 payments under to the credit agreement. #Cf. The
state the instalment price, the total instalment
                                                 Consumer Credit Agreements Act § 13.#
price, amount of the deposit, the number,
frequency and the amount of payments.#An
instalment sale offer must include certain
specific information (the amount of the deposit,
the total cost of credit, the date of the first
payment…)#For instalment loans:#All
advertising for an instalment loan which refers
to a set amount or to a TAEG must state the
applicable TAEG, the duration of the agreement
and the amount to which the above conditions
apply.#The offer of a loan payable by
instalments must contain certain specific
information (the nominal amount of the loan,
the total cost of credit, the date of the first
payment...).#For leasing agreements:#All
advertising which relates to the price of goods
See response to question 14                         The consumer must be informed of the
                                                    #1) the amount borrowed (i.e. excluding
                                                    all costs)#2) the total amount of the
                                                    credit costs, #3) the annual costs in %
                                                    (APR)#4) the total amount to be paid (i.e.
                                                    the total of the amount borrowed, the
                                                    down payment and the credit costs#5) the
                                                    payment plan, including the size and date
                                                    of each instalment to be paid#6) the price
                                                    of the goods in question if the consumer
                                                    paid cash down.#Cf. The Consumer Credit
                                                    Agreements Act § 9.




#The loan offer (from 1/6/03 : the agreement)      #The requirements mentioned in answer to question
contains compulsory information, some of which 15 go further than those in the directive and may to
must be given in the form of separate clauses     some extent be interpreted as (indirect) warnings.#
in bold letters.#These are:#1. "never sign a
contract which has not been completed" #2. a
statement to the effect that insurance in
respect of the outstanding balance is not
compulsory and that the consumer may cancel
it during the first month (new legislation)#3.
"the consumer may not sign either a bill of
exchange or a promissory note promising or
guaranteeing payment of liabilities arising under
the loan agreement. Nor may the consumer
sign cheques guaranteeing liabilities arising
under a loan agreement".#4. "apart from the
agreed TAEG, the consumer cannot be required
to pay any additional fees than those expressly
agreed, with the exception of agreed sums
payable in the event of failure to fulfil the
agreement".#5. a statement in relation to
retention of title.#6. the text of article 18 in
relation to the cooling-off period.##
Yes, the lender must look into the debtor's         no general requirement to this effect
solvency and may not grant a loan unless it
considers that the consumer is reasonably able
to repay it.




#If the lender grants a loan when it should         #There may be (very) weak indications in that
have refused it because of the consumer's           direction but at this point no principle or rule to this
inability to repay it from his/her resources, the   effect can be established. #
judge may withold the right to claim the
interest. Judges have applied this sanction on
many occasions (see decisions published in the
Annuaire Juridique du Crédit et du Règlement
Collectif des Dettes, available from the
Observatoire du Crédit et de l'Endettement)#
yes; #The Centrale des Crédits aux Particuliers   yes; #This kind of activity is carried out by different
was set up in 1985. The lender must consult       private companies. One of these is E41rather big. ##
the Centrale before making a consumer loan#




The Centrale des Crédits aux Particuliers is      Privately
organised within the Banque Nationale de
Belgique.
The Centrale des Crédits aux Particuliers           As far as consumer credit is concerned the ordinary
records defaults in payments of consumer loans      systems do not seem to engage in positive
or personal loans. From 1.6.03, the register will   registration.#The Personal Data Processing Act (no.
                                                    429/2000, lov om behandling af personoplysninger )
be extended to loan agreements (Centrale
                                                    contains elaborate rules (in §§ 19-26) regulating the
Positive). The lender must consult the Centrale     activities of Credit Information Bureaus, including an
before making a consumer loan.#                     licence requirement.#
In the past, some postal sales companies have       No, see answer to question 21
wrongly registered some consumers. The
Banque Nationale deleted these entries
following demands made by the consumers
concerned.




Under the rules governing marriage, if a credit     A spouse is only co-liable if (s)he enters the credit
agreement was concluded for household               agreement her/himself as a co-debtor or a guarantor.
necessities, both spouses are liable. If a credit   The validity of the contract is regulated by the same
                                                    principles of law as a contract to this effect entered
agreement exceeding household necessities
                                                    into by any other co-debtor or guarantor.#Credit
was made with only one spouse, the other            agreements entered into by minors (i.e. children
spouse may seek its cancellation from the court     under 18) are not binding.
of first instance. #Under the rules governing
the incapacity of minors, authorisation by the
Juge de Paix is required for a minor to be able
to take out a loan. This rule also applies to
emancipated minors. If such autorisation is not
obtained, , the credit agreement will be void
and the minor will not have to repay the sums
due unless the transaction generated a profit
for the minor.#In addition, the Law of 11 June
1991 provided that the income of minors
cannot be used to provide a guarantee in
respect of a consumer credit agreement.##
see reply to question n° 23                           See answer to question 23




The Law of 12 June 1991 contains specific rules       Especially cases dealt with by the Banking
governing those who provide guarantees in             Complaints Board (Pengeinstitutankenævnet )
respect of consumer credit agreements:#- the          concerning elderly parents signing as guarantors for
                                                      commercial credit to their children have attracted
guarantor must be informed before conclusion
                                                      some attention and formed part of the background
of the agreement and be provided with a copy          for the introduction in 2002 of provisions offering
of the offer;#- the guarantor must also be kept       private guarantors (in general) partial protection
informed of problems arising in relation to           against banks.
fulfilling the agreement such as missed
payments and payment facilities provided; #-
the guarantee for liabilities arising under a
credit agreement must specify the amount
guaranteed. The guarantee is only good for
that amount, which may be increased by
interest due on arrears #- even in the case of a
guarantee for full joint and several liability, the
lender must first put the borrower on notice to
pay in accordance with the formalities in
relation to cancellation of the
agreement.#Further, under the new Law, a
guarantee for a credit agreement of an
indefinite term will be limited to 5 years
(renewable).#
yes; #The law restricts the rate of interest on    According to the Payment of Interest Act (Renteloven) the
arrears in respect of a consumer loan to the       interest rate in case of nonfulfilment of payment obligations
                                                   as a general rule is maximized to the benefit of consumer
TAEG specified in the agreement, plus a
                                                   debtors.
surcharge of 10%.##




#The law provides that payments must be            No###
allocated prioritising payment of the principal.
#Moreover, interest on arrears can only be
calculated in relation to the capital element of
unpaid monthly instalments (in the case of
simple arrears) or on the outstanding amount,
being the amount required to repay the
element of capital not yet repaid (where the
loan is cancelled).##
The lender may not withdraw from the               #According to general principles of law the criteria
consumer credit agreement unless the               is: fundamental breach of a contractual obligation.
consumer is at least two months in arrears or in   #As far as the consumer‟s non-fulfilment of payment
                                                   obligations is concerned the Consumer Credit
arrears of an amount equivalent to 20% of the
                                                   Agreements Act § 29 specifies this general principle
total outstanding sum.#                            to the effect that the delay must exceed 30 days and
                                                   that the amount due must be at least 10% of the
                                                   total debt, (or 5% if it consists of more instalments
                                                   or all the remaining debt).#




#The lender must put the consumer on notice,   #The requirements mentioned in answer to question
in the form of a letter sent by recorded       28 are not supplemented by requirements concerning
delivery, to pay within a month, reminding the notice or the like.#
consumer of the consequences of failure to do
so. The consumer then has a month to repay
missed instalments. The lender may only
cancel the consumer credit agreement upon the
expiry of this period.#
yes; #The law provides that:#- intermediaries    no
of loans must be registered with SPF Economie
;#- the consumer cannot be charged for any
element of the intermediary's fee#- payment of
commission by the lender is spread over the
term of the agreement.#




#The Inspection Economique has recently          ##
conducted a survey of intermediaries which has
led to withdrawal of registration of
intermediaries who were using illegal methods
such as splitting loans.#
yes; #When the new Law comes into force, loan     no##
intermediaries will have the same duties as the
lender to check the consumer's solvency, with
the exception of the duty to consult the
Centrale des Crédits aux Particuliers.#




yes; #There is also a maximum interest rate       no##
applicable to amounts borrowed through
overdrafts, set at 14%. Where the borrower
exceeds the overdraft limit, this rate may be
enhanced by a factor of 10% (Law of 14 May
2001, art. 3).##
no                                                  no




yes; #Where there are arrears of payments, the      yes; #The terms of suppliers of gas and electricity
debtor may require maintenance of a minimum         are under the supervision of the Energy Authority
level of electricity supply (so that the dwelling   who has brought about special notice requirements
                                                    in the suppliers' contracts with consumers. #
can be lit and there is sufficient power to
operate a refrigerator). ##
yes; #Where the tenant has stopped paying         yes; #In case of the tenant's non-fulfilment of the
rent, the owner can apply to the Juge de Paix.    payment obligation the landlord must give the tenant
The owner must first attempt to resolve           written notice demanding payment within 3 days.
                                                  Eviction is excluded if the tenant pays the amount
matters through conciliation before the Juge de
                                                  due within the 3 days.#
Paix. The owner may only seek eviction if the
conciliation process fails. The owner cannot
evict the tenant him/herself without a court
order. The Juge de Paix may set a period for
payment to be made in order to avoid an
eviction.#In addition, a Law of 30 November
1998 provides that the Centre Public d'Aide
Sociale be informed prior to eviction and that
the tenant must be allowed a period of one
month in order to find alternative
accommodation.##




no##                                              yes; :#The general rules in the Bankruptcy Act on Debt
                                                  Adjustment (mentioned below) also apply to taxes etc.
                                                  #Similar rules are found in the tax legislation (Act no.
                                                  169/2000 on Collection of Taxes etc (Lov om opkrævning af
                                                  skatter og afgifter) § 15) making it possible to grant debtors
                                                  with only tax debts etc relief without initiating the rather
                                                  complicated Debt Adjustment procedure according to the
                                                  Bankruptcy Act. #
yes; #Assignment of earnings is an document in       no
which the consumer empowers the creditor to
obtain payments directly from his/her
employer, without requiring an order from the
judge. (unlike in the case of attachment of
earnings or delegation).#Most lenders require
that borrower(s) sign an assignment of
earnings by way of a guarantee of their
liabilities.#The Law of 12 April 1965 on the
protection of workers' income provides that, for
the assignment to be valid, certain formalities
must be observed:#- a separate document: an
agreement to assign income to a creditor must
form a distinct part of the agreement whose
fulfilment it guarantees;#- both consumer and
lender as well as, if applicable, the guarantor,
must be given a copy of the assignment
document;#- if the purpose of the assignment
is to guarantee repayment of a consumer loan,
the document must recite the articles of the
Law describing the procedure enabling the
consumer to object.#Because the creditor has
possession of an assignment, it can apply
directly to the employer in the event of default
by the consumer. However, the creditor must
observe certain formalities:#- the creditor must
      notify the consumer, by individual to live
first #In order to enable eachregistered letter or
yes;
with human dignity, the law provides for certain
income to be partially or completely
unavailable. The rules below also apply to
attachment of earnings.#Articles 1409 and
1410 of the Code Judiciaire list the income
protected by the exemption rules. Basically,
the income relates to holiday pay and substitute
income (pension, unemployment benefit,
disability benefit…) and maintenance #Family
allowances, disability allowances, minimum
income, guaranteed income for retired people,
social security paid by the C.P.A.S., ... are all
completely exempt. #With regard to other
income, the amounts that can be paid over are
modified each year and vary according to
income. For 2003:#- up to €857 : 0 %#- from
€857.01 to 921 : 20 %#- from €921.01 to
1016 : 30 %#- from €1016.01 to 1111 : 40
%#- over €1111 : 100 %.#The law provides
that, where an assignment is implemented, the
employer must pay the remaining element
over, at the option of the worker, either
directly, or by postal transfer, or by cheque.#
yes; #Recovery of loans is regulated by the Law
of 20 December 2002 relating to recovery by
consent of consumer debts.##




                                                  According to the Debt Collection Act ( no.
                                                  319/1997, Inkassoloven) private debt collection
                                                  (except when performed by attorneys and
                                                  banks) requires licence by the Chief
                                                  Commissioner of Police. Staff of a Debt
                                                  Collection Agency addressing the debtors
                                                  personally must be approved by the Chief
                                                  Commissioner of Police.The debt collection
                                                  agencies are regulated by a general clause
                                                  demanding that the activities be in accordance
                                                  with "good Debt Collection Practice".
                                                  Furthermore, the Act contains detailed rules on
                                                  personal contact with the debtors.
#No.#The recovery office cannot claim fees        Please describe more detailed:#§ 9 a of the Payment of
which were not provided for in the credit         Interest Act (Renteloven) as amended by act no. 379/2002
                                                  establishes a general principle of reimbursement of
agreement from which the debt arises.#
                                                  reasonable and relevant costs and authorises the Minister of
                                                  Justice to regulate and maximize extra-judicial collection
                                                  costs concerning private claims. #Accordingly, Administrative
                                                  Order no. 601/2002 contains notice requirements and
                                                  precise maxima concerning both collection performed by
                                                  collection agencies etc. and collection performed by the
                                                  creditor himself.
#Practices likely to mislead the consumer, to         See answer to question 40
affect his/her private life or his/her human
dignity are prohibited both by the head of the
debt recovery office and the head of the
creditor company. The Law targets in
particular:#- incorrect information as to the
consequences of default in making a
payment;#- use of a statement on the
envelope to show that the letter relates to a
default in making a payment;#- application of
charges not provided for in the loan
agreement;#- approaches to the debtor's
neighbours, family or employer;#- recovery of
sums due from someone other than the
debtor;#- recovery of sums due in the presence
of a third party (except with the consent of the
debtor);#- express and deliberate harassment
of a debtor who disputes the debt ;#-
procedures designed to obtain
acknowledgement of the debts, a bill of
exchange or an assignment of wages from the
debtor;#- telephone calls and home visits
between 10pm and 8am.#Debt recovery
agencies must be registered with SPF
Economie. #All attempts to secure recovery of
a debt on an amicable basis must be preceded
#See reply to question 39.#                      Please describe more detailed:#Private creditors have no
                                                      access to the remedy of attachment of future earnings or
                                                      wage garnishment (except for alimony). #According to
                                                      special regulation most public claims can be enforced by
                                                      attachment of future earnings/ wage garnishment. #
See reply to question 64.             The general exemption principle is found in the
                                      Administration of Justice Act § 509 defining the minimum to
                                      be left with the debtor as what is necessary to maintain a
                                      "modest home and a modest standard of living for the debtor
                                      and his household".#It should be kept in mind that future
                                      earnings are generally exempted #from execution, see
                                      answer to question 43.




#The law was amended in 1993 1993.#   No
yes#What is the legislation in your country that
applies to consumer bankruptcy? Please give the
name of the law:#Law of 5 July 1998 on the
collective settlement of debts#Effective date of
this law: The Law came into force on 1/1/99.#




                                                   Yes# What is the legislation in your country that
                                                   applies to consumer bankruptcy? Please give the
                                                   name of the law:The Bankruptcy Act
                                                   (Konkursloven) §§ 197-237. Effective date: 1
                                                   July 1984
yes; #A Bill seeking reform of the collective      No
debt settlement procedure has been presented
but has not yet been debated in this
parliament.##Please give the name of the draft
etc.: "Proposition de loi modifiant le Code
judiciaire en ce qui concerne le règlement
collectif des dettes" (Documents
parlementaires, Chambre, 2002, n°
2149/001).#
To be incapable of paying his/her debts.#            The Debt Adjustment Scheme (Gældssanering) is a special
                                                     device partly inspired by the US-American rules on discharge
                                                     and Adjustment of Debts of an Individual with Regular
                                                     Income. #The Debt Adjustment scheme is intended to
                                                     supplement the traditional individual and collective creditors'
                                                     remedies:#In the context of bankruptcy, the scheme is an
                                                     exception to the traditional principle that the creditors not
                                                     paid in full by the distributions from the estate still have their
                                                     personal claims against the debtor. If a bankrupt individual
                                                     debtor is hopelessly indebted also after the distribution of the
                                                     estate, the remaining debt may be written down according to
                                                     the rules on Debt Adjustment In Bankruptcy. In such cases
                                                     the Debt Adjustment procedure is an appendix to the
                                                     ordinary bankruptcy proceedings. #In order to make the Debt
                                                     Adjustment scheme available to non-business debtors a
                                                     special procedure tailored to non-asset cases, Debt
                                                     Adjustment Outside Bankruptcy, was introduced. This
                                                     remedy enables debtors who are caught in the deadlock of
                                                     permanent indebtedness and not "reached" by the rules of
                                                     bankruptcy to deal collectively with their creditors and get out
                                                     of hopeless indebtedness. #The difference between Debt
                                                     Adjustment In and Outside Bankruptcy is one of procedure.
                                                     The prerequisites of the writing down of the debts are the
                                                     same no matter whether the Debt Adjustment takes place in
                                                     or outside bankruptcy.##




Please explain the philosophy of your bankruptcy     Please explain the philosophy of your bankruptcy legislation
legislation more detailed:#The law clearly defines   more detailed:#The considerations carrying the Danish Debt
the objective of collective debt settlement:         Adjustment rules take their starting point in the negative
                                                     personal and social effects of hopeless indebtedness.
restoring the financial position of the debtor       Individuals with no prospects of being able to get rid of their
enabling him/her to pay his/her debts as far as      debts are left in a position, whose hopelessness inevitably
possible while guaranteeing the ability to live      leaves its mark on the every day life of the debtor and his
with human dignity. The balance between the          family. Hopelessly indebted individuals are most likely to give
interests of creditors and the protection of the     up trying on their own to change the situation. Typically, they
                                                     lack not only the motivation but, depending on the
human dignity of the debtor and his/her family
                                                     circumstances, also the practical possibilities to keep or get
must guide the judge in the preparation of a         wage-earning employment or start a (new) business of their
plan for the collective settlement of debts. To      own. Although they are frequently able to pay in the least
achive this, the judge may, in particular, decide    part of the debts their motivation to use their earning capacity
to grant partial remission of the capital debts      and paying ability to do so is likely to be extremely weak
outstanding.#The preparatory work for the            when the prospect is, that they are nevertheless left in a
                                                     hopeless economic situation.#The human and other social
legislation emphasises the need to grant a           considerations in favour of debt adjustment need not be
remission of debts to overindebted debtors who       incompatible with the interests of the creditors. A nominal
do not have or no longer have significant            writing down of unrealistic (parts of) claims does not cause
capacity for repayment: « In the most extreme        them any loss. On the contrary, the writing down of the debts
situations, virtually total remission of debts       to a manageable size may lead to a better and more equal
                                                     satisfaction of the creditors, especially if the writing down is
should be ordered by the judge. In such cases,
                                                     combined with a rescheduling of the remaining realistic part
the plan will have only a symbolic function (…)      of the debts.#The objections which can be raised against the
Remission of debts will be a solution of last        introduction of rules making the existence of valid obligations
resort, where no other measure is possible and       depend on the economic situation of the debtor are based on
when this measure alone will preserve the            considerations of principle: First of all, such rules may
human dignity of the debtor » . #While today         jeopardize the general readiness to pay. Moreover, they may
yes; please describe this procedure more detailed:   no
#The procedure is commenced by petition of
the debtor alone before the enforcement judge
sitting in his/her local court.#Where the petition
is granted, the judge immediately appoints a
debt mediator.#Initially, the debt mediator
attempts to negotiate a settlement plan with
the creditors. All measures are possible:
rescheduling payments, remission of interest or
capital,… The law does not compel the mediator
to observe the principle of equality among
creditors. The plan must be agreed both by the
debtor and all of the creditors. Where there is
agreement, the judge will ratify it. Where no
agreement has been reached within a period of
four months, the mediator will provide a report
to the judge.#




yes; please describe the voluntary procedure more    No
detailed:#The consumer may ask a debt
mediator to negotiate an agreed plan
independantly of any judicial procedure.#




Debt mediators#
The fees of the mediator are given priority in
terms of the debtor's resources. But if the
debtor's resources are insufficient, they will be
met by a Fonds de Traitement du
Surendettement, created by the Law and
funded through an annual levy on a percentage
of the sums outstanding under credit
agreements. #
There are no data available.#




Maximum of 4 months#
Please explain in detail and give examples:#Some
creditors, such as the tax office, systematically
reject plans negotiated by agreement with an
element of debt remission.#




In the absence of agreement, the judge has the      Only individuals (not corporations etc.) can apply for Debt
power to impose a settlement plan on the            Adjustment. #The Bankruptcy Act lays down two
                                                    prerequisites embodying (1) the hopelessness and (2) the
creditors. The plan may incorporate various
                                                    reasonableness requirements of the Danish "Fresh Start
measures, such as postponement or                   Policy".#re (1): In the words of the Bankruptcy Act the debtor
rescheduling of debts, the reduction in the         must »prove that he is not able and within the next few years
contractual rate of interest to the legal rate of   has no prospect of being able to fulfil his obligations«#The
interest, suspension of the effect of security      important thing is whether the debtor's payment of the debt
                                                    (in total) appears futile when seen in the light of the debtor's
and assignments of credit and the remisson of
                                                    present and future ability to pay. Whether this is the case
interest on arrears, indemnities and charges.       must be decided on the basis of a statement of the debtor's
The judge's duty is to ensure equal treatment       actual debts compared with his present income and his
of creditors.#The maximum duration of the           possibilities of raising means as well as a prognosis
plan is set at 5 years, with the exception of       concerning his future income.#re (2): If the economic
credit agreements, for which the time for           requirement (hopeless debt) is met the bankruptcy court
                                                    must look into the following rather vague requirement that
payment can be extended to half of the
                                                    »the circumstances of the debtor and the facts of the case
remaining term. The objective is that, at the       speak in favour of Debt Adjustment«. The Act contains some
end of the plan, the debtor will have been able     clarification in the form of a (non-exhaustive) listing of factors
to repay his/her debts.#The plan can impose         to be taken into consideration when deciding on the
significant sacrifices on the part of the debtor,   reasonableness requirement. The factors listed are »the
                                                    debtor's interest in Debt Adjustment, the age of the debt, the
such as dedicating part of his/her unattachable
                                                    origin of the debt, the repayment attempts and the debtor's
income to the repayment of debts. However,          behaviour in the Debt Adjustment proceedings«#The test is
the power of the judge to deviate from              an overall assessment of a series of factors to appear in
protection of unattachable income is limited and    various constellations and of varying importance. The overall
must be subject to a decision based on special      assessment consists of a balancing of the said factors with
grounds and the debtor must in all cases            relation to the total (unsecured) debt against the
                                                    considerations of principle which can be raised against Debt
preserve income equivalent to minimum
                                                    Adjustment. #The procedural rules on Debt Adjustment
subsistence levels and enable the debtor to live    Outside Bankruptcy aim at safeguarding that reliable
There is no difference in terms of procedure:
abatement, the value of the plan and avenues
of appeal are similar.#On the other hand, the
contents of the plan are completely different.
In an agreed plan, anything is possible provided
the creditors agree, including full remission of
debts, preferment of a creditor, no time limit,
etc. On the other hand, the judge must
observe certain rules in formulating a judicial
plan (see above).#




Debt mediation is reserved to lawyers,                Practising lawyers
ministerial officers, attorneys and authorised
public or private institutions (in practice,
Centres Publics d'Aide Sociale and money
advice organisations).




#The judge may order remission of debts where Please describe more detailed:#Discharge is the very
it is indispensable for restoring the debtor's purpose of the entire procedure.#The discharge of a debtor
                                               does not apply to co-debtors.#See answers to question 57
financial situation.#Conditions imposed on the
                                               and question 65#
debtor when debts are remitted are very strict.
Attachable goods will be sold and distributed to
creditors; the remission of debts will only be
effected if the debtor has followed a debt
settlement plan for a period of three to five
years.#The Law relating to collective
settlement of debts has made no specific
provision for joint debtors and
guarantors.#Where the joint debtor is the
spouse of the overindebted debtor, it may be
best for the spouses to submit a joint petition.#
no                                               No




Once a decision has been made as to the          If the case is opened there is a general automatic stay of
admissibility of the petition, the Cours des     execution concerning claims eventually affected by the Debt
                                                 Adjustment order. See answers to questions 64 and 66#
Intérêts and enforcement procedures seeking
payment of a sum of money are suspended.
Creditors can no longer seise goods or harrass
debtors for payment.#
The following are the conditions for access to       See answer to question 64
the collective debt settlement procedure:#(a)
Being a natural person, not a business#Persons
who were in business at one point may apply to
engage in the collective debt settlement
procedure a minimum of six months after
ceasing business activities or, if the business is
insolvent, once the business has been wound-
up.#(b) Be domiciled in Belgium#(c) Be unable
to pay their debts#(d) Not have deliberately
become insolvent.#On the other hand, good
faith on the part of the petitioner is not
required by law.#The work carried out in
drafting the Law refers to a series of
hypotheses which would not constitute
deliberately becoming insolvent, such as an
accumulation of debts before lodgment of the
petition, even where the debtor knew or ought
to have known that s/he could not pay them,
refinance through a single loan in excess of the
debtor's ability to pay a number of previous
debts, entering into credit agreements securing
a lifestyle beyond the debtor's financial
resources, negligence on the part of the debtor
aggravating his/her debts through the
accumulation of interest on arrears and
The Law of 4 August 1992 on mortgage lending         It is not an indispensable requirement for Debt Adjustment
provides that, before being allowed to sell a        that the debtor sells the house in which the family lives. The
                                                     decisive factors are whether the expenditure on housing is
property in order to repay a mortgage loan in
                                                     unreasonably high and whether the debtor has a chance of
default, the creditor must attempt conciliation      reducing it by moving to another place fulfilling the needs of
before the juge des saisies (enforcement             the household. If the house represents any free value it
judge).#                                             should made available to the creditors. Thus, depending on
                                                     the circumstances a Debt Adjustment order may make it
                                                     possible for the debtor to keep the house. ##Mortgage
                                                     creditors and other creditors with secured claims are not
                                                     affected by a Debt Adjustment order in so far as their claims
                                                     are paid out of the proceeds in case of forced sale. The
                                                     question whether or not forced sale is to take place depends
                                                     on the ordinary rules and is not affected by the opening of
                                                     Debt Adjustment proceedings (Outside Bankruptcy). To the
                                                     extent a secured claim is not satisfied in full out of the
                                                     proceeds in case of realization a personal claim on the
                                                     debtor is all that is left and this claim is affected by the Debt
                                                     Adjustment order just like any other personal claim. Thus, at
                                                     the time of the order it can be uncertain whether or not a
                                                     secured creditor is affected by the order.#
-                                                  See answer to question 64#The same principle applies to
                                                   reservation of ownership and when the claim is secured by a
                                                   guarantor. While the liability of the debtor towards the
                                                   creditor as well as the guarantor is redefined by the Debt
                                                   Adjustment order the creditor's claim against the guarantor is
                                                   not affected.




Certain debts cannot be remitted:#-                All personal claims on the debtor incurred before the opening
maintenance arrears, #- debts by way of            of Debt Adjustment case are affected by the writing down and
                                                   the payment plan on equal terms.
compensation for injury to the person arising
from an offence#- debts arising from an
subsisting insolvency once the insolvency
proceedings have been closed.#




Privileges are suspended for the duration of the   None
plan for collective settlement of debts.#
In the context of collective debt settlement, the      The rationale of Danish version of Debt Adjustment is to give
judge may deviate from rules relating to               the debtor an actual possibility and restore his motivation to
                                                       pay the realistic part of the debts. As a rule of thumb the debt
earnings exempt from attachment in a decision
                                                       is reduced so much that the debtor becomes able to pay the
based on special reasons (see no. 39), but the         remaining debt in five years. The percentage of reduction is
debtor must retain an income equivalent to             calculated on the basis of a prognosis of the debtor's
Revenu d'Intégration Sociale (income                   expected income and cost of living in the period in question.
support).#                                             The estimated costs of living should allow a »modest
                                                       standard of living« for the debtor and his household, i.e. the
                                                       same criterion as that used in the general rule on a debtor's
                                                       exempt assets.




Certain goods are exempt from seizure by            See answers to questions 68 and 64- 65.
creditors. The Law sets out a fairly detailed list.
 Such goods include:#- necessary items for
everyday life (beds, table, chairs, heating,
washing machine, cooker, refrigerator, etc.)#-
books and other items used for education#-
items essential for the debtor's occupation with
a value of up to 2,500 euros#- religious
objects#- food and fuel for the debtor and
his/her family for up to a month#- a limited
number of farm animals with fodder and
bedding for a month.#




Minimum duration: #3 years (only in the case of        The writing down of the debts is normally combined with a
judicial plans with remission of capital debt):        payment plan concerning the remaining debts. Generally, the
                                                       payment period is the same as that on which the percentage
there is no minimum duration for other
                                                       of reduction is based, i.e. normally 5 years (see answer to
plans.##Maximum duration: #5 years (with a             question 68).
possible extension of five years for plans with
no remission of capital debts)##Exceptions:
#The time for repayment of consumer loans
may be extended. In that event, the new time
limit for repayment cannot exceed the term of
the settlement plan set by the judge, plus by
half of the remaining term of these credit
agreements. The general view is that this
provision cannot be applied unless the loan
agreement has not yet been cancelled. #
The scale of fees for mediators is set by the   The size of the fee is decided by the bankruptcy court taking
royal decree of 18 December 1998 establishing   into account primariily the reasonable time spent by the
                                                trustee. In an ordinary case the starting point seems to be
the rules and rates for setting fees,
                                                approximately 10.000 DKK (1.350 EUROs)#
emoluments and charges of debt mediators.##




see reply to question n° 53#                    As a main rule by the state#




-                                               It has been argued that the vague criteria (see answer to
                                                question 57) have created big local differences in court
                                                practice
yes; #Debt mediation services are authorised by No
the Communities. There is a number of decrees
regulating the activities of debt mediators (see
annex).#




The various enactments providing for debt
mediation have a common thread:#- debt
mediation must be carried out by an institution
organised on a legal basis;#- the institution
must not be run for a profit;#- the institution
must include a social worker and a lawyer with
suitable training or experience;#- institutions
must meet conditions of independence from
lenders and their intermediaries as well as
standards of integrity;#- the cost of mediation
is regulated;#- an authorisation procedure is
set up;#- support may be provided by the
competent authority.#
Acting as debt mediator is restricted to the      No
following;#- lawyers, ministerial officers who
are notaries, huissiers, mandataires de justice
(receivers) are mediators « as of right», as a
result of their profession or function. They do
not need to be authorised or accredited to act
as mediators;#- institutions which must be
accredited in order to act as debt mediators.#




Centres Publics d'Aide Sociale and some non-      Consumer organisations#
profit organisations#
Budgetary guidance #Negotiations with             Budgeting
creditors for extensions of time for payments.#




Yes, on the usual terms (income criteria)##       Overindebted consumers are typically entitled to legal aid (for
                                                  a very modest fee)#
#Centres Publics d'Aide Sociale provide               No
guidance in budgeting where needed.##




In Belgium, consumer credit is proposed by two main
types of companies
: banks and credit companies. Some supermarkets
and distant selling
companies proposed also credit to consumer
(specially revolving credit
associated to credit cards) but they are
intermediaries for credit
companies. All lenders have to be licensed by the
Ministry of Economic
Affairs (SPF Economie) who controles them.
                      Finland                                              France

http://finlex.fi/english/laws/index.php               I have sent you legislation on overindebtness
57/1993 Act on the Adjustment of the Depts of         and around the subject#credit law is on the net
a Private Individual#38/1978 Consumer                 : you can see the 2 laws on credit :#loi du
Protection Act#523/1999 Personal Data                 10.1.1978 and loi du 13.7.1979#or look in
Act#361/1999 Act on Guaranties and Third-             "code de la consommation"#
Party Pledges#633/1982 Interest
act#513/1999 Perintälaki (Act of debt
collection)#37/1895 Ulosottolaki (Execution
Act)#1031/19989 Asetus suojaosuudesta
palkan ulosmittauksessa (Decree of protect
share of wages)#




  #http:// http://finlex.fi/english/laws/index.php#   #http:// www.legifrance.gouv.fr/#
Niemi-Kiesiläinen, Johanna: Luonnollisen         #
henkilön velkavastuu insolvenssioikeudessa,
Helsinki 1995, Koulu, Risto - Havansi, Erkki -
Niemi-Kiesiläinen, Johanna: Insolvenssioikeus
Juva 2002, Koskelo, Pauliine - Lehtimäki, Liisa:
Yksityishenkilön velkajärjestely, Helsinki 1997




yes#                                                          yes#Surendettement, enquête typologique, Banque de
HE 183/1992#                                                  France,February 2002#Please provide a copy or
HE 180/1996#                                                  indicate where the material is
HE 98/2002#
                                                              available:#site: #ww.banque-
Oikeuspoliittisen tutkimuslaitoksen raportit:#
                                                              france.fr/fr/publi/telechar/19.htm#
143/1997 Koskinen, Seppo - Muttilainen, Vesa -
Perheentupa, Ilkka - Tala, Jyrki: Velkajärjestely ja
yritysvvelat hovioikeuskäytännössä#
43/1999 Sunila, Mirjami: Kuka karsiutuu velkajärjestelystä#
198/2003 Muttilainen, Vesa - Valkama, Elisa:
Velkajärjestelyn jälkeen#
Please provide a copy or indicate where
the material is available:#Library of Parliament,
Helsinki#
Ministry of Justice                                Francis Mer, Minister of Finance and the
                                                   Economy




yes; #Consumer Protection Act 38/1978 The          no#The various laws are listed in the Code de la
Consumer Protection Act applies, as the first      Consommation#
section says: to the offering, selling and other
marketing of consumer goods and services by
businesses to consumers. It applies also where
a business acts as an intermediary in the
transfer of goods or services to consumers.#
yes; #Chapter 7 in Consumer Protection Act
regulates consumer credits and Interest act
regulates interest on arrears. #Chapter 7
includes consumer credit that, by agreement, is
granted or promised to the consumer by a
business in the form of a loan, deferred
payment or another corresponding financial
arrangement.#Even credits granted for the
acquisition of a residence or for studies shall be
governed by the provisions of consumer
protection act unless otherwise stipulated in the
legislation pertaining to these types of
credit.#These provisions are applied to a lease
or hire or similar agreement on the basis of
which goods pass into the possession of a
consumer and under the terms of which the
cash price and the credit costs shall be paid
during the leasing period or the terms of which
otherwise indicate that the intent of the
agreement is to transfer the ownership of the
goods to the consumer, shall be deemed a
credit sale. #



no                                                   yes; #laws of 10.1.1978 and 13.7.1979
                                                     (articles L.311-1 to L.313-15 of the Code de la
                                                     Consommation#
no#    #                                       yes; #There are several different rates, depending on
                                               the loan, see "indices economiques", (repères
                                               financiers) on Internet site INC
                                               :www.inc60.fr#Please note, the rate is the taux
                                               effectif global - global effective rate, which integrates
                                               all of the fees associated with the loan
                                               (administration of the account, agent's fee,
                                               insurance, security) #




There is not maximum interest rate for         At the 1st quarter of 2003 :#- 22.08% for
consument credits, but usury is forbidden by   loans of less than or equal to 1524 euros#-
Penal Code 36:6#                               17.64% for overdrafts, permanent credit and
                                               loans of more than 1524 euros#-10.80% for
                                               personal loans of more than 1524 euros#
There is´nt maximum interest rate for mortage   At the 1st quarter of 2003 :#- 7.93% for fixed
loans.#                                         rate loans#- 7.39% variable rate loans#-
                                                7.96% for bridging loans ##




There is´nt maximum interest rate for small     At the 1st quarter of 2003 :#- 9.71% for issued
business credit.#                               loans#- 7.52% for loans at variable rates of
                                                interest for a term of more than 2 years #-
                                                8.19% for loans at a fixed rate for a term of
                                                more than 2 years#-11.79% for overdrafts#-
                                                10% for other loans for a term of less than 2
                                                years##
Sad to say but nobody.#                         The Banque de France determines these rates
                                                on the basis of a quarterly review of rates
                                                applied by credit institutions. The maximum
                                                rate (usury rate) is equal to the average rate
                                                applied plus 33.33%.#
#In cases of usury a court can stop too high    #The lender institution must repay any excess
rates, otherwise is there no consequense. As an ive interest collected. In addition there is a
example we can tell that consument credits      penalty of 2 years in prison and a fine of 45,000
interest rates by over 26% seem not to be too   euros.#
high.#




#The payments, interest and other credit costs       #The contract must state the interest rate, the
relating to the granting and use of the credit. If   total cost of credit, the various fees, the cost of
the agreement relates to a goods-or-services-        insurance and the cost of security.##
related credit even the credit price, any down
payment and the cash price. If the granting of
the credit is subject to taking out insurance on
the goods or services, the insurance and its
premium shall also be stated.#Even APR and
interest per year have to be disclosed.#
A consumer credit agreement shall be                 Loan agreements must specify the global
concluded in writing and the consumer shall be       effective interest rate (TEG or TAEG)
given a copy of the agreement.#The consumer          integrating all the fees associated with the loan
shall not be charged any payment, interest, fee      (administration of the account, agent's fee,
or compensation that is not included in the          insurance, security) #In addition, home loans
terms of this agreement.                             at fixed interest must be accompanied by a
                                                     repayment schedule with details of the split as
                                                     to interest and capital applicable to each
                                                     repayment.#




#Duties, not prescribed in article 4:#the            #In addition, home loans at fixed interest must
consumer credit agreement shall state the limit      be accompanied by a repayment schedule with
of the credit, if any;#the right to pay the credit   details of the split as to interest and capital
before maturity and the determination of the         applicable to each repayment.#
compensation therefore, if any.#The law does
not mention any kind of information about
concerning warnings. #
No.     The lender institution has an obligation to give
        advice even though it has no power to make
        investigations, nor positive registers to support
        this obligation. It still has to check that the
        customer's sworn declaration of income is
        sufficient for him/her to repay all his/her
        loans.#There is, however, no regulation on the
        subject and each institution has its own credit-
        rating method. It has been noted in general
        terms that lenders would like an encumbrance
        ratio (monthly payments divided by monthly
        income) of not more than 33%. #




#No.#   ##
yes; #A private company, has a wide coverage.# yes; #Specifically, there is a negative default
                                                 register, the "FICP ".#see pagee "Les fichiers et
                                                 la banque" on the INC Internet site :
                                                 http://www.inc60.fr/page/bases.2_les_guides./A
                                                 ction-detailguide/guide-1034-
                                                 les_fichiers_et_la_banque.xml/#




The company (Luottokunta OYJ) collect            The FICP is a negative register administered by
information abouth judgments of debts.#See       the Banque de France (public). It can only be
21.                                              consulted by credit institutions through two
                                                 routes:#- downwards route: the Banque de
                                                 France makes available a monthly update of the
                                                 register to the larger institutions#- upwards
                                                 route: an institution asks the Banque de
                                                 France about the position with regard to a
                                                 specific individual.
According to Personal Data Act#A person              #The FICP records designated arrears of
engaged in credit data activity may record into      payments (three missed instalments) along
a credit data file the name and contact              with registration with the overindebtedness
information on a person, as well as data on a        commission.
default in payment or performance, where:#the
default has been established by a judgment or
judgment by default handed down by a court
and no longer subject to appeal, by a measure
undertaken by the enforcement authorities or
by the protest of a registered bill of exchange;
or the default has led to the official declaration
of the insolvency of the data subject in
enforcement proceedings; or #the default has
led to the filing of a bankruptcy petition; or
#the default has been acknowledged in writing
by the data subject (debtor) to the creditor;
or#the default relates to a hire-purchase
scheme and under the Hire-Purchase Act
entitles the seller to repossess the object,#or
relates to another consumer credit agreement
and under the Consumer Protection Act entitles
the creditor to terminate the agreement.#For
getting information about some ones credit
ratings you must have a agreement with the
“Luottokunta” and for the agreement you have
to have some reason to get the information, for
example if you sell something on hire
It‟s always possible that the data about some       Appearance on the FICP register does not entail
person slip out and that‟s why it‟s neither         a legal prohibition against access to credit.
impossible that the debtor get some legal           However, in practice, an insitution will not lend
problems because of it. The book with this          to someone who is on the FICP register.
information could easily been used even in a
wrong way. Still it must be quite exceptional
and will not been a problem.




Co-liability in credit contracts and other debts    Solidarity between spouses is envisaged in
do not exist except that spouses, living            article 220 of the Civil Code: "Each spouse has
together, have co-liability for debts for cost of   the right to enter into a contract alone for
living (food), and for the rent for the home and    support of the household or the education of
summer residence. #                                 the children: any debt thus contracted by one
                                                    of them binds the other in solidarity.
                                                    #However, that solidarity does not take effect
                                                    in relation to expenditure which is manifestly
                                                    excessive having regard to the standard of
                                                    living of the household, the effectiveness or
                                                    ineffectiveness of the activity and the good faith
                                                    or bad faith of the other party to the
                                                    contract.#Nor does it have effect if both
                                                    spouses have not consented to it for purchases
                                                    by instalments or for loans, unless for modest
                                                    amounts for everyday necessities.#Under
                                                    articles 388, 1304 and 1305 of the Civil Code,
                                                    banks may not grant an advance on an account
                                                    which may be assimilated into a loan to
                                                    children.##
                                                    With regard to solidarity between spouses, the
                                                    consequence is that the creditor can only
                                                    pursue the one who took out the loan unless he
                                                    himself/she herself is at fault (knowledge of the
                                                    marital status of the one who took out the
                                                    loan). #




#Debt adjustment shall not prevent a creditor       Articles L313-7 to 313-10 of the Code de la
from recovering the debt from a guarantor           Consommation#With regard to solidarity
(section 14, Act on the Adjustment of the Debts     between spouses, the practice is a little more
of a Private Individual, 57/1993). The situation    complicated (see document "surendettement et
of the guarantor as compared with the situation     régime matrimonial," INC Hebdo)#With regard
of debtor has be the object of discussion and       to the provision of security by family members
critic. #As a result of the critic has the Act on   or close friends, we have asked for abolition of
Guaranties and Third-Party Pledges (361/1999)       what we consider to be an abuse of security.
several points were the duty to inform the          Lenders recognise that it is not a real guarantee
guarantor about the debtors situation is            for them, but a way of exercising pressure on
regulated.(for example section 23 subsection 2).    the debtor. In the course of debates at the
                                                    time of the 1998 reform, they agreed to give up
                                                    use of this type of guarantee. #
yes; #The maximum default interest rate is the     yes; #Two situations should be distinguished:#-
interest added whith 4 percentage. The debtor       where there is non-payment of instalments,
is still not bound to pay more than the official   the creditor cannot apply a rate of interest to
reference interest added whith 4                   the sums due which is higher than the interest
percentage.#Official interest is confirmed by a    rate on the loan#- when the overindebtedness
degree once a year..#                              commission decides (see reply 46 and below),
                                                   at the recommendation stage, to reduce the
                                                   rate of interest on the loans to enable the
                                                   debtor to repay his/her debts, the rate may not
                                                   exceed the "legal interest rate". In 2003, the
                                                   legal interest rate is 3.29%##




#No.#                                              #For consumer credit, see art. L311-30 of the
                                                   Code de la Consommation
                                                   L311-30 "En cas de défaillance de l'emprunteur,
                                                   le prêteur pourra exiger le remboursement
                                                   immédiat du capital restant dû, majoré des
                                                   intérêts échus mais non payés. Jusqu'à la date
                                                   du règlement effectif, les sommes restant dues
                                                   produisent les intérêts de retard à un taux égal
                                                   à celui du prêt. En outre, le prêteur pourra
                                                   demander à l'emprunteur défaillant une
                                                   indemnité qui, dépendant de la durée restant à
                                                   courir du contrat et sans préjudice de
                                                   l'application des articles 1152 et 1231 du code
                                                   civil, sera fixée suivant un barème déterminé
                                                   par décret."

                                                   #For home loans, see art. L312-22 of the Code
                                                   de la Consommation# Article L312-22
                                                      En cas de défaillance de l'emprunteur et lorsque le
                                                   prêteur n'exige pas le remboursement immédiat du
                                                   capital restant dû, il peut majorer, dans des limites
                                                   fixées par décret, le taux d'intérêt que l'emprunteur
                                                   aura à payer jusqu'à ce qu'il ait repris le cours
                                                   normal des échéances contractuelles. Lorsque le
                                                   prêteur est amené à demander la résolution du
                                                   contrat, il peut exiger le remboursement immédiat
                                                   du capital restant dû, ainsi que le paiement des
The creditor can, by agreement, for reason of       Article L313-12
the consumer‟s delay in payment or another
breach of contract, have the right to claim an         L'exécution des obligations du débiteur peut
instalment that has not otherwise matured. The      être, notamment en cas de licenciement,
creditor may enforce such a right only if the       suspendue par ordonnance du juge d'instance
payment has been delayed by at least one            dans les conditions prévues aux articles 1244-1
month and is still outstanding. The amount, in a    à 1244-3 du code civil. L'ordonnance peut
lump-sum credit, must be at least 10 per cent       décider que, durant le délai de grâce, les
or, if it concerns more than one instalment, at     sommes dues ne produiront point intérêt.
least five per cent of the original amount of the      En outre, le juge peut déterminer dans son
credit or, in the case of a goods-or-services-      ordonnance les modalités de paiement des
related credit, of the credit price or if it        sommes qui seront exigibles au terme du délai
concerns the total remaining claim of the           de suspension, sans que le dernier versement
creditor. The creditor have same right even if      puisse excéder de plus de deux ans le terme
the other breach of contract by the consumer is     initialement prévu pour le remboursement du
essential.                                          prêt ; il peut cependant surseoir à statuer sur
                                                    ces modalités jusqu'au terme du délai de
                                                    suspension.

                                                    The law only precises that the creditor can
                                                    require from the debtor the early termination if
                                                    there is a default of paiement ("défaillance de
                                                    l'emprunteur") but the text and the
                                                    "jurisprudence" don't precise exactly in which
                                                    conditions the creditor can exercise this right
                                                    (first date or more).
                                                    Meanwhile, we can suppose that a judge (if
                                                    there is a constestation of the debtor) will
                                                    eventually refer to the concept of
                                                    "characterized incident of paiement" , concept
                                                    used in the law concerning the "fichiers FICP "
                                                    and the "caution".
                                                    Concerning the "caution", the characterized
#The creditor must give a notice of maturity        #The debtor must have been subject to an
and wait. The maturity cannot enter into force      order under L1230 of the Civil Code.#
earlier than four weeks or, if the consumer has
earlier been reminded of the delay or other
breach of contract, not earlier than two weeks
from the date on which the notice of maturity
was given or sent to the consumer. If the
consumer, within this period, pays the delayed
amount or remedies the other breach of
contract, the maturity shall lapse.#
no       yes; #Article 65 to 71 of the Banking Law n°84-
         46 of 24 January 1984##




#    #   #The agent must have a mandate from a credit
         institution and provide proof of a financial
         guarantee specifically earmarked to repay sums
         entrusted to him/her. ##
no##                                              no#The credit institution is liable.##




yes; #Act of instalment (1966/91) including for   no##
example regulations about social force
majeure.#
yes; #Social force majeure in Consumer             yes; #Good faith is required at the time the
protection act: The consumer‟s illness,            debtor approaches the overindebtedness
unemployment or another corresponding reason       commission and not at the time s/he entered
that is not attributable to him prevent the        into the credit agreement. In return, the
creditor to use her right to early                 commission and the judge must investigate
termination.      #                                whether the loan was granted with due care.#




yes; #Some regulation exist to protect             yes; #Supply must be maintained until the
consumers.# If the house or a part of it are       debtor's file has been examined by a social
heated by electricity and the house or a part of   body or a departmental solidarity
it are used as a permanent residence, the          commission.#see brochure "surendettement"
electicity can not be cut off during the winter    p:111, article 136 of the loi sur l'exclusion of
before 4 months since the bill became due.#If      July 1998##
the reason why the consument has not been
able to pay is some kind of social force majeure
(for example unemployment), the electricity
can not be cut off before 2 month gone. #We
have same kind of regulation abouth social
force majeur on waterworks right to cut off
.    #
yes; #According to the Act on Residental Leases    yes; #To avoid eviction of the tenant for non-
the time for giving notice of discontinuance of    payment of rent, the judge may grant a period
the contract is 6 months for the landlord. The     for payment to be made. These renewable
landlord can even call off the contract if the     periods may extend to up to 2 years.#When
renter violates the agreement. The landlord has    eviction is ordered, the tenant may still ask the
to give a warning and he has not the right to      judge for time to move out. These periods are
call off the contract if the renter stops to the   renewable and may extend to up to three
breach against the contract.#For eviction the      years. #See INC leaflet "L'expulsion du
landlord must have a court decision. Then he       locataire") ##
can get assistance from the bailiff.     #




yes; #Taxes: Distress of taxes may contune         yes; #The general rule is that tax offices retain
only 5 year. A debtor may seek relief from tax     the power to grant time or remission of debts.
authories in case of social majeure.#              However, in the context of overindebtedness,
                                                   where the commission proposes that the debts
                                                   be purged because of the debtor's insolvency,
                                                   the request for tax debts to be written off is a
                                                   matter for the tax office. #For semi-fiscal debts
                                                   (TV licence fee), fines and Social Security
                                                   debts, the commission has no power to impose
                                                   repayment of the debt by instalments. At the
                                                   moratorium stage, it may propose that the debt
                                                   be suspended.#See art. L331-7-1 and the tax
                                                   directive of 5 February 1999 (see INC
                                                   brochure)##
no   yes; #The attachment of earnings procedure
     begins with a conciliation hearing before a
     judge at first instance. The judge may grant
     time for payment and check the validity of the
     claim. Where the claim is disputed, s/he
     examines the details of the dispute provided by
     one of the parties.#If the judge does not grant
     time for payment and if the debt cannot be
     repaid, attachment occurs during the following
     week. The employer is notified of the order.
     and the notice includes the percentage of the
     salary to be attached. The employer must send
     that amount every month to the court clerk's
     office (greffe du tribunal).##




no   yes; #Only a fraction of the salary can be
     attached. It is set by order and the scale
     applied takes into account the number of
     dependant children.#
yes; #Private debt collection is regulated by Act   yes; #The debt recovery profession is registered
of licence for debt collection (1999/517).          by décret no. 96-1112 of 18 December
Country government of South Finland admits          1996.#Costs of the huissier (sheriff) are set out
licence to debt collection and it‟s a premise to    in the décret of 12 December 1996. It should
practise professionally debt collection.    #       be noted that, in the overindebtedness
                                                    procedure, the debtor may be exempted from
                                                    huissier's fees if s/he informs the huissier in
                                                    time that s/he has lodged a file with the
                                                    overindebtedness commission.# #




#According to The Act of debt collection            #Yes, for huissiers#
(1999/513) must the debt cost be reasonable
regarding how much the debt is and how much
work has been done. The maximum debt cost
the courts accept is 60 € for an ordinary written
procedure.    #
#Private debt collection provides by The Act of      #The rule in relation to debt recovery is that
licence for debt collection and The Act of debt      the creditor is responsible for the fees. On the
collection. #The Act of debt collection has some     other hand, if there are proceedings for
restrictions that can be named. If the debt can      recovery of a debt, the debtor is responsible for
be collect by execution without a judgement          the costs but the judge may reduce them or
(e.g. some insurance) may the cost not exceed        write them off if they were unjustified or
12 €. Private debt collectors are not able to        excessive.##
collect public fees that can be collected by
execution without judgement.        #




#We have two important restrictions on wage          ##
garnishment based on The Act of execute and
The Decree of protect share of wages. The
necessary living expenses of the debtor must
be saved and the maximum that can be seized
is 1/3 of the net income. In addition, there is an
absolute minimum income which is
protected. #
According to The Execution Act the furnitures so
far as reasonable, the personal effects of the
debtor and his family in so far as reasonably
necessary, effects with emotional value if
reasonable and the working implements, for
example a car, and comparable items needed
by the debtor to maintain his livelihood
including school supplies for the children.




 #The Decree of protect share of wages             ## #
(1989/1031) is from 1989 and The Execution
Act (1895/37), chapter 4, section 5 (see 44) is
from 1997. #
yes#What is the legislation in your country that         yes#What is the legislation in your country that
applies to consumer bankruptcy? Please give the          applies to consumer bankruptcy? Please give the
name of the law:#Act on the Adjustment of the            name of the law:#The law on overindebtedness
Depts of a Private Individual       #Effective date of   of 31 December 1989 applies to all debtors who
this law: 8th of February 1993#                          are not subject to other legislation (such as the
                                                         laws relating to business or agricultural
                                                         insolvency).#However, the law of 1 June 1924
                                                         introducing French Company Law into the Haut-
                                                         Rhin, the Bas-Rhin and the Moselle
                                                         départements are still in force and may apply to
                                                         non-business debtors, who may choose
                                                         between the two legislative frameworks.#With
                                                         regard to the following questions, our vies is
                                                         that the law on overindebtedness
                                                         applies#dt##Effective date of this law:
                                                         Overindebtedness law: January 1990#




no#     #                                                yes; #Three consumer associations are asking
                                                         for the application of Bankruptcy in Alsace et
                                                         Moselle to all consumers#There is also a
                                                         proposal for registration of all loans and not
                                                         only those in default, and to include all default,
                                                         such as rent, tax, not credit alone.#With regard
                                                         to information requested by Government, the
                                                         Comité Consulatif du Conseil National du Crédit
                                                         et du titre (CNCT) has made proposals for
                                                         reform to improve preventative and remdial
                                                         approaches to overindebtedness. #See e-mail
                                                         text attached (except fpr annexes, which are
                                                         only available in paper form).#In addition, the
                                                         Sénat has recently (21/3/2003) adopted two
                                                         amendments with regard to
                                                         overindebtedness:#- strengthening legal
                                                         criteria governing the advertising of consumer
                                                         credit#- enabling overindebtedness
                                                         commissions to involve the judge to obtain
                                                         more rapid cancellation of interest on loans
                                                         concluded on exorbitant terms.# #Please give
                                                         the name of the draft etc.: #Report on the
                                                         prevention and treatment of overindebtedness
                                                         published in December 2002 (proposals of
                                                         consumer organisations are attached as
                                                         appendices).#
For the purpose of remedying the financial            In the Overindebtedness Law, the concept of
situation of an insolvent private individual          overindebtedness is defined as "the manifest
(debtor), a court may issue an order on the           impossiblility for a debtor in good faith to meet
adjustment of the debts of the said individual        his/her debts taken as a whole as they fall due
(debt adjustment) and confirm a payment               and payable." #Case law has attempted to offer
schedule which corresponds to the ability of the      guidance to overindebtedness commissions on
debtor to pay. #Insolvency means the other            the application of this definintion: the effect on
than temporary inability of the debtor to pay his     "minimum income requirements" is defined in
debts as they become due. The following shall         the Act. In other words, an individual is
be taken into account when assessing the              overindebted if repayment of debts reduces
ability of the debtor to pay:#1) the funds from       their minimum income requirement (the
the liquidation of the assets of the debtor;#2)       amount which cannot be seised or the Revenu
the income of the debtor and his earning              Minimum d'Insertion (income support level).#
potential, in view of his age, working capacity
and other circumstances;#3) the necessary
living expenses of the debtor;#4) the
maintenance liability of the debtor; and#5) the
other circumstances affecting the financial
status of the debtor.




Please explain the philosophy of your bankruptcy      Please explain the philosophy of your bankruptcy
legislation more detailed:#Fresh start is an          legislation more detailed:#Yes, since the reform
explicit goal. Debt liabilities for the rest of the   introduced in 1998 enabling debt to be written
deptors life can´t be be the best solution            off after a period of supervision of varying
neither for the deptor nor for the society.           lengths (a moratorium of a few months to a
That´s why a honest but unlucky or unskillful         maximum of three years) in cases of insolvency
person must some day have a chance to a new           ("the absence of resources or goods which can
start. However, we have even a strong tradition       be seised to enable all or part of his/her debts
that says that everyone have an absolute duty         to be purged").##
to pay back his depts. As a summary for these
different ambitions we have many assumption
and a quite long program before the debtor
gets a fresh start.#
yes; please describe this procedure more detailed:
#Before the deptor can get debt adjustment he
has to negotiate with his creditors. If the debtor
has neglected to determine the possibilities for
a negotiated settlement debt adjustment shall
not be granted.    #




no#    #                                             no#The procedure is not a judicial one if the
                                                     debts are not disputed. The role of the judge is
                                                     merely to ensure observance of the law. The
                                                     overindebtedness commission is the body
                                                     (consisting of representatives of the
                                                     government, creditors and consumers) which
                                                     prepares the plan for rescheduling the debts
                                                     and submits it to the judge for approval. The
                                                     procedure begins with a consent phase. ##




The debtor is responsible and if he has              #
neglected to determine the possibilities for a
negotiated settlement debt adjustment shall
not be granted. But the debtor can get help
from debt counselling.    #
Each municipalies must establish or ensure that   The government funds the operating costs of
free dept advisory counselling is available and   the overindebtedness commission. #
this way can the deptor get free help. On the
other side, the deptor can even use some other
way to get help and in these case the deptor
bears the costs himself.



?#                                                (From data gathered at the end of December
                                                  2002) :#Of 163,179 debt rescheduling plans
                                                  proposed by the commission, 32,876 were
                                                  rejected by the debtor or the creditor.#Of the
                                                  plans accepted by debtors and creditors, only
                                                  111,343 were approved by the judge.#The
                                                  success rate is accordingly 68%.##




We have no legislations about this. But it should In principle, the overindebtedness law gives the
not exeed considerably the 5 years prescribed     commission two months to set up the debt
in debt adjustment act.#                          rescheduling plan, but this time limit is not
                                                  always observed. #
Please explain in detail and give examples:#-#      Please explain in detail and give examples:##




Debt arrangement is confirmed by the local          In the context of the Overindebtedness Law,
court. The first question is on the admissibility   the enforcement judge intervenes in the
of the application. The admissibility is decided    following circumstances:#1- where there is a
on formal and material grounds. Formal              disupte as to the admissibility of the application
grounds refer to the debtor's non-business          to commence the procedure#2- where the
character, homestead etc. and, also to the          recommendations made by the commission are
required formalities concerning provided            rejected#3- to approve the recommendations,
information on debts, creditors, estate and         but the judge only has the power to check that
income. #The material conditions for                the law has been applied and not to adjudicate
arrangement can be divided into three groups;       on the economic viability of the plan.#4- the
1. debtor's insolvency, 2. quality and source of    judge must approve the phase in which the
the debtor's insolvency and 3. the debtor's         debts are purged. At that point, the judge
loyalty towards his creditors. The material         exercises his/her full powers, and adjudicates
conditions are valued by the court both in the      on the appropriateness and legality of the
admissibility test and before the final             measures proposed by the commission.# #
confirmation of the plan.#The court invites the
creditors either to an oral hearing or to present
their comments in writing on the claims the
debtor has disclosed as well as on the
arrangement he has proposed. The court is not
bound by the creditors' acceptance of the
proposal. If the debtor's proposal is accepted
the court will confirm a payment plan of
maximum five years. In special circumstances
there may be a plan with null payment.#The
duration of the payment plan may exceed five
The pre-court procedure -the deptors                 see the answers below.#To summarise, the
negotiations whith the creditors- is an              procedure is as follows:#1- the debtor lodges a
obligatory part of the court run. But the pre-       file with the overindebtedness commission
court system can even lead to a deal betveen         CS)#2- the CS makes free proposals: this is the
the debtors and the creditors. In this cases the     consent phase#3- if the consent phase fails to
court procedure is unneccessary. The content         resolve matters, the CS draws up a debt
of the pyment plan in pre-court negotiations is      rescheduling plan under the economic rules
not regulated.#                                      prescribed by law. If the plan is accepted, the
                                                     file is submitted to the judge for approval. If it
                                                     is rejected by the debtor or by one of the
                                                     creditors, the judge takes the file over and sets
                                                     the plan him/herself.#4- where there is
                                                     insolvency, the CS proposes a moratorium and
                                                     release from debts to the judge ##




A person may be appointed as administrator, if
he is an adult, is known for integrity, is not
bankrupt, is not subject to restrictions of
competence and consents to the appointment.
The administrator must have the competence,
skills and experience required by his duties. He
shall not have a relationship with the debtor or
any of the creditors which might compromise
his independence from the debtor or his
impartiality between the creditors.#A bailiff or a
deputy bailiff may be appointed as an
administrator, but it is not common.




#Yes. In the payment program can debts be            #Unless there is a situation of insolvency, when
adjusted both by reducing the amount of the           discharge from debts follows the moratorium
unpaid debt and by cancelling the debt               phase, the CS can make a number of
completely. The discharge has no effect on co-       rescheduling plans until the debt is settled.
debtor´s or personal guarantor´s liability.#         Where there is a reduction in the available
                                                     financial resources, the debtor can ask for the
                                                     plan to be revised.##
The Legal Register Centre maintains a register   no
of matters pertaining to the adjustment of the
debts of private individuals and everyone shall
have access to the information in the register.
Information is removed -when the debt
adjustment´s over- from the register.
Information remains in a register from which it
can only be relieved for the purpose of checking
the bar on subsequent debt adjustment.#




After the start of debt adjustment, no measures      Lodging the file with the CS does not
shall be directed at the debtor to collect a debt    automatically result in debt recovery measures
subject to the stay on payment or to secure its      being put on hold. The CS or the debtor must
payment. Measures already begun shall be             transfer responsibility for enforcement to the
discontinued. The stay on collection provided        judge for civil debts, and to the tax office for
herein includes, but is not limited to, the          fiscal debts.#
following:#1) the use of a right of liquidation or
repossession based on collateral and the other
use of collateral in order to receive
payment;#2) calling the debt and termination
or rescission of the underlying contract due to
late payment, except for the termination or
rescission of an overdraft facility in order to
prevent the incurring of new debt;#3) set-off
between the debtor‟s receivables from and
debts to the creditor, except for the set-off
referred to in the Tax Collection Act.#After the
start of debt adjustment, the assets of the
debtor shall not be distrained for adjustable
debts, with the exception of privileged
maintenance debt
Debtor's insolvency: The debtor is insolvent if        - the person starting the procedure must be a
he can not pay his debts as they become due            natural person acting in good faith (in respect
and this situation is not incidental. #Quality and     of the application to start a procedure) #- being
source of the debtor's insolvency: An                  overindebted through business debts (even if
arrangement can be confirmed if either of the          business debts are taken into account in the
following conditions is fulfilled. The insolvency is   rescheduling plan) #- the debtor must not be
mainly due to unemployment, illness or other           eligible for another procedure (laws of 1 March
like change in circumstances which cannot be           1984 and 30 December 1988)#- it is not
attributed to the debtor and there is no               necessary to have stopped payments: the debts
reasonable way in which he could improve his           must have fallen due for payment #- a person
solvency.#The debtor's loyalty towards his             who is potentially insolvent, who has had their
creditors: The alternate condition is that the         debts purged, cannot lodge a new file for a
reason of insolvency is different but there are        period of 8 years#
other weighty reasons for the arrangement
when the amount of debt is taken into account.
Typical example of the latter condition is the
case of a former business bankrupt. Also in the
latter case it is required that the debtor can not
reasonably improve his solvency in any other
way.




The mortgages are included in the proposed             For rented accommodation, see question
debt arrangement. Only that part of the debt           36.##The property owner is better protected
which the value of the security covers at the          because the fact of being a homeowner does
moment when the procedure is opened is                 not lead to automatic sale. The
considered secured. The value exceeding the            overindebtedness commission or the judge has
value of the security is treated as unsecured.         to demonstrate that the sale is necessary,
The debtor should be able to pay the secured           which would not be the case if the debtor will
debt according to the original contract or with a      have to spend a sume equivalent to his/her
minor extension affirmed by the court. If he is        monthly loan payments to obtain
not able to do so the creditor may seize the           accommodation.#There can be no forced sale
security. The value of the home is estimated by        because the procedure is voluntary in nature.
the court.#If the debtor lives in a rented home        If the debtor refuses to sell, the file is closed.
the rent is be taken as a part of the nesessary        The debtor must have recourse to common law
living costs in provided that the home isn´t           proceedings. If the debtor agrees to a sale,
bigger and more expensive than                         there may be a remission of the debts if the
resasonable.                                           sale price is insufficient to repay the debts.#
If the asset is such that debtor may keep it
(see 69), a collateral in them can in principle
surviive debt adjustment.




None.                                             Arrears of maintenance are always excluded
                                                  from both debt rescheduling plan and in the
                                                  plan for purging the debts. #Business debts
                                                  are not excluded, nor are debts owing to public
                                                  officers (huissiers)#Tax debts are not excluded
                                                  either (see above)#Debts arising from the
                                                  criminal law system (fines) are excluded (article
                                                  708 of the Code de Procédure Pénale - Penal
                                                  Code) #




Allmony to a child. Debts for necessary living    The law does not provide for a hierarchy of
expenses of the debtor; under the discretion of   creditors, nor for equality. The commission
the court.                                        must decide what is in the best interests of the
                                                  debtor or certain creditors: whether to give
                                                  preference to debts associated with a tenancy
                                                  to avoid eviction, to protect small, non-
                                                  commercial lenders, to ensure repayment of
                                                  small loans. The commission may also punish
                                                  creditors who have some responsibility for the
                                                  indebtedness by asking them to make a greater
                                                  contribution.#See above for tax debts.#
The debtor is required to devote all of his          The commission must calculate the amount of
income that is not necessary for living expenses     salary exempt from seizure and the RMI,
to pay to his creditors. The necessary living        whichever is the greatest. However, the
expenses are counted as in the minimum social        calculation of the amount exempt from seizure
aid contributions.                                   is less favourable to the debtor since the Cour
                                                     de Cassation (national Appeal Court) held that
                                                     the calculation should not be made in
                                                     accordance with common law. #The scale for
                                                     attachment of earnings and income is applied.
                                                     This may encompass sums other than earnings,
                                                     such as family allowances or services, see
                                                     above.#




The debtor has rigt to keep nesessary tools and      The list is contained in the "endettement et
a car can be ones. Still the value of the car        surendettement", accessible on the
must be reasonable and if it´s too expensive         Internet:#http://www.inc60.fr/page/bases.2_le
the debtor must change it to a cheeper one           s_guides./Action-detailguide/guide-1151-
(section 5 subsection 2, Act on the Adjustment       Endettement_et_surendet.xml.
of the Debts of a Private Individual, 57/1993).




Minimum duration: #Minimum duration is not           Minimum duration: #There is no
stipulated. Court practice is very strict abiut      minimum#Maximum duration: #The CS must
planss less thaan 5 years.#Maximum duration:         reschedule or delay for a period eight years or
#Maximum time is five year and its even the          for current borrowings over half of the
usually time. If the debtor keeps his home is        outstanding repayment period. #If the term
the maximum duration 10 year.#Exceptions:            has expired, the time period may be up to half
#The time of payment can be extended with 4          of the time left to run prior to default.
mouths for covering the fee and expenses of          ##Exceptions: #No exception#
the administrator. If the creditor is a private
individual (private creditor), the duration of the
payment schedule may upon his request be
extended by at most two years from the time
when it ends as regards other ordinary debt. #
The fees depend on the number of debts.#1-4    no fees, no trustee#
debts 380 €; 5-14 debts 480 €; and over 16
debts 670 € plus excises.#The cost of copies
and postages been added. #




The debtor shall cover the fee and expenses of #
the administrator to an amount not exceeding
the available funds of the debtor over the four
months following the confirmation of the
payment schedule. The amounts may be taken
also from funds received by the debtor after the
start of debt adjustment. The part of the fee
and expenses of the administrator not covered
by the debtor shall be paid from state funds.#

No.
yes; #Act of Economy and Dept Counselling        yes; #Agents offering to set up a repayment
2000/713 abouth free debt advisory.#             plan and to negotiate with creditors for
                                                 remuneration are prohibited #(see code de la
                                                 consommation L.321-1)##




The municipalities have to establish or ensure   Intermediaries are the only ones prohibited for
that free debt advice is available, offered by   the purposes below..#Consumer associations
themselves or by some non-commercial body        can help and social workers may give advice
but even from a private organisation. It can     and assistance to debtors. However, helping an
even ben arranged by several municipalities      overindebted person must be free of charge.
together.                                        Only lawyers can be remunerated for services
                                                 before the overindebtedness commission or the
                                                 judge.#
The law stipulates that dept advice can be   Only legal advice is regulated and must be
given by a person who have the skills and    provided by or under the supervision of
experience required by his duties.#          qualified persons.##




The ones municipalities arrange.#            There is no agency.#
1. To give private persons general advice on
budgeting and abouth how to take care of debts
#2. To help planning their households#3. To
settle problems connected with the debtors
economy and a way out. To help the deptor
when he tries to reach an agreement whit his
creditors#4. To assist the deptor whith the
petitioning for debt adjustment, with the
accounts and documents and#5. Lead the
debtor to seek legal aid when nesessary.




Yes. The Act on Legal Aid requires that the        Yes, but access to legal assistance does not
debtor has to be in need of a lawyer. If she get   take overindebtedness into account, because
help from debt councellor and the case is not      income, not financial position, is taken into
complicated, a free lawyer is not appointed.#      account. This frequently excludes overindebted
                                                   people.##
#The debt counselling municipalies have to             #Yes , see French report for CEE#
establish as the Act of Economy and Debt
Counselling stipulates includes financial
education for overindepted people.#




1) Consumer credits can be grant by at least           .) Which institutions in your country are entitled to
 -Banks                                                grant consumer
 -Finance companies                                    credit?
 -Credit card companies                                Please enumerate the institutions, e.g.
                                                       * banks
2) The Financial Supervision Authority (FSA), in       * insurance companies
finish Rahoitustarkastuskeskus (RATA) is supervision   * finance companies
of banks. Consumer Credits rates can even been         * non for profit organisations (name?)
controlled by the Consumer ombudsman.                  * state agencies
                                                       * credit unions
                                                       * money lenders
                                                       * credit card companies

                                                       We can distinguish 3 main categories of lenders :
                                                       - the banks (shareholding)
                                                       - the mutual benefit banks
                                                       - the financial companies

                                                       2.) Who is in charge of supervision of the afore
                                                       mentioned lenders?

                                                       Several institutions are in charge of supervision :
                                                       - the government (ministry of finance) for making
                                                       rules
                                                       - the banking board (CB="commission bancaire") for
                                                       controlling the respect of rules
                                                       - the credit and investissement companies committee
                                                       (CECEI="comité des établissements de crédit et des
                                                       entreprises d'investissements") for agreement.
                    Germany                                          Great Britain

#                                                 Please see Attachment Q1##The principal
                                                  legislation is:-# Consumer Credit Act 1974;
                                                  and#Insolvency Act 1986, as amended by the
                                                  Enterprise Act 2002l




1. Consumer Credit                                    #http:// www.legislation.hmso.gov.uk/#(post
Legislation#http://dejure.org/gesetze/BGB#2.       1988 legislation and statutory instruments)#
Consumer Bankruptcy
Legislation#http://dejure.org/gesetze/InsO#3. Any
other relevant
Legislation#http://dejure.org/gesetze/ZPO##http://
#
1. Consumer Credit#- Reifner, Handbuch des      Please see Attachment Q1
Kreditrechts: Verbraucherkredit und Realkredit,
                                     nd
C.H. Beck Publishers: Munich 1991 (2 Edition
forthcoming 2004)#- Schwintowski/Schäfer,
Bankrecht: Commercial Banking - Investment
Banking, Carl Heymanns Publishers: Cologne
1997#- Schimansky/Bunte/Lwowski,
Bankrechts-Handbuch (Volume 1-3), C.H. Beck
Publishers: Munich 2001#-
Rösler/Mackenthun/Pohl, Handbuch
                 th
Kreditgeschäft, 6 Edition, Gabler Publishers:
Düsseldorf 2002#- Rösler/Wimmer/Lang,
Vorzeitige Beendigung von Darlehensverträgen,
C.H. Beck Publishers: Munich 2003#2.
Consumer Bankruptcy#- Wimmer (Ed),
Frankfurter Kommentar zur Insolvenzordnung,
 rd
3 Edition, Luchterhand: Neuwied 2002#-
Münchener Kommentar, Insolvenzordnung
(Volume 1-3), C.H. Beck Publishers: Munich
2001-2003#- Kübler/Prütting (Eds),
Kommentar zur Insolvenzordnung, (Volume 1
and 2), RWS Publishers: Cologne, November
2002#3. Any other field of law relevant to the
below mentioned questions




yes#1. Consumer Credit#- iff, Consumer Lending and            yes#Please see Attachment Q3#Please provide a
Overindebtedness among German Households, Expert report       copy or indicate where the material is
on the instructions of the DG XXIV of the European            available:#http://www.dti.gov.uk/ccp/topics1/consumer_
Commission, Hamburg 1998#- iff, Harmonisation of Cost         finance.htm#ec##http://www.dti.gov.uk/ccp/topics1/overinde
Elements of the Annual Percentage Rate of Charge,
                                                              btedness.htm#
European Project AO-2600/97/000169, Hamburg 1998#2.
Consumer Bankruptcy#- iff, Treuhandphase und
Wirksamkeit von Lohnabtretungen, Research study on behalf
of the Federal Ministry of Justice, Hamburg 2001#- iff, Das
Verbraucherinsolvenzverfahren: Anforderungen an ein
interessenwahrendes, sozialverträgliches Konzept, Research
study on behalf of the "Arbeitsgemeinschaft der
Verbraucherverbände e.V.", Hamburg 2000#-
iff/Verbraucherzentrale Hamburg/Schuldnerberatung
Salzburg/Money Advice Trust, Overindebtedness of
consumers in Europe: Are extra judicial proceedings the
solution?, European Project 97/C277/04, Hamburg 1999#-
Veit/Reifner, Außergerichtliches
Verbraucherinsolvenzverfahren (Editor: Federal Ministry of
Justice), Bundesanzeiger Publishers: Cologne 1998#3.
Overindebtedness, poverty#- Korczak, Überschuldung in
Deutschland zwischen 1988 und 1999 (Editor: Federal
Ministry for Family, Seniors, Women and Youth),
Kohlhammer Publishers: Stuttgart 2001, ISBN 3-17-017237-
A matter within the competence of the Federal    Depatment of Trade and industry,#Office of
Ministry for Family, Seniors, Women and Youth    Fair Trading
is prevention of poverty.#The Federal Ministry
of Justice has the legislative jurisdiction.#




no##                                             yes; #See Q1 above and Attachment Q1#
                                                  no




yes; #1. Current legal position#Consumer          yes; #Consumer Credit Act 1974#
credit law was revised by the legislation
modernising the Law of Obligations, introduced
on 26 November 2001 (BGBl. I 3138) in §§ 491-
505 of the Bürgerliches Gesetzbuch (BGB -
German Civil Code), and this applies to all
credit agreements concluded since 1 January
2002. Credit agreements concluded previously
are governed by the version of the
Verbraucherkreditgesetz (Consumer Credit Act)
introduced on 29 June 2000 (BGBl. I 940).#§§
491-505 BGB distinguish between: #-
Consumer loan agreements (§§ 491-498
BGB);#- Assistance with finance provided by a
company to a consumer (for example deferred
payment) (§§ 499-504 BGB);#- Agreements
for payment by instalments between a company
and a consumer (§ 505 BGB).#In addition to
the Verbraucherkreditgesetz, the BGB also
includes other legislation, among which are the
Act governing withdrawal from door-to-door
sales agreements, the Haustürwiderrufsgesetz
(§§ 312, 312a BGB), the Act governing distance
sales, the Fernabsatzgesetz (§§ 312b-312d
BGB) and the Act regulating General Terms and
Conditions, the Gesetz zur Regelung des Rechts
der Allgemeinen Geschäftsbedingungen
no#No interest rate thresholds are set by              no#The rate of interest in a regulated consumer
legislation. It applies the principle of contractual   credit agreement is subject to judicial
freedom. An effective system of control has,           interpretation of an 'extortionate credit bargain'
however, been developed in the courts through          in accordance with consumer credit protection
use of the German Civil Code, particularly §           legislation#See Attachment Q8#
138, para.2 (usury limit). (Please see answer to
question 13.)#

10,36 % p.A. (April 2003)




See answer to question 8.#                             No maximum, see Attachment Q8. ##
See answer to question 8.#                     None, see Attachment Q8#




See answer to question 8.#                     None, see Attachment Q8#




The banks determine the interest rates, but see n/a, but see Attachment Q8#
answer to question 8.#
#Interest rates which exceed double the             #There is a wide discretion available to the
average of the market rate are against "good        Courts to re-open the credit agreement (section
morals" and such credit contracts are held to be    139 CCA 1974)#
void.#The German Bundesbank monitors on a
monthly basis movements in interest rates for
mortgages, instalment credit and overdrafts. It
also calculates and publishes averages in these
sectors. #In 1981, the courts introduced a
complementary principle to the "double the
average" criterion. In a period of high interest
rates, they were prepared to intervene in cases
where the interest rates charged were 12 %
p.a. higher than the average prevailing level
(see for example jurisdiction of the Federal
Court of Justice: BGHZ, 110, 336). #The courts
do not rely exclusively on quantitative criteria.
They are prepared to intervene in cases below
the "double the average" level if contracts are
thought to contain "oppressive" terms.#Apart
from § 138 of the German Civil Code, further
protection is afforded by § 817. Under this, if a
contract is found to offend against good morals
it is unenforceable and, effectively, the
borrower gets the credit free of interest and
other costs apart from insurance.#The banks
have tried to attack this jurisdiction, for
#§ 4 of the German Consumer Credit Act              #Consumer Credit (Total Charge to Credit)
(applying to contracts signed before 1 January,     Regulations 1980 requires certain matters to be
2002) or §§ 492, 502 of the German Civil Code       inculded in the costs declared to the
(applying to contracts signed after 1 January,      debtor.#See Attachment Q14#
2002) regulate the obligation to inform the
borrower. The contract has to disclose the
following information:#- net credit amount,#-
total amount of all instalments the borrower
has to carry out due to redeem the credit and
to pay the interest and all other cost
elements,#- conditions of repayment or
termination of the contract,#- interest rate,#-
cost elements like handling fee, commission,#-
(initial) annual percentage rate,#- insurance
premiums linked to credit contracts, especially
payment protection insurances
("Restschuldversicherung"/residual debt),#-
security of credit.#
Besides the fact that written form is mandatory,      Individual creditors will adopt a variety of
there is no special form prescribed by law in         measure to provide information to the debtor,
which suppliers have to enter their cost              but the cost information will in paratice be
elements uniformly. There are banks who offer         incorporated into the total charge and
a comprehensive form while others seem either         repayment terms provisons of the credit
to be interested in hiding cost elements or just      agreement
do not care for their disclosure.#So, there are a
number of problems of information in credit
contracts. For example although all contracts
contain the indication of the annual percentage
rate (APR) it is quite difficult to detect which
interest rate shall represent the APR. It is
normally written in the same form as other
interest rates and therefore disclosed together
with the rate for credit cost which is also given
as a monthly rate. The verification of the APR is
extremely difficult because no contract explicitly
states which cost elements have been used to
calculate the APR. This is especially true if
insurance premiums are financed together with
the credited amount. In some credit contracts
insurance premiums are not visible in the credit
contract itself but only if a copy of a special
insurance contract is added. While fixed
instalment credit has the most individualised
#Rights to information which go beyond the            #   #
named EU Directive are:#1) Information as to
rights:#§§ 495, 355 BGB (or § 7 VerbrkrG)
include a right of withdrawal and prescribe the
form to be advised of that right in the deed.#2)
Information as to price and costs:#The net
credit amount must be stated (§ 492, para.1
no.1 BGB or § 4, para.1 VerbrKrG). According
to § 491, para.2 no.1 BGB (or § 3, para.1 no.1
VerbrKrG) the legal definition is given as the
actual amount of credit paid to the consumer.
This clarifies to consumers the common practice
of deducting some of the costs and fees from
the amount of the loan before it is paid over.
The credit net amount enables consumers to
compare the amount they have to repay with
the amount they actually receive. The
difference between the total amount of the
instalments to be paid and the credit net
amount corresponds to the total amount paid
by consumers for credit. However, this tells
consumers nothing at all about the actual
commitment they are taking on in relation to
their liquidity, so it is of little significance in
terms of the prevention of
overindebtedness.#3) Formal requirements in
Within the field of consumer credit there is no     No
legislation which explicitly states that lenders
have a duty to inquire about the solvency of
their clients. But this does not mean that these
inquiries are not made before the granting of
credit, although the consumer credit business is
standardized.#The extent of the investigation
of the creditworthiness depends on the amount
of credit. In principal the client has to prove his
monthly salary or other assets. He has to
disclose his current expenses and financial
obligations. The credit institution will make
inquiries at the German General Credit
Protection Association (SCHUFA, please see
answer to question 19).#Some credit
institutions specialised on consumer credit (i.e.:
NORIS Bank) use a standardized software
programme to investigate the
creditworthiness.#

#A specific provision does not exist in German       #No#
law, but the general legal principle of "bona
fide" can apply.#Improvident or reckless credit
extension could be considered as contrary to
good faith. The german courts have developed
the lenders' obligation to give information and
to advice on the basis of the general rule
contained in § 242 BGB which expresses the
notion of good faith. This obligation is justified
by the expertise and experience enjoyed by the
lender and by the need to protect the
borrower.#
yes; #The General Credit Protection Association      no#Private Credit Reference Agncies exist such
("Schutzgemeinschaft für allgemeine                  as: - #Equifax
Kreditsicherung" - abbreviated SCHUFA) works         PLC#http://www.equifax.co.uk#Experian
as the central german credit reference system.       Ltd#http://www.uk.experian.com/consumer/con
(See also:                                           sumer_main.html#see Attachemnt Q19##
http://www.schufa.de/unternehmen.html)#Cred
it institutions and other companies set up this
central organisation in 1927 for collection and
supply of data on
creditworthiness.#Approximately 5000
companies have become member of the
SCHUFA. These are business companies
granting commercially bank or trade credit to
consumers, especially credit institutions,
savings banks, credit card companies, leasing
companies, telecommunication and energy
suppliers, mail-order houses. From that the
main consumers' areas of life are
concerned.#The member firms are obliged to
transmit information about their clients to the
SCHUFA and vice versa. The SCHUFA collects
also autonomously data out of public lists of
debtors.#According to the information given by
the SCHUFA itself their data bank consists of
299 million particular data relating to 57 million
individuals.#
The SCHUFA is organised on a private                 Privately Organised, self regulated by the
enterprise basis and signs as "SCHUFA Holding        Creedit Industry and supported by government,
AG". It is a profitable business enterprise.#        but there is a requiremnt to obtain a Consumer
                                                     Credit Licence in order to operate
The SCHUFA registers defaults of payment            default registration
("negative registration") and gives information
on the credit rating to its member firms
("positive registration").#Negative
characteristics being registered are for
example: #- application for a default order,#-
debtors' protest against writ of execution,#-
withdrawal of credit,#- misapplication of credit
cards.#It should be taken into consideration
that "misapplication of credit cards" is not
based on objective observations but just on
indivudal estimations of a member firm. #In
1996 the SCHUFA has introduced a new scoring
procedure. The SCHUFA determines a score out
of all data which the SCHUFA has collected to a
person. The score should inform a member firm
about the statistical default risk of a client. The
client himself has no possibility to receive his
score.#Especially this new scoring procedure
makes the limits of effective data protection
visible. The affected clients don't have effective
possibilities to control which personal data are
stored and how their score will be used. #Since
the Federal Data Protection Act
(Bundesdatenschutzgesetz - BDSG) was
enacted in 1978 everybody has a right to know
about the contents of his personal file as well as
See answer to question 21.                        inaccurate data, #improper use of data




The Federal Court of Justice (Bundesgerichtshof only parties to the contract are liable on it#
- BGH) has developed unified principles for the
co-liability of relatives (see BGH - XI ZR
248/99, in: Neue Juristische Wochenschrift
2001, 815).#The new jurisdiction applies to
spouses, children, parents, fiancés and partners
of extra-marital cohabitations.#According to
this new jurisdiction the validity of a loan
guarantee depends on the "emotional
closeness" ("emotionale Verbundenheit")
between the financially overstrained guarantor
and the principal debtor. If the guarantor will
be extremely overstrained ("krass überfordert")
by the loan guarantee, it will be presumed that
#- the relative has assumed a guarantee only
because of his emotional closeness to the
principal debtor and not because he or she has
assessed the interests and economic risks on a
rational basis,#- and that the credit institution
has take undue advantage of this emotional
closeness. #This presumption can be
rebuttled.#The guarantor will be extremely
overstrained if he or she for example will not be
able to fulfill his current interest
payments.#These new principles also apply to
other commercial or professional lenders.#
The loan guarantee or joint liability is a         n/a
transaction contrary to public policies and is
void. The transaction is null and void (§ 138
BGB) or exceptionally partially null and void (§
139 BGB).#




                                                   none
yes; #The statutory maximum default interest          no#No, but see Q8 above#
rate for consumer contracts is 5 % above the
base rate (§ 288, para.1 BGB). The current
base rate is 1,97 % applicable since 1 January,
2003. #In the case of agreements among
business enterprises the statutory maximum
default interest rate is 8 % above the base rate
(§ 288, para.2 BGB).#The creditor can claim a
higher default interest rate for other legal
grounds (§ 288, para.3 BGB). The contracting
parties can stipulate that the agreed interest
rate shall also apply to the case of default.
Although the Federal Court of Justice has
developed the principle that the obligation to
pay the agreed interest rate ends with the
acceleration of the credit. Incidentally the
prohibition of usury has to be observed.#The
statutory principles do not apply, if the lender is
able to prove a higher damage or if the
borrower can prove a lower damage (§ 497,
para.1 BGB). #

#The creditor is not allowed to charge interest       #none#
on default interest (anatocism, § 289, sub-
para.1 BGB). #This prohibition does not exclude
a claim for damage caused by default (§ 289,
sub-para.2 BGB). In case of consumer credit
the admissible compensation may not exceed
the statutory interest rate of 4 % p.a. (§ 497,
para.2, sub-para.2 BGB). #Partial amounts the
debtor will pay have to be charged against#-
cost of bringing an action,#- amount due and#-
interest.#This chronological order is mandatory
(§ 497, para.3 BGB). #Default interest have to
be booked on a separate account (§ 497,
para.2, sub-para.1 BGB).#§ 497 BGB does not
apply to mortgage loans.#
Since 1 January, 2002 the creditor has two         A regulated consumer credit agreement must
rights for termination without notice:#1) The      be in default. This defaut may relate to any of
debtor's financial circumstances or the value of   the conditions of the agreement#For other
his collaterals deteriorate considerably or this   credit agreements the creditor must give 7 days
situation threatens, which might endanger the      notice.#The Banking Code requires that
credit repayment (§ 490, para.1 BGB).#2) In        termination of any acount is done on 30 days
case of instalment credits the debtor has to be    notice#
in default with a minimum of 2 instalments
(wholly or partly) or with a minimum of 10% of
the nominal amount (5 % in case of duration of
more than 3 years) (§ 498, para.1 BGB). #The
relationship between both regulations and the
legal consequences of § 490, para.1 BGB are
disputed. It is for example unclear whether a
creditor may terminate without notice due to
the debtor's unemployment or insolvency of his
employer? The German (Savings) Banks,
anyhow, have already incorporated the wording
of § 490, para.1 BGB into their general terms
and conditions.#Consumer organisations and
related legal experts therefore demand, that
early termination according to § 490, para.1
BGB assumes that the requirements set by §
498, para.1 BGB are satisfied. The jurisdiction
must be waited for.#




#1) § 490, para.1 BGB states no further steps    #The Creditor in a regulated credit agreement
the creditor has to take. #2) § 498, para.1 BGB must serve a default notice, identifying the
demands a minimum time limit of 2 weeks to       default and requiring that it be remedied giving
settle the outstanding payments together with    time for that to be done of at least 7 days#
the notice that the creditor will accelerate the
total remaining debts otherwise.#
yes; #Credit intermediation is regulated under   yes; #Intermediaries may require a Consumer
§§ 655a-e BGB (or §§ 15-17 VerbrKrG applying     Credit Licence in order to operate, but
to contracts signed before 1 January,            otherwise are governed by the contract
2002).#These provisions do not regulate          between them and either the debtor or the
maximum fees. Their legality is subject to the   creditor using their service.#
general provision of § 138 BGB ("good faith"
and "usury").#The remuneration is dependant
on the successful intermediation.#




#Credit intermediation is a regular subject of     #Only that which exists in the contract between
the jurisdiction. The questions of law refer to    the parties#
problems like "constructive notice", "violation of
the Federal Legal Advice Act", "usury". The
market of credit intermediaries is, however, still
"a market of black sheeps".#The regulations,
mentioned in the answer to question 30, are
not sufficient for an effective supervision. #The
advertising of intermediaries is aggressive and
misleading ("credit without SCHUFA-inquiry",
"debts are no obstacle"). #A working group
established by debt counsellors, called "Working
group loan sharks", observes the behaviour of
credit intermediaries. The working group
informs the Federation of German Consumer
Organisations (vzbv) about conspicious
behaviour. The vzbv will decide to suit
intermediaries.#
no#The general principles as "breach of duty         no#    #
prior to contract" (culpa in contrahendo) and
"positive violation of contractual duty" (posivite
Forderungsverletzung) will apply. If the
intermediary has neglected his duty to inform
and to advice, he is liable for damages.#




                                                     no#All forms of consumer credit that are
                                                     subject to regulation are regulated under the
                                                     Consumer Credit ACt 1974#
no




no#   #
yes; #If the court makes an order for eviction it   yes; #Protection from Eviction Act 1977, but
may grant the tenant a period of grace not          this only requires that the Landlord takes court
exceeding one year (§ 721 ZPO - Code of Civil       proceedings in order to enforce any right of re-
Procedure). #If the scope of § 721 ZPO is           entry, and to obtain an Order for Posession.
exhausted, the debtor may claim for protection      The legislation does not govern the grounds on
from execution under § 765a ZPO. According to       which the Landlord may claim such right of re-
this general regulation the enforcement             entry, just its exercise.#
measure has to be suspended, if the eviction
constitutes an unreasonable hardship.#




yes; #Various regulations in Federal and Land       no#    #
Law provide facilities of payment. If the the
payment would constitute an unreasonable
hardship, the debtor may claim for#-
settlement, #- prolongation of payment,#-
abatement of a fee, #- release (wholly or
partly) or#- payment by
instalments.#Examples: #- Tax arrears:
release (wholly or partly) under § 227 AO
(Abgabenordnung/Tax Code).#- Fines: law
enforcement authorities may decide on facilities
of payment after the final judgement (§ 459a
StPO - Strafprozessordnung/Code of Criminal
Procedure).#- Fee arrears: Federal and Land
Budgetary Regulations provide different
facilities of payment.#
yes; #Assignment of wages is not regulated          yes; #any deduction from wages by an
under a special provision. The jurisdiction has     employer are subject to an express prior
derived assignment of wages from § 398 BGB          written agreement of the employee, or
(Civil Code) which originally regulates             alternatively by court order pursuant to an
assignment of claims.#Unlike other special          attachment of earnings order for the
provisions regulating credit collaterals (i.e. §§   enforcement of a judgment debt.#There is no
765 ff. BGB: loan guarantee, §§ 11.. BGB: land      restriction on the debtor otherwise assigning
charge) § 398 BGB does not determine rights         their wages #
and obligations and especially not protected
privileges.#




yes; #Consumer credit contracts provide a           yes; #Deduction from wages, pursuant to the
standardised assignment of wages-clause.#In         Employment Rights Act 1996, must be in
1989 the Federal Court of Justice has               writing, signed by the employee before the
determined requirements of an effective             relevant deduction is made.#There is a
standardised assignment of wages-clause:#-          restriction on the amount of deduction that can
objective and volume of the assignment must         be made by an employer for matters such as
be specified unmistakebly,#- the clause must        stock shortages in retail employment#An order
include a release declaration,#- unmistakebly       for the Attachment of Earnings is subject to the
regulation of the conditions to realize the         Courts discretion on the creditors application to
security.#For more details please read the          enforce a judgement debt#
judgement: http://www.money-
advice.net/index.php?id=9&searchid=1&offset=
0#The debtor may avoid his assignment due to
his credit contract being contrary to good
morals (§ 138 BGB).#
yes; #The collection business is subject to the       no#codes of practice for members of relevant
"Rechtsberatungsgesetz" (Legal Advice Act).           trade bodies #
#Debt-collecting agencies have to be licensed
pursuant to Article 1 § 1 para.1 no. 5 Legal
Advice Act. The license is granted by the
president of the "Amtsgericht" (Local Court) or
"Landgericht" (Regional Court). The license is
limited to out of court debt recovery. #The
collection business has to be registered at the
Trade Supervisory Office (§ 14 of the Industrial
Code). #




#The Federal Code of Lawyers' Fees                    #no, Private collection is not regulated, but any
("Bundesgebührenordnung für Rechtsanwälte" -          demand for costs of collection must be in
BRAGO) determines the level of remuneration           accordance with the contract between the
for lawyers. The upper limit of the lawyers' fees     Creditor and Debtor. The courts retain ultimate
applies to debt-collecting agencies due to § 254      discretion on whether to uphold any contractual
of the Civil Code (BGB). § 254 of the Civil Code      provision under relevant consumer protection
regulates contributory negligence. According to       legislation if the matter is brought before them,
that the creditor is obliged to mitigate his loss.    which is not a requirment#
If a creditor had instructed a collecting agency
and if he had to prosecute a claim nontheless,
he has to bear the additonal costs (collection
fees). If the creditor can foresee that he has to
consult a lawyer, i.e. because the debtor is
visible insolvent, the debtor is not obliged to
pay renumeration for the lawyer and the
collecting agency. Debtors therefore have to
bear collecting fees only if the collection service
has been proper and promising.#
#Please see answer to question 40.#                #No#




#There are restrictions on attachments of the      #see Q39#
earnings of debtors. All debtors are entitled to
a certain statutory level of income which is
exempt from attachment, based on their
essential outgoings (see § 850c
Zivilprozessordnung - ZPO/Code of Civil
Procedure). Income exceeding this level may
be attached in full. #The following matters
must be taken into account in the calculation of
earnings: #- certain elements of income cannot
be attached (eg. child maintenance, housing
benefit),#- certain elements of earnings can
only be attached in part (eg. Christmas bonus,
overtime pay).#The element of income exempt
from attachment may be increased on
application of the debtor to the court, in
particular to prevent the debtor becoming
reliant on social security payments or to take
into account special personal or work-related
needs on the part of the debtor (§ 850f
ZPO).#Once the exemption levels have been
raised in favour of the debtor with effect from
1.1.2002 (see question 45 for further
information), it may be assumed that the
number of applications brought under § 850f
ZPO will be significantly reduced or courts will
Besides question 43 not all moveable goods can      None, save under bankruptcy laws which
be seized. § 811 of the German Code of Civil        protects general necessities and tools of the
Procedure for example explicitely exempts from      debtors trade from execution.#The Insolvency
seizure goods essential for a reasonable but        Act 1986 also provides limited protection for
modest standard of living or any other interests    dependents of the debtor living in the debtors
warranting protection. Unseizable are for           home, restricting the right of the Official
example kitchen utensils, domestic appliances,      Receiver or Insolvency Practitioner appointed to
radio and tv set, domestic animals. The legal       force a sale of the debtors home until at least
phrase "modest standard of living" has to be        12 months have passed since the declaration of
interpreted up to date. #Everything belonging       bankruptcy
to the minimum subsistence level in terms of
the German Federal Social Security Act is
unseizable.#




 #1. After 10 years the german legislator raised    #No#
the protected earnings rates up to which an
amount is exempt from attachment. The new
protected earnings rates are effective since 1
January, 2002. Before that, the level of the
unseizable earned income moved below the
social welfare assistance level. Consequently,
the number of applications according to § 850f
of the German Code of Civil Procedure (see
answer to question 43) increased
continously.#2. The protection of the private
bank account is incomplete. The law (§ 850k of
the German Code of Civil Procedure and § 55 of
the German Code of Social Law I) does not
prevent double account seizing and their lasting
effect. A majority of the banks uses account
seizings as an opportunity for termination of the
bank account. The Federal Ministry of Justice is
discussing an improvement of the protective
regulations. #
yes#What is the legislation in your country that    yes#What is the legislation in your country that
applies to consumer bankruptcy? Please give the     applies to consumer bankruptcy? Please give the
name of the law:#Insolvency Act                     name of the law:#Insolvency Act 1986#Effective
(Insolvenzordnung - InsO) of 5 October 1994         date of this law: 25 July 1986#
(BGBl 1994 I, 2866), last changed by the law of
13 December 2001 (BGBl I, 3574,
3576).#Consumer Bankruptcy is just a part of
the Insolvency Act (§§ 304 ff. InsO), which is
primarily geared to the needs of insolvent
companies and not of insolvent
consumers.#Effective date of this law: 1 January,
1999#




no#Although debt advice agencies, creditors,        yes; #Inslovency Act 1986 is in the process of
lawyers and judges share the opinion that the       amendment as set out in the Enterprise ACt
consumer bankruptcy procedure (the                  2002#Please give the name of the draft etc.:
mandatory out-of-court procedure as well as         Enterprise Act 2002#
the court run system) is in need of a further
reform. There have been first informal
discussions with the Federal Ministry of Justice.
#
To file a bankruptcy petition the consumer must       the inability of the debtor to pay the debt on
be unable to pay. #§ 17, para.2 InsO defines          which the petition is based, or in cases where
"Illiquidity" if the debtor is unable to meet his     the debt is not immediately payable, or the
mature obligations zu pay, whereby illiquidity        debtor appearing to have no reasonable
shall be presumed as a rule if the debtor has         prospect of being able to pay the debt
stopped payments. #Imminent illiquidity shall
also be a reason to open insolvency
proceedings. The debtor shall be deemed to be
faced with imminent illiquidity if he is llikely to
be unable to meet his existing obligations to
pay on the date of their maturity (§ 18, para.2
InsO).#




Please explain the philosophy of your bankruptcy      Please explain the philosophy of your bankruptcy
legislation more detailed:#The Insolvency Act         legislation more detailed:#Not explicit, but it is
provides discharge of residual debts (§ 286           the one of the effects#
InsO) for debtors who act in good faith. The
discharge should offer a second chance.#There
is no proof, whether these debtors will get the
promised second chance. Germany expects the
first legally effective discharges at the end of
2004. #It is to be assumed that the economic
reintegration of these debtors will fail. The
former "Konkursordnung" (Bankruptcy Act) had
a formative influence on the Insolvency Act.
The consumer bankruptcy procedure therefore
concentrates on liquidation and neglects the
required rehabilitative and preventive function.
#Unlike the french bankruptcy law the german
procedure ignores the role and the behavior of
the credit industry.#Furthermore the german
consumer bankruptcy law has a moral flavour.
The law supposes that the creditors won't
violate a law and that the debtors have to be
objects to look after.#
yes; please describe this procedure more detailed:   no#Alternatives to the bankruptcy of the debtor
#The debtor's request to open insolvency            exist. These include debt counselling and
proceedings assumes an unsuccessful attempt         Individual Voluntry Arrangements. Non are
to settle out of court with all of his creditors on either mandatory or a pre-condition to
the basis of a repayment plan (§ 305, para.1        bankruptcy#Please see Attachment Q50#
no.1 InsO). #The repayment plan is not subject
to any statutory regulation. It applies the
principle of contractual freedom. #The
repayment plan shall be deemed to be
approved if all creditors accept the payment
terms. The veto of one creditor is to be
sufficient to finish the pre-court
procedure.#The certificate from which emerges
that an unsuccessful attempt to settle out of
court has been made may not be older than 6
months prior to the request to open insolvency
proceedings.#




no##                                                 no#Please see Q50 and Attachemnt Q50#




In principle, the debtor could initiate the          None#
mandatory pre-court procedure independently.
Since only a suitable person or agency can
certify the fact that the out of court procedure
has failed, the normal case will be that non-for-
profit debt advice agencies or lawyers support
the debtor.#
In principle, the debtor himself has to bear the   n/a
costs for the mandatory pre-court
procedure.#The majority of the so called
"suitable" agencies under § 305, para.1 no.1
InsO - non-for-profit debt advice agencies and
consumer organisations - offer support free of
charge or charge modest fees.#(See also
answer to question 79.)#
No representive data is available.#In 2000 and n/a#
2001, iff carried out two surveys among debt
counselling agencies. 22 debt counselling
agencies participated in the 2000-survey and
16 agencies in the 2001-survey. One question
referred to the success rate for the mandatory
pre-court procedure. The average values were
13,43 % (2000-survey) and 15,5 % (2001-
survey). The average value for voluntary pre-
court procedures before 1 January, 1999
(commencement of Insolvency Act) had been
35,64 %.#The figures before and after 1
January 1999 are not completely comparable.
Before 1 January, 1999 debtors could settle out
of court with each of their creditors seperately,
since 1 January, 1999 debtors have to reach
settlements that cover all of their
claims.#However, the figures illustrate that the
success rate for pre-court procedures has
decreased since commencement of the
Insolvency Act. This development must be
considered critically for two reasons:#1) The
success rate does not fulfil the legislative
objective that successful out of court
settlements shall be the rule.#2) Debt
counselling has changed. Their work and advice
Due to the principle of contractual freedom no    n/a#
minimum or maximum duration must be
obeyed.#In practice however, the principle of
contractual freedom is used insufficiently. The
regular minimum duration is 5 or 6 years
following the model of the court run bankruptcy
system (see answer to question 70). The
majority of creditors refuse shorter extra-
judicial settlements. Even though they refuse
offers which anticipate the court run bankruptcy
system.#
Please explain in detail and give examples:#The   Please explain in detail and give examples:# n/a#
main problem is that the court run consumer
bankruptcy system rather offers incentives to
file its proceedings than to reach an out of court
settlement. Extra-judicial settlements have to
be negotiated actively. Interested parties have
to communicate and must be willing to
compromise. Unlike the court run bankruptcy
system is less demanding. As long as this initial
position will remain the mandatory pre-court
procedure will not develop its potential.#Two
main single problems are:#- Extra-judicial
negotiations are insufficiently protected against
enforcement measures. § 305a InsO - effective
since 1 December, 2001 - in fact regulates the
legal presumption that the pre-court procedure
has failed, if one creditor initiates an
enforcement procedure. But this new regulation
can work as an obstacle. Interested parties
could increase their efforts or could welcome
that a creditor initiates an enforcement
measure. The pre-court procedure would be
finished hasty.#- Assignment of wages remain
valid 24 months following the end of the current
calendar month on the date of the opening of
the court run proceedings (§ 114, para.1 InsO).
1. Debtor's request to open insolvency             Please see Attachment Q57#
proceedings (§ 305 InsO).#2. Debt settlement
proceedings accompanied by the court (§§ 306-
310 InsO)#The insolvency court tries to reach a
settlement with all creditors on the basis of a
debt re-adjustment plan, provided that the
majority of the creditors agrees to the terms.
Required is the majority of members and
amount. The court may replace a refused
consent of one creditor provided that the plan
would not defeat the creditor compared with his
prospects during the court run bankruptcy
system.#Since 1 December, 2001 debt
settlement proceedings are no longer
mandatory. The insolvency court decides
whether the proceedings shall be carried out or
not. The court refuses the proceedings if it is
unlikely to succeed. The court will take into his
consideration the course of the pre-court
procedure and the debtor's proposal whether a
debt settlement should be initiated.#3.
Simplified Insolvency proceedings (§§ 311-314
InsO)#The court designates the trustee. The
trustee has to utilize seizable assets. #The
debtor has to assign his seizable earnings for a
period of 5 or 6 years in favour of the trustee
In order to understand the differences it is       n/a#
worthwile to know that the legislative objective
was that the pre-court and the court run
system should co-operate effectively and that
the interested parties should regard the court
run system as ultima ratio.#The pre-court
procedure and negotiations are not subject to
any statutory regulation. It applies the principle
of contractual freedom. There is no minimum
duration or minimum content of extra-judicial
debt re-adjustment plans. Therefore the plan
can for example include the debtor's joint liable
relatives. Moreover, the pre-court proceedings
give the (last) opportunity to communicate
directly with the creditors.#The court run
system is subject to a statutory regulation. Its
procedure is bureaucratic, lengthy and costly.
The debtor degenerates into an object of
attendance. Joint liable relatives cannot join the
proceeding which the principle debtor has
initiated, but have to file their own petition.#


The Insolvency Act differentiates between#- a     Official Receiver or an Insolvency Practitioner
trustee within the simplified Insolvency
proceedings#- and the trustee during the 5 or 6
year period called "Treuhandphase" which can
be translated as phase of good behaviour.#The
insolvency court designates a trustee for the
simplified insolvency proceedings under §§ 313,
56, para.1 InsO. Trustees shall be suited
individuals, particularly experienced in business
affairs, and independent of the creditors and of
the debtor. Debtors and creditors can nominate
an individual. In practice the court designates
proven insolvency administrators and
lawyers.#Trustees during the "Treuhandphase"
(§ 292 InsO) may also be nominated by
debtors and creditors. § 288 InsO expressly
provides a right of nomination. In fact, the
court designates proven insolvency
administrators and lawyers, too.#

#The Insolvency Act offers discharge of residual #yes, see Attachment Q57, but not applicable
debt unless claims are excepted (especially        to co-debtors who are subject to their own
claim in tort and fines, § 302 InsO). #At the      individual insolvency procedures#
request of a creditor, the insolvency court may
retract the grant of discharge of residual debt if
it is subsequently found that the debtor has
infringed one of his obligations and thereby
impaired the satisfaction of the creditors to a
considerable extent (§ 303 InsO).#Discharge of
residual debt does not apply to jointly liable
relatives or other co-debtors.#
yes; #If discharge of residual debt or the        no
request to open insolvency proceedings is about
more than 10 years ago, it is not allowed to
refuse a further request and discharge of
residual debt (§ 290 para.1 no.3 InsO).#




1) Execution prior to the opening of insolvency   yes, but not excepted debts
proceedings: #If a creditor during the last 3
months preceding the request to open
insolvency proceedings or after such request
acquired by virtue of execution a security
attaching the debtor's property forming part of
the assets involved in the insolvency
proceedings such security shall become legally
invalid when the proceedings are opened (§§
312, para.1, 88 InsO).#This protection is
insufficient, because the provision only includes
securities but not proceeds of utilization.#2)
Prohibition of execution:#Individual creditors
may not execute into the assets involved in the
insolvency proceedings or into the debtor's
other property during the insolvency
proceedings (§ 89, para.1 InsO). Enforcement
measures initiated by maintenance creditors
and entitled persons to obtain damages in
tort.#3) Until the court decides on the request
to open insolvency proceedings the court shall
take all measures appearing necessary in order
to avoid any detriment to the financial status of
the debtor, in particular the court may order a
(temporary) restriction on measures of
execution unless immovabels are involved (§ 21
InsO).#4) Together with the opening of
Certificate issued by a suitable person or       minimum debt, court fees and process to be
agency from which emerges that within the last followed #Please see Attachment 57
six months prior to the request to open
insolvency proceedings an unsuccessful attempt
has been made to settle out of court with the
creditors on the basis of a plan (§ 305, para.1
no.1 InsO). This plan has to be enclosed and
the main reasons of its failure have to be
explained.#The official application form has to
be used (effective since 1 April, 2002). #Since
1 December, 2001 debtors without means may
apply for extension of the court or filing fees.
Therefore they are not obliged to pay court or
filing fees in advance (§§ 4a ff. InsO).#Debtors
don't have to offer a qualifying (minimum)
quota. The Federal Court of Justice judged that
even a zero-option is not an obstacle to open
insolvency proceedings.#




1) Home owned#(...)#2) Home rented #§ 109       iNo protection for assets in the name of the
InsO                                            debtor save at the discretion of the Courts, or
                                                by agreement with the Official Receiver or
                                                Insolvency Practitioner appointed as Trustee.
                                                Where dependents live with the debtor the
                                                home may be protected from creditors for the
                                                first 12 months, thereafter the Officail Receiver
                                                can obtain an order for possession and sale
Personal rights: Loan guarantees and joint          all assets and liabilities identified within the
liabilities remain valid. The creditors' rights     bankruptcy process are subsumed, though
against debtors' co-obligors and guarantors         those subject to security need not participate.
shall remain unaffected by discharge of residual    If they do the security is surrendered and the
debt. The debtor, however, shall be discharged      creditor loses any priority on that or any other
of claims of co-obligors/guarantors in the same     asset within the bankruptcy
way as he is discharged of the claims of the
creditors (§ 301, para.2 InsO).#Rights attached
to property: The creditors shall have the right
of disposition (§ 313, para.3 InsO)#Assignment
of wages: remain valid 24 months following the
end of the current calendar month on the date
of the opening of the court run proceedings (§
114, para.1 InsO). During these 24 months the
preferential creditor is entitled to the debtor's
seizable earnings.#


Excluded claims under § 302 InsO are:#-             student loans, court fees and arrears of child
damages in tort, provided that the creditor has     maintenance through the Child Support Agency
filed his claim referring to § 302 InsO,#- fines
and comparable obligations,#- interest-free
credit granted to the debtor in order to pay the
court fees.#




                                                    tax, secured claims, general creditors in that
                                                    order
The debtor is allowed to keep his earnings up to as agreed with the Officail Receiver or
which the earnings are exempt from seizure.#     Insolvency Practitioner appointed as Trustee in
                                                 Bankruptcy, based on what is reasonably
                                                 necessary for living expenses for the debtor and
                                                 any dependents. In practice the Trustee wil
                                                 allow the bankrupt to keep wages provided no
                                                 excess is saved




See answer to question 44.                       Tools, books, vehicles and other items of
                                                 equipment which the debtor needs to use
                                                 personally in employment, business or vocation,
                                                 and clothing, bedding, furniture, household
                                                 equipment and other basic items necessary for
                                                 the debtor and dependents




Minimum duration: #Commencement of               Minimum duration: #12 months#Maximum
insolvency proceedings on 1 December, 2001 or duration: #5years#Exceptions: #the debtors
after the so called "Treuhandphase" (phase of    conduct during the period may lead to it being
good behaviours) is 6 years. Commencement of extended#
insolvency proceedings before 1 December,
2001, the "Treuhandphase" is 7
years.#Maximum duration: #6 (or 7) years as
mentioned above; there is no difference
between minimum and maximum
duration.#Exceptions: #5 years by illiquidity of
the debtor before 1 January, 1997 (Article 107
EGInsO - Introductory Law of the Insolvency
Act). For commencements of insolvency
proceedings on December 1, 2001 or after an
unconsistent jurisdiction has started whether
Article 107 EGInsO is applicable or not. The
reason is that Article 107 EGInsO only refers to
the original duration of 7 years and not to the
new duration of 6 years. The legislator simply
forgot to ammend the wording of Article 107
EGInsO.#
5 % of the first 25.000,- Euro of the debtor's     The Trustees fees are subject to agreement
seizable earnings, other payments or other         between the debtor and the Trustee. Charges
proceeds,#3 % from the excess amount to            are often made on the basis of 'time spent'
50.000,- Euro,#1 % of the amount going             though may also be calculated as a percentage
beyond 50.000,- Euro.#The remuneration             of the bankrupt's estate.#The Official Reciever
amounts to at least 100 Euro for each year of      will in the early stages of a bankruptcy incurr
the trustee's activity (§ 14 Insolvenzrechtliche   expenses with regard to investigation into the
Vergütungsverordnung - InsVV).#                    assets comprised in the bankrupt's estate, the
                                                   advertising of the bankruptcy and the
                                                   convening of a creditiors meeting. The cost of
                                                   this will be coverd by the deposit required to be
                                                   paid into Court as a precondition of the
                                                   bankruptcy application.#


The majority of debtors apply for respite. The     from the assets falling into the hands of the
law (§§ 4a ff. InsO) allows requests for a         Trustee#
respite since 1 December, 2001. The seizable
earnings during the 5 or 6 year "phase of good
behaviours" will be primarily used to settle the
deferred fees. But privileged creditors under §
114, para.1 InsO come first.#




See at first answer to question 58.#1.           no
Application form: #Until 1 April, 2002 the
debtor was not obliged to use a special
application form, however, three different forms
had been common. Especially one
comprehensive form, developed by an expert
group of debt counsellors, gained acceptance
even among the courts. The new official
application form is a step backwards. It is too
large-scaled (about 30 pages) and does not
meet the needs of ordinary debtors.#2.
Privileged treatment of assignment of wages (§
114, para.1 InsO). Fore more details please see
answer to question 56.#3. Debtors' supervision
by the trustee: #The debtors will not learn a
productive crisis management.#4. Debtors
without means:#The court run proceedings are
too lengthy and costly. An alternative court
procedure is needed for this group of
debtors.#5. Debt settlement proceedings
accompanied by the courts:#Since the debt
settlement proceeding is no longer mandatory,
the interested parties as well as the courts
ignore it and the chances to reach a settlement
are getting worse. Therefore this proceeding
should be enhanced again. The court's legal
yes; #Individual money advice responsibilities or no#     #
matters are regulated by#-
Rechtsberatungsgesetz (Legal Advice Act),#-
Bundessozialhilfegesetz (Federal Social Security
Act) and#- Insolvenzordnung (Insolvency
Act)#In Germany, money advice is construed
in a wide sense as "money-related social work"
(see question 78 below). Money advice
therefore also involves legal advice. In
Germany, money advice must therefore deal
with the criticism brought by the legal
profession – albeit now only occasionally – that
it breaches the Rechtsberatungsgesetz (Legal
Advice Act). Bundesgerichtshof (German
Supreme Court) decisions have drawn a
distinction between soziale Beratung (social
advice) and Rechtsberatung (legal advice) on
the basis that legal advice is only impermissible
where the principal activity of the adviser is law-
based. #§ 8 Bundessozialhilfegesetz (Federal
Social Security Act) provides the general legal
basis for money and other advice for
overindebted households which are entitled to
claim state benefits. § 17
Bundessozialhilfegesetz sets out the relevant
obligations and duties. #The
Please see answer to question 74.                   n/a
There is just a restriction on who is allowed to    no, subject to restrictions on regulated
give insolvency advice. § 305, para.1 no.1          activities under financial services legislation,
Insolvenzordnung states that the debtor shall       and a requirememt to obtain a consumer credit
submit a certificate issued by a suitable person    licence if appropriate activities are being carried
or agency from which emerges that within the        out#
last six months prior to the request to open
insolvency proceedings an unsuccessfula
attempt has been made to settle out of court
with the creditors on the basis of a plan. The
German Länder may determine which persons
or agencies are to be regarded as suitable. The
implementing statutes of the Länder have fixed
the relevant preconditions with slight
differences. Typical preconditions are: There
must be at least one experienced adviser, one
adviser should be a trained social education
worker (or similar profession), legal advice
must be ensured.#

The main agencies providing debt advice are:#-      Debt counselling services fall into two separate
local authorities (i.e. youth welfare department,   sectors. There are a number of charitable
social welfare authority),#- church welfare         organisations, who generally provide their
organisations (especially Caritas and               services free of charge to the debtor. and
Diakonisches Werk),#- other welfare                 seperately the private, for profit sector, debt
organisations (i.e. Arbeiterwohlfahrt/workers'      management services.#Please see Attachment
welfare, Deutsches Rotes Kreuz/German Red           Q77#
Cross, Deutscher Paritätischer
Wohlfahrtsverband) and#- Consumer
Organisations.#The behavior of commercial
debt advice agencies is however problematic.
They press debtors to get in contact. There is
often a disproportion of consideration (i.e.
commercial debt advice agencies do not
negotiate debt settlements) and performance
(the debtor has to pay a catalogue of
unfathomable fees).#
Historically, money advice in Germany has been       budgeting, debt management, negotiaton with
treated as a social work activity. As well as        creditors
dealing with the settlement of debts, it
includes, for example, defending debtors,
advice relating to securing minimum income
entitlement, psychological and social
counselling and (preventative) money
management advice. #Over time, money
advice centres have been set up to deal
exclusively or primarily with settlement of
debts. Until the Insolvenzordnung came into
force, this involved mainly scrutinising the
claims made by creditors and preparation of
individual extra-judicial settlements. #Since
the Insolvenzordnung came into force, the
trend towards specialist insolvency and money
advice centres has grown. Advice provided
includes in particular advising debtors about the
insolvency procedure, production of (extra-)
judicial debt settlement plans and preparation
for initiating insolvency proceedings. Once
proceedings have been lodged, only a few
centres support debtors through the procedure
for insolvency and release from outstanding
debts.#Individual consumer centres and money
advice centres also provide advice in relation to
A distinction must be drawn between those            not in relation to debt counselling or any
clients who have a subjective and legal              matters in relation to bankruptcy#
entitlement to legal advice (free of charge) and
those who are in fact able to take advantage of
the relevant services without having a statutory
entitlement to them. In Germany, the great
majority of the centres listed in question 77
(with the exception of the commercial debt
regulators) provide money advice free of
charge or for only a small fee. Unless there is a
real element of urgency in the case, debtors
approaching these services face a long wait.
Under the following legislation, those seeking
advice have a statutory entitlement to it:#1.
Entitlement to advice under the
Bundessozialhilfegesetz#Where "dealing with
an emergency", as defined by the
Bundessozialhilfegesetz, is involved, the task of
the social services provider in giving the citizen
advice and support becomes more pressing to
the point where an enforceable claim to advice
arises. #Where "avoiding an emergency" is
involved, the social services provider‟s task is
primarily to work towards ensuring that the
person concerned receives advice and support.
This only occasionally gives rise to an
#Germany does not know "financial education"        #none#
yet as an extensive educational approach.#We -
 iff - define "financial education" or "financial
literacy" in the meaning to impart to the
consumer skills, understanding and social
competence that he will be able to make a
productive use of the financial system and to
voice his problems with financial services.
Furthermore the financial system should also
learn within this educational process how to
develop in a direction which responds to the
needs of those who use financial services. But
financial literacy shall not replace consumer
protection.#German debt advice agencies and
welfare organisations use their advice and their
problem related activities also for education.
They develop informational material and teach
in different environments. But they operate this
task under the viewpoint of social work and
neglect thereby the topic financial services.
They normally offer budget advice, group
learning for overindebted consumers and
preventive learning just for pupils and trainees.
#German savings banks are by law obliged to
further financial education and especially the
idea of savings. #Other suppliers like private
1) Banks

2) Financial Services Authority (BAFin)
                      Greece                         Ireland

The legal Acts which provide for the consumer'
s interests protection are the following#1) The
basic Act which deals with the protection of the
consumer in the field of consumer credit
contracts is Joint Decision of Ministers of
National Finance, Justice and Trade of F1 983-
1991 as amended by Joint Decision F1
5353/1994. In fact this Act has implemented
Community Directive 87/102, as amended by
Directive 90/88, in the greek legislation. Acts of
the Governor of the Bank of Greece which
regulate particular issues on consumer credit
will also be sent both in paper and
electronically#2) There is no Consumer
Bankruptcy Legislation (see below under ..)#3)
Law 2251/1994 on consumer protection, among
other, regulates issues relevant to consumer
credit and will be sent to IFF both in paper and
electronically in english.#4) All pieces of
legislation referred in this questionnaire will be
sent to IFF both in paper and electronically




#http:// lawdb.intrasoftnet.com#The data base is
called NOMOS. But one has to subscribe in
order to have access. We will send the material
by e-mail to IFF.#
1) Eliza Alexandridou, Hellenic and Community
Consumer Protection Law, II, Thessaloniki                        how the legal system in Ireland treats
1996#2) Veletzas G., Bank Credits and                            consumer debt etc – (unpublished, due to be
consumer protection, Epitheorisi Emporikou                       published in May 2003) – Free Legal Advice
Dikaiou 1997, page 640#3) Georgiadis                             Centres, 2003
Apostolos, Surety of credit, Athens 2001#4)
Gkouskou Aggeliki, The height of interest in                     etc are available electronically through
bank transactions, especially in consumer credit                 www.mabs.ie – the MABS web-site
contracts, #5) Dellios, Giorgos, Consumer
Protection in Bank Transactions, NoB 40                          MABS National Conference report, March 2000
(1992), page 811.#6) Dellios Giorgos,                            (Department of Social and Family Affairs)
Consumer Protection and Private Law System,
the judicial control of consumer contracts and                   National Conference report, March 2002
its limits, Sakkoula Editions, Athens-                           (Department of Social and Family Affairs)
Thessaloniki, 2001.#7) Douvlis Basileios, The
judicial control of f of General Contract Terms                  published by Comhairle (available online @
in bank transactions,.. 1/1999,p.4-41#8) Doris                   www.mabs.ie)
Fhilippos, The .. of .. in the article 2 of
2251/1994 for the consumer protection and its
importance in common civil law, NoB                              Community in the Greater Dublin Area‟ - Quinn
2000,p.737-766#9) Karakostas Ioannis,( In                        & McCann, 1997
collaboration with Dimitris Tzouganatos)
Consumer Protection Law 2251/1994, Athens-                       for Housing Debt, Threshold 1996
Komotini 1997#10) Karakostas Ioannis,
General Terms in Bank Transactions, Athens-                      Financial Services‟ Credit and Debt Policy
Komotini 2001#11) Klavanidou Despina,                            Group, 1996
Consumer Loans.Dogmatical Theory and
practical issues, Thessaloniki 1997#12) Lelentzi                 (Combat Poverty Agency) - Daly M. & Walsh J.
Athanasia, The control of General Contarct
Terms , NoB 50/2002,p.274-301#13) by the
yes#Unfortunately we have found only one doneMendis
Bank of Greece in 2002. This research has as follows :#It is a   legal system in Ireland treats consumer debt etc
sampling survey relevant to the height of borrowing and to       (unpublished, due to be published May 2003) – Free
the degree of indebtness of greek households. This research      Legal Advice Centres, 2003
took place from September 2002 till the end of January 2003
and aimed at bringing in light the most significant
                                                                 Recovery’ – West/North West MABS Regions’
economical and social aspects of greek household's
borrowing. According to the results of the research 1.146
                                                                 submission to the Department of Justice, Equality and
out of 2.303 households which participated in the research       Law Reform on a proposed Attachment of Earnings
(that means 49,8%) stated that they have no debts arising        Bill, 1999
from any kind of loan. Differernces are to be noted among
the diferrent geographical regions of the country and among
diferrent level of income of the households. In semi-urban
areas the percentage of households which answered that they
have no debts due to loans rises up to 64,7%, while in Athens
the percentage is reduced to 42,5%. Moreover the higher
wages are, the higher is the level of borrowing of greek
households. Its also notworthy that the percentage of
households which have not concluded any credit contract
raises up to 64,9% in households with low income such as
15.000 euro, it is reduced to 37,6% in households of average
income from 15.000 -30.000 euro and it' s becoming lower to
households with an income of 30.000 euro and more.#As far
as the remaining percentage of 50 % of the indebted
The Ministry of Development, Sub-ministry of        Government department(s) in charge of over-
Trade, General Secretariat of Trade, General        indebtedness##Though there is no particular
Department of Consumer Protection.#There is,        Department with specific responsibility for over
unfortunately, no special department charged        indebtedness, the following Departments are
with consumer overindebtedness.                     responsible for key areas that impact on the
                                                    issue of over-indebtedness: -##Justice,
                                                    Equality and Law Reform – Responsible for the
                                                    administration of justice through the Courts
                                                    Service and for both criminal and civil law
                                                    reform##Finance - Responsible for overseeing
                                                    the work of the Central Bank and its newly
                                                    established offshoot, the Irish Financial Services
                                                    Regulatory Authority, which is due to formally
                                                    begin work in May 2003.##Enterprise, Trade
                                                    and Employment - Responsible for
                                                    implementing the consumer credit directives
                                                    and oversees the work of the Office of the
                                                    Director of Consumer Affairs, the office charged
                                                    with general consumer
                                                    protection.##Department of Social and Family
                                                    Affairs - Sole funder of and responsible for the
                                                    network of independent Money Advice and
                                                    Budgeting Services (MABS)#* #

yes; #There is a general consumer protection        The Sale of Goods Act,1893, The Sale of Goods and
law, Law 2251/94, as modified by art.10.            Supply of Services Act 1980 and The Consumer
par.24 of Law 2741/1999. In its major part, this    Information Act 1978 regulate the provision of goods
                                                    and services to consumers, whilst the Consumer
piece of law has implemented the community
                                                    Credit Act 1995 covers the provision of credit to
directives, whereas some of its provisons have      consumers. Further details of these pieces of
regulated issues of national (greek) interest.      legislation and others and how they relate
The provisions of Law 2251/94 have as follows       specifically to consumer credit, are given in Item 1
:#Already, in its first provision the legislator    above.
sets the background of this piece of law as
being the protection of consumer interests. In
the same provision the legislator defines the
persons that fall within its scope. The greek law
is in this context innovative : the definition of
"consumer" differs significantly from that of the
classical community definition of "every natural
person acting outside its business". The greek
legislator defines consumer in a much broader
way. According to the greek legislator
"consumer is every natural or legal person for
whom products and services offered in the
market are intended or who is the final
recipient of such products or services.
Consumer also means any addressee of an
advertising message".#b) Art.2 provides for the
general contract terms (notion, characteristics,
distinction between different stages of control,
yes; #Provisions of the general consumer            No.
protection law partially apply also to consumer     However, note that Section 80 of the Consumer
credit. In particular : #- art.2 of Law 2251/94     Credit Act 1995 (which repealed S32 Sale of Goods
                                                    and Supply of Services Act 1980) provides that
on standard contract terms would apply to
                                                    persons (for example credit institutions) involved in
standard terms in credit contracts.#-art.4 on       arrangements to facilitate a purchase of goods on
distance contracts#-art.7 on the liability of the   hire purchase shall be jointly and severally liable
service provider and#-art.8 on advertising.         with the owner for any breach or misrepresentations
#Please note that the "extended" notion of          made with regard to the agreement. Hence where
consurmer does not apply in consumer credit         goods have been purchased by a consumer in such a
(see below under 7)#                                fashion and these turn out to be faulty, s/he has the
                                                    right to look to either the owner or the credit
                                                    provider for suitable redress (such as a
                                                    refund/replacement/repair) depending on what is
                                                    reasonable in the circumstances.

                                                    Note also S.14 of the Sale of Goods and Supply of
                                                    Services Act 1980, the effect of which is to make
                                                    finance houses jointly and severally liable with the
                                                    seller in respect of personal loans, where there is a
                                                    breach of contract or misrepresentation.




yes; #EU Directives 87/102/EEC and 90/88/EEC Regulation of Consumer credit##Yes. Consumer
have been implemented into Greek Law with      Credit is regulated under a special law, the
the F1 983/1991 Joint Decision of Ministers of Consumer Credit Act 1995 (and associated
                                               regulations) – see point 1 above.##
Finance, Justice and Trade (published in Official
Journal B 172/21.3.1991), as later modified by
Joint Decision F1 5353/1994. This Joint Decision
(hereinafter referred as JD) has adopted the
provisions of the Directives almost as such. As
the EU Directive provisions, the provisions of
the JD are set in two distinctive parts.
Provisions of the first part regulate the way
credit agreements are made and the content of
such agreements. Provisions of the second part
define the consumers‟ rights and obligations vis-
à-vis the creditor. In more detail : #- Article 1
sets the scope of the JD, i.e. the
implementation of the community directives. #-
Art.2 refers to the basic definitions of the JD
(“consumer”, “creditor”, “credit agreement”,
“total cost of credit to the consumer” and
“annual percentage rate of charge”). #- Art.3
–6 are devoted to the annual percentage rate
of charge. Art.3 contains the definition of Art.1
of Dir 98/7/EC. Art.4 defines the elements to be
included when calculating the APRC. Art.5
defines the time when the APRC is calculated.
Art.6 provides in detail the way APRC is
no#Greece has abandoned the system of               Maximum interest rates##No. There are no specific
setting limits by administrative provisions since   maximum interest rates prescribed for credit
1989. Hence bank interest rates are free. #The      contracts. ##There is however a general provision in
                                                    S.47 of the Consumer Credit Act 1995 that gives a
Governor of the Bank of Greece who is
                                                    consumer or person acting on their behalf the right
authorized to regulate bank issues, has             to apply to the Circuit Court for a declaration that the
restricted himself to regulate #a) only “non-       total cost of credit in the agreement is excessive. The
banking” interest rates, i.e. interest rates of     court is required to take various factors into account
credit granted under a contract not related to a    e.g. creditor risk, prevailing interest rates, the
bank (authority granted to the Governor of the      „profile‟ of the consumer, creditor costs (S.47). Note
Bank of Greece by Law 876/79 art.15 par.5)          that a specific exemption applies to credit institutions
                                                    such as banks and other prescribed lenders in
and #B) to regulate the maximum default
                                                    relation to this provision. ##In addition,
interest rate, which can be set by the banks at     moneylenders (generally involved in doorstep
a maximum percentage of 2,5% per year on            collected credit at high interest rates to consumers
top of the interest rate which is agreed and        with very limited credit options) must specify the
included in the credit contract (Act of the         interest rates that they are proposing to charge in
Governor of the Bank of Greece                      their applications and, if successful, are bound by the
2393/15.7.1996). #According to the law              terms of their licence subsequently including the
                                                    interest rate. ##Finance houses (principally involved
authorizing the Governor of the Bank of Greece
                                                    in car finance) that are not credit institutions cannot
to define the non-banking interest rates, such      charge in excess of 23% APR without the agreement
rates are defined after taking into account the     becoming a moneylending agreement for which they
current financial, credit and currency conditions   would require a licence.##Finally, there is a common
#It is important to note that the Greek             law (i.e. judge made) rule against extortionate credit
Supreme Court, judging on a collective action       bargains but this is very rarely invoked.##
filed by E.K.PI.ZO consumers‟ association,
decided and ruled that the “non-banking”
There is no maximum interest rate set for           Item 9 - Maximum interest rates – Consumer
consumer credit. #Maximum interest rate for         credit##Not applicable – see point 8.##
"non-banking" credit is currently defined at
8,75%. #
There is no maximum interest rate for               Maximum interest rates – Mortgage
mortgage loans (see above under 8 and 9)#           loans##Not applicable – see point 8. Mortgage
                                                    interest rates are market driven according to
                                                    the institutions. A list of current variable/fixed
                                                    rates can be supplied if required.##




There is no maximum interest rates for small        Maximum interest rates – Small business
business credit (see above under 8 and 9). #        ##Not applicable – see point 8.##




Until 1989 bank interest rates were being           Maximum interest rates##Generally not
determined by administrative acts of the            applicable – see point 8.##However, there are
Governor of the Bank of Greece, issued after        specific instances where interest rates have
authorization by the law. These administrative      effectively to be approved in advance or are
acts were defining the interest rates-mostly of     otherwise regulated. ##(i) Moneylenders have
deposit and of credit- either on a minimum          to supply details of their proposed interest rates
basis or a maximum basis. In the process of         to the Office of the Director of Consumer Affairs
liberalization of the functioning of the credit     before a licence is issued (See point 8). A
market, bank interest rates were also               moneylending agreement is defined as a credit
liberalized. As far as consumer credit is           agreement where, among other criteria, the
concerned in particular, Act Nr 2286/1994 of        total cost of credit to the consumer is in excess
the Governor of the Bank of Greece provided         of 23% APR (s2).##(ii) Credit Unions (who are
that interest rates are free. As already referred   exempt from the provisions of the Consumer
in answer to question 7, today only bank            Credit Act) are prohibited by the Credit Union
default interest rates ceilings are being           Act 1997 from charging in excess of 1% simple
regulated by the President of the Bank of           interest per month on outstanding balances
Greece.      #                                      (The Registrar for Friendly Societies is the
                                                    regulatory authority in this regard)####
#Both theory and jurisprudence accept that           Maximum interest rates##Again, generally not
when the interest rate has been defined by the       applicable – see point 8.##Under S.47 Consumer
bank unfairly (abusively) high or when the such      Credit Act, if it considers the cost to be excessive,
                                                     the Circuit Court may re-open the agreement to do
interest rate is dispropotionally high considering
                                                     justice between the parties. It may for example: -
the market situation at the time in question,        ##(i) Relieve the consumer form payment of any
then the exceeding amount of interest is             sum in excess of the sum adjudged by the court to
considered null and the consumer may refuse          be fairly due in respect of such total costs of
to pay it, or if he/she has already paid, may        credit#(ii) Set aside, either wholly or partly, the
issue proceedings in order to force the bank to      agreement against the consumer#(iii) Revise or alter
pay it back #                                        the terms of the agreement#(iv) Order the
                                                     repayment to the consumer of the whole or part of
                                                     any sums paid##In the case of moneylending
                                                     agreements, the Court may also order the
                                                     revocation, suspension or alteration of the licence
                                                     and it would also be difficult to enforce the
                                                     agreement against the consumer.##In relation to
                                                     finance houses, if an agreement charged over 23%
                                                     APR it would become a moneylending agreement. If
                                                     the finance house had no moneylending licence, this
                                                     would constitute an offence and equally, the
                                                     agreement would be very difficult to enforce against
                                                     the consumer.##




#According to art.9 of Joint Decision F1-            Items 14 and 15 - Cost elements -
983/1991 consumer credit contracts are made          disclosure##Advertising ##Advertisements offering
in writing and the consumer receives one copy        credit in relation to the acquisitions of goods or
                                                     services must in general state the nature of the
of the contract. In the contract the following
                                                     financial accommodation in question and the total
elements should be included :#- the APRC#-           cost of the credit to the consumer. If mentioning a
the conditions under which the APRC may be           rate of interest in a credit advert, it must be in the
amended#- the interest rate#- the amount and         form of a clear and prominent statement of APR and
number of instalments as well as the dates on        any other charges, any security required and any
which they fall due regarding payment of credit      restrictions must be outlined.##Credit
on one hand and payment of interest and other        agreements##-Costs and penalties to which the
                                                     consumer may become liable for any failure by the
related expenses on the other hand, as well as
                                                     consumer to comply with the terms of the
the total amount of such instalments or the          agreement, must be disclosed in both the credit
method of ascertaining any of the same if            agreement and any related contract of guarantee
unknown at the time the agreement is                 (s30 – Consumer Credit Act 1995)##-A Notice as to
concluded.#- the cost elements that are not          how information regarding the cost of the credit must
included when calculating the APRC, and are          be presented to the consumer on the front page of a
binding for the consumer under certain               credit agreement, is contained in the Third schedule
                                                     to the Consumer Credit Act 1995##Moneylending
circumstances, as well as detailed description of
                                                     agreements##Collection charges must be specified
such circumstances Such cost elements are :
                                                     and the agreement must give the borrower the
#* a) charges on top of the price to be paid by      option of making payments at the lender‟s business
the consumer when purchasing goods or                premises without such a charge. The borrower can
services independent of whether the consumer         waive this right by signing a specific statement to
pays in cash or with credit, #* b) charges for       this effect (s103 CCA 1995)##Housing
money transfer, as well as charges related to        loans##Where ancillary fees are payable by an
                                                     applicant in connection with a housing loan
the account in which money is deposited for
                                                     (acceptance or administration fees, security
repayment of the credit, #* c) collection
                                                     valuations, etc), the mortgage agent shall ensure
charges, #* d)..#* e) insurance premiums or
Disclosure is achieved by the contracts              See Item 14
themselves as well as indicative payment plans
given by the banks some time after signing of
the contract.#Within 30 days after default, the
bank is obliged to give detailed information to
the debtor regarding the debt (capital, interest
and charges of any kind - 22501/2002 Act of
the Governor of the Bank of Greece).




#*#1. Unfortunately, the greek legislator (as        More informational duties##The specific warnings
referred above, in the JD F1 983/1991) did not       that must be provided under the Consumer Credit
make use of the possibility to provide more          Act 1995 over and above the informational
                                                     requirements in Article 4 of Directive 87/102 (as
informational duties than prescribed in art.4 OF
                                                     amended) are as follows: -##Credit
EU Directive on Consumer Credit. Art.9 of this       agreements##Notice of a 10 day cooling off period
JD has more or less adopted the wording of the       must be provided in a credit agreement (excluding
EU Directive. Moreover, the greek legislator has     overdrafts, credit card and housing loans) though
not provided as a duty of the creditor to warn       this right can be signed away by a consumer (30(2))
the consumer on the risks related to eventual        ##Housing loans##„WARNING – YOUR HOME IS AT
default payment and the incurring charges. #2.       RISK IF YOU DO NOT KEEP UP PAYMENTS ON A
                                                     MORTGAGE OR ANY OTHER LOAN SECURED ON
Nevertheless, the recent Act of the Governor of
                                                     IT‟##THE PAYMENT RATES ON THIS HOUSING LOAN
the Bank of Greece (Act Nr 2501/31.10.2002           MAY BE ADJUSTED BY THE LENDER FROM TIME TO
being valid from 1.1.2003 - Official Journal A'      TIME‟#(Section 128)#Endowment
227/28.11.2002) provides for the obligation of       mortgages##„WARNING – THERE IS NO GUARANTEE
the creditors to give additional information to      THAT THE PROCEEDS OF THE INSURANCE POLICY
consumers. In particular, this Act introduces the    WILL BE SUFFICIENT TO REPAY THE LOAN IN FULL
following obligations of creditors:#* To properly    WHEN IT BECOMES DUE FOR REPAYMENT‟#
inform the clients about the nature and
characteristics of the products and services
offered by the bank, as weel as the conditions
by which bank transactions are ruled (art.
A)#* To periodically inform the clients in writing
during the contract regarding the enforcement
of the contractual clauses agreed (art.A).#* To
respond within a logical period of time to
requests of the clients asking for clarifications
 No, there is no legal requirement that the          Investigation of income##No. There is no
creditor investigates the debtor's income.           general legal duty of care or legislative
Nevertheless, it is common practice for the          obligation to lend responsibly. However, in the
banks before approving an application for credit     context of mortgage lending in particular, there
to ask from the consumer the official document       are guidelines issued by the Central Bank (soon
from the taxation stating the consumer's             to have some of its powers transferred to
income for the previous year. #In credit card        IFSRA – See point 4) with regard to: -##(i)
contracts there is a standard term providing for     multiples of salary that should be applied by
the right of the bank to check the personal data     mortgage lenders to determine the maximum
of the consumer, in order to collect information     loan that can be granted #(ii) the need for
on the financial statue of its clients.#The          mortgage lenders to stress test a borrower‟s
Banking Code of Conduct, adopted by the              ability to repay the loan given a rise in interest
Banks in 1997, provides in art.36, that the          rates##These are not legally binding and it
Banks may requre, when having a request for          would appear that there is some variation in
credit, the following data :#a) age, profession,     the way different institutions apply these
status of family of the person interest for credit   guidelines in an extremely competitive
and the guarantors#b) financial situation of the     mortgage market. ##
afore-mentioned persons and property they
might possess. #c) ability to perform their
obligation under the contract.##
#There are no special provisions in law for this     Liability for irresponsible lending##No. There is no
matter.#                                             such liability to other creditors or the debtor, other
                                                     than the practical difficulties for lenders in
                                                     attempting to recover the debt where the debtor has
                                                     insufficient means to pay. However, it is speculated
                                                     that, with the increase in the variety and number of
                                                     agreements and thereby over indebtedness, a legal
                                                     defence of irresponsible lending may be established
                                                     in the future##
yes; #Yes, there is the central data bank          Credit referencing system##There is no state
"TIRESIAS BANKING INFORMATION SYSTEMS              sponsored or organised credit reference system.
S.A.", which provides banks with the "negative"    However, a private company - The Irish Credit
                                                   Bureau - is the main central credit referencing
record of consumers. This data bank was put in
                                                   system in Ireland used by credit institutions.
place by almost all the banks established in       Institutions also use both formal and informal credit
Greece     #                                       scoring techniques##




It is a privately organized data bank in form of   Credit referencing system - organisation##The
a societe anonyme. Its shareholders are banks      Irish Credit Bureau was established in 1965 by
and one factoring company. Its details are as      a number of financial institutions. Hence it is
follows :#10, Massalias st., 106 80 Athens,        privately organised by the industry itself. The
Greece#http:/www.tiresias.gr#It consists of        stated objectives of the member institutions in
two major data banks : a)The System of             establishing the ICB were:##„To assist in
Financial Behaviour and b) The Identity            lowering the cost of credit, enable faster
cards/Passports bank which have been               decision making in the provision of credit, and
lost.#TIRESIAS is supposed to provide              aid in the avoidance of over-indebtedness of its
information only to Banks, to Companies which      members „customers‟.##
issues and manage cards, to Leasing
companies, Factoring Companies and to public
organizations.#Moreover, (according to Law
2472/97 on protection of private data , art.12)
every natural person has access to TIRESIAS in
order to know whether it has data referring to
him/her.
To date TIRESIAS provides only default             Credit referencing system - operation##The
registration. It has nevertheless announced        following extract from the Data Protection
that a positive registration system will be soon   Commissioner‟s Annual Report summarises the
put into place. TIRESIAS has been licenced by      situation with regard to electronic credit
the Private Data Protection Authority to collect   referencing in Ireland: - ##„The information
data for positive registration, but only if the    which is held on the ICB database relates to
consumer is being informed and has given           credit agreements between these ICB members
his/her consent. #As far as default is             and their customers. A condition of such
concerned, TIRESIAS data bank collects             agreements is that the customer agrees that
information from the following sources :#a) the    the financial institution may use the data
banks (non-paid checks, cancellation of credit     supplied for the purpose of credit
contracts, of credit card contracts etc)#b) the    checking.##Consequently, where an individual
courts (bankrupcies, petitions for bankrupcies,    enters a credit agreement with an ICB member,
orders to pay etc)#c) land registries              details of the individual‟s performance in
(mortgages etc)#d) the Ministry of Finance         complying with the terms of the agreement
(fines imposed for tax infringements)              (either in positive or negative terms) are
                                                   inputted onto the ICB “credit file” database,
                                                   which may be accessed by all member
                                                   institutions of ICB. Each time a person applies
                                                   for credit from an ICB member, that institution
                                                   accesses the ICB‟s “credit file” to ascertain the
                                                   applicant‟s performance under any previous
                                                   credit agreements with ICB members.##A
                                                   measure of the scale and significance of the
                                                   credit referencing system in Ireland is the fact
                                                   that, at present, ICB holds 2.7 million names
                                                   and addresses on its “credit file” database. The
 Problems created are the following :#a) an        Special legal problems for the debtor##We are
error concerning registration#b) delays in         not sure exactly what this question is getting
registering of payment of debt#c) there are        at. There are no direct legal consequences
complaints for leak of information to third        flowing from information held on the bureau as
persons not entitled to possess such               far as we are aware. A creditor could, in theory
information (see above under 20)#                  raise the multiple nature of a consumer‟s credit
                                                   commitments in court proceedings but we are
                                                   not sure how this would help their
                                                   situation.##The data subject who is adversely
                                                   affected by improper use of data can under
                                                   Section 6 of the Data Protection Act have the
                                                   right to have incorrect information held about
                                                   them rectified or erased as
                                                   appropriate.##Section 10 empowers the Data
                                                   Protection Commissioner to investigate
                                                   complaints and enforce the Act‟s provisions.
                                                   ###
Spouses or children, as well as any other third    Items 23, 24 and 25 - Preconditions for co-
person, has no liability whatsoever for any kind   liability##Under the Consumer Credit Act, it is
of debt of the indebted person unless it has       an offence to send circulars knowingly to
signed the relative contract as a guarantor.       minors (S.139) offering credit and, in general
Where children are concerned, they cannot          terms, credit agreements with minors will not
guarantee and be liable with their own             be enforceable in contract law, except insofar
resources unless they are minimum 18 years         as they are for the minor to provide for
old.#In practice, if the bank considers that the   „necessaries‟.##A spouse will not be jointly
income of the interested person is not             liable for the debts of his/her spouse unless
sufficient, the bank asks from that person that    s/he is in some way a party to the agreement
his/her spouse signs the contract too either       in question, either as a co-signatory or as a
together with the interested person or as a        part of an ongoing or new guarantee. If the
guarantor to the contract. In both cases, the      spouse is a party to a credit agreement with
spouse has full liability under the contract.      his/her spouse, both parties will generally be
According to the Nr 2501/31.10.2002 Act of the     „jointly and severally liable‟ i.e. both fully
Governor of the Bank of Greece (see above          responsible for the debt, regardless of whether
under 16) the bank has exactly the same            the spouse derived any actual benefit from the
obligations for providing information to the       credit in question or facilitated repayments
guarantor (art.4b) #                               from an account of their own. There is some
                                                   evidence from the Money Advice and Budgeting
                                                   Service (MABS) of individual cases of hardship
                                                   caused by co-liability in these type of
                                                   circumstances but it has not received political
                                                   attention.##Under the Family Home Protection
                                                   Act 1976, a spouse cannot mortgage or give
                                                   the family home (in his/her sole name) as
If a child of less than 18 years old signs a credit See above
contract, such contract is void according to our
civil code. If the spouse or other relative has
not signed the credit contract, the creditor
cannot issue proceedings against him/her and,
if they do, they will be rejected by the
court.#According the general clause of our Civil
Code (art.178) a contract contrary to good
morals is null and void. Enforcing this article in
the case of guarantors one may claim that
guarantees signed by relatives who, acting
sentimentally, undertake severe financial
obligations towards banks, while being of a
weak financial situation, have no personal
benefit of the contract they guarantee and are
not properly informed by the bank, may claim
that such guarantees are null and void based
on art.178 and 188 of the Civil Code )

No.                                               See above
yes; #1. For "non-banking" credit yes (please         Default interest rate##There is no maximum default
see above under 8) . It is 2% above the             interest rate set by legislation. ##
interest rate. To date such default interest rate
is 10,75% #2. For banking credit maximum
default interest rate is a percentage of 2,5% on
top of the contractual interest rate as agreed in
the credit contract. #PLEASE NOTE : This
default interest rate is due, as long as the credit
contract is valid. If the credit contract has been
early terminated upon written notice of the
bank and the whole amount of credit is due, the
default interest rate since such written notice is
the one provided by law, i.e. currently
10,75%.#




#YES, please not the following restrictions #1)       Restrictions re debts in default##A licensed
ANATOCISM FOR CONTRACTS CONCLUDED                     moneylender, according to S.112 of the CCA 1995, is
BEFORE 1998-Credit contracts may provide that         prohibited from increasing charges on default.
                                                      Otherwise, there are no legislative restrictions
interest in default is anatocised after the first
                                                      concerning payments in default. Default (or penalty)
day of default every 6 months (or longer period       compound interest is common in credit agreements
if agreed-smaller period is forbidden)-Law            in Ireland running as high as 2% interest on arrears
2601/1998 art.12 par.1). The first day of             per month in some car finance hire purchase
default may be either defined in particular in        agreements. Equally, it is not uncommon for some
the contract or be the first day after notice in      mortgage lenders to charge significant default
writing by the bank.#b) If there is no                interest. ##It is our view that the Unfair Terms in
                                                      Consumer Contracts Regulations (the Irish version of
agreement in the credit contract regarding
                                                      the directive does not exclude financial services)
anatocism, then anatocism may take place              could be used to challenge unduly punitive default
according to the general provision of art.296         interest but the machinery is inadequate at present.
and art. 110-110 of the Introductory Law to the       Finally, the common law rule against extortionate
Civil Code. Art.296 provides that interest on         credit bargains might be raised##
interest may be paid only if agreed or only after
issuing proceedings.But in both cases the
interest due may refer to a period of one whole
year at least. As an exception to this rule,
art.111 of the Introductory Law to the Civil
Code provides for the possibility of anatocism
every six months - but this is not relevant to
consumer contracts.#As a result, consumer
credit contracts may provide a 6 months
anatocism. If they do not provide for
anatocism, anatocism may take place every 12
) Being in default is according to general          Early termination##A consumer in breach of an
clauses of civil law the precondition for early     agreement (by default in payment for example)
termination of a consumer credit contract.          must be given 10 days notice of any intended
Credit contracts usually provide for the            action that might be taken by the creditor. The
conditions which would justify early termination    notice must set out details of the agreement
of the contract. The most common wording            sufficient to identify it and the relevant breach,
would be "The bank may terminate this               together with what can be done by the
agreement in case of any breach of any clause       consumer to remedy this. A consumer also has
of this agreement by the client". As far as         21 days (including this 10 day period) to put
default of financial obligations is concerned,      matters right by bringing the agreement up to
credit contracts provide for a specific number of   date, for example by paying instalment arrears
instalments due as a precondition for such early    and interest (S. 54 Consumer Credit Act 1995).
termination. In many consumer credit contracts      Only when this period elapses may legal action
it is provided that even one instalment due or      be taken by the creditor to enforce the
part of one instalment due, or any other charge     agreement.##If a creditor wishes to bring an
due is sufficient for the cancellation of the       agreement to an end prematurely on the
contract. Such a term in a credit card contract     occurrence of some event permitted by the
(one instalment due) has been judged as unfair      agreement (for example, inaccurate information
by Decision 1219/2001 of the Supreme Court          supplied by borrower), 10 days notice must be
(see above under 8). Moreover, the Ministry of      provided to the borrower of the action to be
Development has issued a recommandation in          taken by the creditor.##These rules apply to all
1999 towards the banks, according which the         agreements regulated by the CCA except
number of instalments due before an early           housing loans######
termination of a credit contract should not be
less that three (3).




#There are no particular provisions in the law      See above
for early termination in the case of consumer
credit contracts. According the general
provisions of our Civil Code, unless otherwise
provided in the contract, the creditor should
announce early termination in writing referring
to the reason of such early termination. Most
contracts provide that such a notice is not
needed. In practice, though, creditors do notify
consumers in writing of the early termination of
the credit contract making reference to the
amount due at the time of such early
termination.#
yes; #The only legal provision concerning           Regulation of Intermediaries##Yes. Intermediaries
intermediaries specifically in bank transactions    are regulated under the Consumer Credit Act. Credit
is article 12 of Joint Decision F1 983-1991         intermediaries are regulated by S.144-148 of the
                                                    Act. Mortgage intermediaries are regulated by S.116-
(please see in detail above under 7), according
                                                    121. Insurance and investment intermediaries are
which intermediaries must be registered at the      regulated under separate legislation.##Both credit
Chambers of Commerce and Industry of each           and mortgage intermediaries have to have an
region, to which they notify this activity. The     authorisation (currently decided by the Office of the
Chamber of Commerce and Industry establishes        Director of Consumer Affairs) and must display their
a list of the intermediaries registered, which is   authorisation at their business premises. ##Credit
accessible to anyone interested. The above          intermediaries (the most common example being car
                                                    dealers) must have a letter of recognition from each
procedure is supervised by the Minister of
                                                    undertaking they act for and they must specify the
Development. The administrative control is held     nature of the finance that is being arranged to the
either ex officio or after request of anyone who    consumer in writing before the agreement is entered
proves to have a legal interest. For each breach    into (S.148). They must also disclose the fact that
of the above duties a fine up to 60.000 euro is     they are in receipt of some form of consideration
imposed, which can be doubled in case of            from the institution for whom they act.##Mortgage
relapse.#There is unfortunately no special and      intermediaries must also have an appointment in
                                                    writing from each undertaking for whom they act but
more detailed regulation on this matter. For the
                                                    there does not appear to be any obligation to
rest, one must have recourse to the general         disclose the fact that they may receive a commission.
provisions of the Civil Code on intermediaries      ##Both must pay fees in order to obtain their
(art.703-708), as well as to the Banking Code       authorisation but there is no regulation of any fees
of Conduct (articles 91-100).#According to art.     that they may charge themselves. In practice, any
703 of the Civil Code the fee of the                fees they would charge would be to the institution for
intermediary is only paid if the contract is        which they act rather than the consumer. On the
                                                    other hand, mortgage brokers who do charge
concluded due to the intermediary's indication.
                                                    consumers fees for arranging mortgages are at
No maximum fee is provided in the law.              Supervision of Intermediaries##At present both
#There is no effective supervision of the skills
and practice of intermediaries, apart from the      intermediaries are regulated and supervised by the
fine which is imposed by the Minister of            Office of the Director of Consumer Affairs although
                                                    mortgage intermediaries will be taken over by IFSRA
Development in case they have not registered
                                                    and credit intermediaries may be. ODCA has done a
themselves.#Only in the Banking Code of             good job with a skeleton staff but there is no doubt
Conduct, which as mentioned above is not            that extra resources would help to provide more
legally binding, it is stated that the              effective supervision. ##
intermediaries must meet some standards, such
as: capacity to contract, completion of 12
years school education, no criminal record
regarding financial crimes and independence
form the bank's service as active employee. A
written contract between the bank and the
intermediary is also essential. Upon signing the
contract the bank must check all the above
preconditions that the intermediaries or their
employees should meet. The terms of that
contract along with the determination of the
remuneration of the intermediaries should be
announced also to the Hellenic Bank
Association, where a confidential file of such
contracts is kept.      #
no#There is no special liability for               Item 32 – Liability of Intermediaries##If the
intermediaries in credit transactions.#            intermediary is a party to the agreement in the sense
                                                   that they have been responsible for the provision of
                                                   goods or services (i.e. a car dealer or a furniture
                                                   showroom) but not for supplying the credit, they will
                                                   be liable for the condition of the good+K64s. ##In
                                                   general, even where goods or services are bought on
                                                   credit, the consumer must take the matter up with
                                                   the seller or supplier. ##An exception to this is
                                                   Section 80 of the Consumer Credit Act 1995 (which
                                                   repealed s32 Sale of Goods and Supply of Services
                                                   Act 1980). This provides that persons (for example
                                                   credit institutions) involved in arrangements to
                                                   facilitate a purchase of goods on hire purchase shall
                                                   be jointly and severally liable with the owner for any
                                                   breach or misrepresentations made with regard to
                                                   the agreement. Hence where goods have been
                                                   purchased by a client in such a fashion and these
                                                   turn out to be faulty, s/he has the right to look to
                                                   either the owner or the credit provider for suitable
                                                   redress (such as a refund/replacement/repair)
                                                   depending on what is reasonable in the
                                                   circumstances.##A further exception is provided by
                                                   s14 Sale of of consumer credit##See point 1 for
yes; #Please note the existing restrictions set by Other formsGoods and Supply of Services Act 1980,
Acts of the Governor of the Bank of Greece in      specific criteria that apply to different forms of
the following forms of consumer credit: #a)        lending (credit sales, credit cards, overdrafts, cash
                                                   loans, moneylending agreements including mail
personal loans may be agreed and granted of a
                                                   order) under the Consumer Credit Act.##Credit
maximum sum of 3000 euros. Every person can Union loans are not classed as consumer credit -
have only one such a loan. This is why the         they are regulated under the Credit Union Act
applicant of such a loan has to sign a statement 1997.##
towards the bank that he has no dept of a
similar kind of credit toawrds another bank.#b)
Overdrafts cannot exceed the sum of 8804
euros.#c) The so-called "credit loans" which are
given only for purchase of consumer goods may
be granted up to a sum of 23.500 euros.This
maximum sum should include any other loan of
category (a). #Please also note there are
discussions going on concerning the
abolishment of the afore-mentioned
restrictions, which is highly possible to see
happenning.#
yes; #General provisions of our Civil Code are       Over indebtedness##There are no general conditions
being in many cases applied by the courts in         in terms of the examples specified in the question.
proceedings issued by debtors against creditors.     The Irish legal system in relation to debt
                                                     recovery/enforcement is in drastic need of reform
These provisions are:#1) Art. 281: Abuse of
                                                     and modernisation to reflect developments in Europe
right (for the exact wording of the article-please   and beyond. (See forthcoming FLAC report – Item 2
see above under 8).#2) Art.288 : Same                – Relevant literature
wording as art.242 of the german BGB : Der
Schuldner ist verpflichtet, die Leistung so zu
bewirken, wie Treu und Glauben mit
Rucksichket auf die Verkehrssitte es erfordern.
#3) Art.178 and 179: Same wording as art.138
German BGB : Ein Rechtsgeschaeft , das gegen
die guten Sitten verstoesst, ist nichtig. Nichtig
ist insbesondere ein Rechtsgeschaeft, durch das
jemand unter Ausbeutung der Zwangslage, den
Unerfahrenheit, des Mangels an
Urteilsvermoegen oder der erheblichen
Willensschwaeche eines anderen sich oder
einem Dritten fuer eine Leistung
Vermoegensvorteile versprechen oder
gewaehren lasst, die in einem auffaelligen
Missverhaeltnis zu der Leistung stehen. #

no#No, utility companies are free to cut off         Utilities##There are no such provisions (though
consumers if in debt. The level of debt differs in   appointed Regulators act as watchdogs over the
some cases according to the some categories of       general policies of privatised utilities) and some
                                                     progress has been achieved in preventing cutting off
consumers-e.g. people with special needs are
                                                     by utilities for non–payment of instalments in
only cut off by the major telecom company in         relation to credit sale agreements as opposed to
Greece (OTE S.A.) for a debt of more than 1000       supply of service. (For example, both the national
euros. It is nevertheless true that most former      electricity and gas utilities are also major suppliers of
public utility companies are sensitive in this       appliances by way of credit sale).##
matter and are tolerant towards indebted
consumers.#
No, there is no specific regulation to protect         Evictions##With regard to notices to quit in private
consumers against eviction by landlords. The general   rented accommodation, the Housing (Miscellaneous
provisions of Civil Code apply.                        Provisions) Act 1992 requires that the party ending
                                                       the agreement (normally the landlord) must give the
                                                       other party (normally the tenant) advance notice of
                                                       their intention to end the agreement and of the date
                                                       on which it is to come into effect. Under this Act, the
                                                       notice to quit must be in writing and served at least
                                                       four weeks before it is due to come into effect (Three
                                                       months notice is required on a quarterly tenancy).
                                                       There does not have to be a valid reason to
                                                       terminate the tenancy##Regulations under the Act
                                                       further require that the written notice must be signed
                                                       by the landlord or his lawful agent, must be dated,
                                                       specify the date on which possession is to be given
                                                       up, clearly describe the property and that the notice
                                                       is normally required to be personally served on the
                                                       tenant. Once a properly served notice to quit
                                                       expires, the landlord must still apply to the relevant
                                                       court for an eviction order if the tenant refuses to
                                                       leave. ##On the other hand, if the tenant has a
                                                       specific lease in writing, the tenancy can only be
                                                       #terminated in accordance with the terms of the
                                                       lease.##




no#There are no provisions for relief from             Provisions for Relief##Tax arrears and recovery of
taxes, public fees and fines concerning indebted social security overpayments#Extra time to pay may
persons.#                                        be granted in line with specified procedures available
                                                       to the public under the Freedom of Information Act
                                                       on the respective government websites
                                                       (www.welfare.ie and www.revenue.ie)##Refuse
                                                       charges (levied by local authorities i.e.
                                                       municipalities) #There are means tested exemptions
                                                       on low-income grounds applied by various local
                                                       authorities in respect of local refuse charges.##Local
                                                       authority rents - hardship clause#The Guidelines for
                                                       Local Authorities on Rent Assessment, Collection,
                                                       Accounting and Arrears Control (drawn up by the
                                                       Housing Unit operating under the auspices of the
                                                       Government Department of Environment) provide
                                                       that „local authorities should ensure that their
                                                       differential rent scheme includes a hardship clause
                                                       which makes provision for the acceptance of a lower
                                                       rent than that required under the terms of the
                                                       scheme, in exceptional cases where payment of the
                                                       normal rent would give rise to hardship‟.##TV
                                                       licences #By voluntary agreement between An Post
                                                       (the Post office) and MABS, An Post will grant a 3-6
                                                       month moratorium following contact by MABS for
                                                       more time to purchase the licence which is
                                                       compulsory. ##Fines#Petitions may be made to the
no#According to art.464 of our Civil Code, what   Assignment of wages##NOTE: We are assuming,
cannot be garnished cannot be assigned too        given the reference to garnishment in subsequent
(art.464 of the Greek Civil Code). According to   questions, that you mean here assignment of wages
                                                  as part of the credit contract as opposed to by court
art.982 par.2 of our Code of Civil Procedure,
                                                  order or on a legislative „tables‟ basis in these
wages cannot be garnished (see below under        questions. ##In this context, assignment of wages is
43). #                                            neither allowed nor prohibited by law but in practice
                                                  is never written into credit contracts. However, given
                                                  that there is no law allowing attachment of earnings
                                                  in relation to non-payment of civil debt yet (there
                                                  have been proposals) either, any such attempt would
                                                  be unlikely to be upheld.##




yes; #Wages cannot be assigned in Greece. See     See above
above under 38.#
no#Debt collection is very recent in Greece. Till    Items 40, 41 and 42 - Private debt collection##No.
recently collection was enforced either by the       private debt collection is not regulated under Irish
special departments of the banks or, through         law in terms of the licensing of debt collectors or the
                                                     setting of maximum fees or collection costs.
"outsourcing", to law offices. In the last three
                                                     Nonetheless, many credit institutions use private
years some societe anonyme have been                 debt collectors as an alternative to or in advance of
established for debt collection. They employ         legal proceedings.##There is a lot of anecdotal
some lawyers and bailiffs, as well as other          evidence of debt collectors representing themselves
administrative personnel who use the                 as having statutory powers in order to intimidate
"signatures" of lawyers. Both law offices as well    debtors into payments but in reality, there is no
as these companies are paid according to the         obligation on a debtor to deal with a debt collector in
                                                     any way.##As a result of this potential harassment
collected sums (percentage
                                                     of debtors by debt collectors and indeed, creditors,
agreed).#Nevertheless, article 40 of the Code        the Non-Fatal Offences against the Person Act 1997,
on Lawyers provides that persons that provide        provides as follows:##Demands for payment of debt
services which should be provided by a lawyer        causing alarm, etc.##S.11.(1) A person who makes
according to this Code must be prosecuted on         any demand for payment of a debt shall be guilty of
the basis of art.175 of our Penal Code. #On the      an offence if
basis of this provision of the Code on Lawyers
such dept collection companies are forbidden
and their licence of societe anonyme could be
revoked. Nevertheless, to our knowledge no
such issue has yet been raised either to the
courts or the Bank of Greece as supervisory
authority of the market of the banks.#

There is no code of practice, commercial
reputation or other. The debt collection societe
anonyme have been established on the basis of
the general licence is no specific regulation for
#No, because therenecessary for the                  See above
collection.#Since debt collection is not
regulated, and under the threat of art.40 of the
Code for Lawyers, the afore-mentioned
collection agencies (societe anonyme) appear to
the debtors to act in the name of the bank and
not on their own behalf. As a consequence they
do not ask from the consumer any extra
charges where they are concerned. #In any
case, credit contracts usually include a provision
whereby the consumer accepts to pay any
charges in relation to the contract. Enforcing
this contractual clause, banks use to charge
the debtor with the cost of every letter, formal
or not, any valuation of property, information
concerning the outstanding dept etc.#Please
note that remuneration of bailiffs is regulated in
detail for every act. As a consequence there is a
maximum cost for i.e. notification by a bailiff of
court order, for garnishment of mobile or
immobile property etc. This cost is paid in
advance by the creditor to the bailiff, but is in
the end charged to the debtor.#
#See above art. 40 of the Code of Lawyers.#         See above




#According to article 982 par.2 of the Code of      Item 43, 44 and 45 - Wage Garnishments##As
Civil Procedure wage garnisment is prohibited.      stated in the response to Items 38 and 39, wage
There is only one exception to this rule :          garnishment (or what we call attachment of
                                                    earnings) is not available to creditors in civil debt
#Wage garnishment is allowed only for
                                                    cases as of yet, although there have been proposals
maintenance claims provided in the law or in a      to introduce legislation in this area in recent years.
will or for contribution to the income of the       (Again FLAC‟s forthcoming report looks at these
family. In that case the garnishment is allowed     issues in detail)##Attachment is only available at
only up to one-half of the wage, after the          present as a means of enforcing a Maintenance Order
following elements are taken into account :# -      made in respect of the financial support of a spouse
the income of the person concerned, #- the          and/or child by the other spouse under the Family
                                                    Law (Maintenance of Spouses and Children) Act
financial obligations relater to the family needs
                                                    1976. Maintenance in this sense is another word for
and #- the number of the persons entitled to        alimony or child support. Further details of how this
maintenance. #                                      works can be supplied if required.
Things exempted from garngished (art.953           See above
par.3a and art. 954 par.3 of the Code of Civil
Procedure) : a) items of the personal use of the
debtor and the debtor's family, is such items
are necessary for their fundamental needs (e.g.
clothing, furniture, electrical appliances-for the
latter there are different opinions in our
jurisprudence)#b) food necessary to the debtor
and the debtor's family for three months since
the garnishment.#c) letters, financial
documents, professional books, personal
documents of the debtor#d)books, musical
instruments, articles for the debtor's or
debtor\s family scientific, cultural and spiritual
development.#e) for debtors who live on their
personal work all machinery, books or other
articles necessary for their work (examples
from jurisprudence : the boat of a fisher, the
sewing-machine for a dress-maker, the taxi for
a taxi-driver, the seats for a hair-dresser
etc).#f) agricultural products which are not yet
to ripe (for farmers).


##No.#                                           See above
What is the legislation in your country that applies to   Consumer bankruptcy##NOTE: There is bankruptcy
consumer bankruptcy? Please give the name of the          legislation (as described below and inItem 1) but this
law:#BANCRUPTCY IS REGULATED ONLY FOR                     is wholly inappropriate to, and hardly ever used by,
TRADERS. THERE IS NO CONSUMER                             debtors or creditors in respect of consumer debt. Its
BANCKRUPTCY LEGISLATION.                                  relevance lies primarily in the context of (small)
                                                          business debt where a sole trader does not have the
                                                          cover of limited liability and is seeking protection
                                                          from his/her creditors pending the organisation of
                                                          some form of offer of partial repayment (called a
                                                          deed of arrangement). It is estimated that in any
                                                          legal year, there is unlikely to be any more than 30
                                                          official bankruptcies for the entire country.#Thus,
                                                          the standard elements present in many European
                                                          debt settlement schemes – social force majeure,
                                                          fresh start etc are not present in the Irish situation,
                                                          although a debt settlement scheme agreed between
                                                          MABS (with FLAC) and the Irish Bankers Federation
                                                          (IBF) is currently being run on a pilot
                                                          basis.##Bankruptcy Act, 1988##The legislation
                                                          covering bankruptcy is the Bankruptcy Act
                                                          1988##Once adjudicated bankrupt, the debtor‟s
                                                          assets vest in the Official Assignee (an officer of the
                                                          High Court) or a trustee (liquidator) chosen by the
                                                          creditors. ##A person can only apply for a discharge
                                                          (unless the debts are repaid in total) after 12 years
No                                                        Items 47-73 in they pay preferential creditors
                                                          and only then ifthe questionnaire are not really
                                                          applicable in an Irish context – some points will
                                                          however be made where relevant.##
                                                          Consumer bankruptcy##There appear to be no
                                                          government proposals for reform in this area, though
                                                          a debt settlement approach has been proposed by
                                                          voluntary groups (FLAC research/West-North West
                                                          MABS submission)
Consumer bankruptcy##Where creditors
petition for bankruptcy: -#The debtor must owe
at least €1,905.#The debtor must have
committed an act of bankruptcy. ## Examples
of acts of bankruptcy are: #Filing a petition
oneself or upon service of a Bankruptcy
Summons by a creditor, failing to pay the debt
within the specified 14 day period#Transferring
assets in an attempt to put them beyond the
creditors reach#Deliberately evading creditors
(e.g. by leaving the State for this reason). ###




Consumer bankruptcy##No. Irish bankruptcy
legislation takes the conservative punitive approach.
The stigma inherent in the process, coupled with a
lengthy discharge period (12 years) and the fact that
a person will continue to be a „discharged bankrupt‟
indicate its total unsuitability to a modern consumer
society.##
Consumer bankruptcy##No. There is no mandatory
pre-court procedure in Ireland. ##




Item 51- Consumer bankruptcy##Informally, the
Money Advice and Budgeting Service is engaged in
ongoing negotiations with the credit industry on
behalf of a large number of indebted people and is
now recognised by many creditors as a professional
service with whom repayments can be discussed and
negotiated. To this extent, it might be argued that,
insofar as it concerns clients of MABS, there is a
voluntary pre-court procedure.##There is also a pilot
debt settlement programme taking place in four
areas of Dublin by agreement between the financial
and money advice sectors that may be extended on a
pilot basis to other areas in the near future. ##The
full text of the agreement upon which the pilot is
operating is included below. As you may see, it
operates upon the same sort of principles as many
European jurisdictions in terms of their legislative
schemes.###FINAL – as approved by Banks,
Building Societies and MABS on 4th Dec.
2001###Pilot Scheme for Alternative Debt
Settlement#Points of Agreement between the IBF
and MABS #on a Debt Management
Programme##This document is the result of
meetings that were held between MABS and the IBF,
from November 1998 to December 2001 inclusive, in
Consumer bankruptcy##See a #Pilot Debt
order to formulate agreement on point 50##
Consumer bankruptcy##See point 50###




Consumer bankruptcy##There is no mandatory
pre-court procedure. At this stage, it is too
early to determine the success rate of the debt
settlement pilot mentioned above (See point
51). Informally, MABS is successful in
preventing legal proceedings being brought
against debtors with an inability to pay in many
cases.##




Consumer bankruptcy##There is no mandatory
pre-court procedure. The voluntary pilot debt
settlement programme envisages a 5 year
maximum discharge period.###
Consumer bankruptcy##Not applicable##




Consumer bankruptcy##See points 1 and 46
for detail. However, it is important to
emphasise again that this legislation is entirely
unsuitable for consumer debt situations.##
Consumer bankruptcy##Not applicable##




Consumer bankruptcy##Appointed trustees are
either the Official Assignee (an officer of the
High Court) or a trustee (liquidator) chosen by
the creditors.##




Consumer bankruptcy##After 12 years (but the tag
of bankrupt still applies to the debtor and will show
up whenever anyone searches the bankruptcy
register).##
Consumer bankruptcy#No. There is no such
provision.##




Consumer bankruptcy##Enforcement activities
of creditors##S.38 of the Bankruptcy Act
allows the court to grant a stay on the
realisation of the bankrupt‟s estate as it deems
appropriate, to enable him/her to make a
composition with his/her creditors. Under S.87
of the Act, a debtor may petition for the
protection of his person and/or property from
legal action in order to allow time for a
composition to be made. S.136 provides that,
on the making of an adjudication of bankruptcy
against a debtor, a creditor shall cease to have
any rights except those set out under the Act
and will require the consent of the court to take
any legal proceedings. Finally, S.137 allows the
Official Assignee to apply to the court to have
any legal proceedings against the bankrupt
stayed.##Composition ##The Act provides for
debtors making a composition with their
creditors, supervised by the High Court.
Providing 60% in number and value agree, and
the court approves, the composition is binding
on the other creditors also. An arrangement,
according to a lawyer practicing in this area,
can be drawn up so as to safeguard the family
home (the family home is not protected in the
event of bankruptcy, although the Official
Consumer bankruptcy##See point 46 for detail
on pre-conditions.##




Consumer bankruptcy##It is theoretically
possible to enter a court-supervised
arrangement under which the family home may
be protected (See point 62 for further detail)##
Consumer bankruptcy# #We are not entirely
sure what is meant by this question. However,
given that the Irish legislation is not consumer
bankruptcy legislation at all as such and
contains no provision for write off apart from an
arrangement or a composition, all debts
whether secured or unsecured persist once
proven and must be paid off. Only when 12
years elapses can a write off theoretically occur
and only under certain conditions (see point
46)# ###




See above




Consumer bankruptcy##In theory, as this is
not modern consumer insolvency legislation
where the exemption of priority payments
(such as alimony) and a guaranteed minimum
income might be normal and given that it is
unheard of for employees (as opposed to small
traders) to avail of the Bankruptcy Act, there
are no provisions for retention of income.
However, S.71 of the Act allows the Court „to
make to the bankrupt out of his estate such
allowances as the Court thinks proper in the
special circumstances of the case‟##
See above




Consumer bankruptcy##S.44 of the Act
provides in general terms that all property of
the bankrupt person vests in the Official
Assignee for the benefit of the bankrupt‟s
creditors. S.45 allows the bankrupt to retain
articles of clothing, bedding, household
furniture and tools or equipment of his/her
trade not exceeding €3175. The Court has the
power to decide, on the application of the
Official Assignee or the bankrupt person, which
articles of property remaining are to be sold
(for example motor vehicles) for the benefit of
creditors and can postpone sale and removal
and allow goods to them to remain in the
possession of the bankrupt as appropriate.##
Consumer bankruptcy##The minimum duration of
the bankruptcy will be until full repayment of all
debts due or until a composition is accepted by 60%
of creditors and all payments and costs are made
under it or where the bankrupt has obtained the
consent of all creditors to discharge.#The maximum
duration is potentially the lifetime of the bankrupt
although after 12 years a discharge is possible. This,
however, is dependent upon the Court forming the
view that the estate has been fully realised and that
costs, fees and expenses as well as preferential
payments have been taken care of.##
Consumer bankruptcy##The fees that the
Official Assignee is entitled to charge are
administrative as opposed to personal as s/he is
an officer of the High Court and is not entitled
to remuneration. The details of these fees are
contained in: Superior Fees Order: Schedule 1,
Part 7 – Fees payable in the Office of the
Official Assignee in Bankruptcy. A copy of these
can be provided upon request. These fees are
also payable under this order to the creditor‟s
trustee where appropriate. Finally, S.112 of the
Act allows a statutory sitting of creditors to
appoint their trustee and to make provision for
his/her remuneration.##

See above




Item 73 – Consumer bankruptcy##These have
already been outlined in detail (see in particular
the note at Item 46). In summary, this is a
totally unsuitable vehicle for self declared
consumer bankruptcy. Equally, because of the
potential expense involved, it would not be wise
for a creditor to seek to bankrupt a debtor
unless there was evidence that that person had
resources to offer at least partial payment. For
example, it is estimated by one practitioner in
the area that with advertising costs and
solicitor‟s and barrister‟s fees, the costs in a
bankruptcy case will almost certainly exceed
€7500. ##(Source: Debt Collection and
Enforcement of Judgments, Continuing Legal
Education, Law Society, Dublin 1998
No.#There is no special law on dept counselling   Debt Counselling #There is no specific law on debt
in Greece.#                                       counselling.##




No answer (see answer in question 74)             Debt Counselling#There is no specific law on
                                                  debt counselling.##
Since there is no special law regulating              Debt Counselling#Although there is no licensing
provision of debt advice as a profession (see         system for debt counseling/money advice, the
answer in question 74), such advice might be          network of Money Advice and Budgeting
(theoretically though-please see below under          Services (MABS) is State funded and continuing
77) provided as a service under the general           funding is dependant on each service satisfying
conditons for a trade, i.e. be provided by            the Department of Social and Family Affairs
professional advisers or legal entities that have     (the funders) that it has met the objectives of a
included this acitivity in their statutes and have    three year plan that each service must set
stated (registered) to do so in the competent         itself. MABS is supported by a National Training
Chamber.#                                             and Community Development Service located
                                                      within Comhairle which has responsibility for
                                                      the training and development of staff and
                                                      voluntary management committees and has
                                                      produced „A Good Practice Manual for Money
                                                      Advisers‟.##




With the exception of EKPIZO, which provides          Item 77 - Debt counselling#The State funded
assistance to ovenindebted consumers as part          network of Money Advice and Budgeting
of the Legal Protection Office it runs since 1992,    Services (MABS) is the only dedicated money
we do not know of any agency providing debt           advice service operating in Ireland.##
advice. Such a service is not yet known in
Greece. If any debt advice is given, it might be
given sporadically by a lawyer or an
accountant. #E.K.PI.ZO Consumers' Association
initially run a project for help to overindebted in
1998. E.K.PI.ZO's employees were invited in
Newkastle (UK) to work with debt
advisors.#E.K.PI.ZO provides since then court
oriented assistance to indebted consumers who
are in dispute mainly with banks. It also
invervenes in a pre-court stage acting on
behalf of the indepted consumer towards the
lender (bank) in order to reduce the amount of
credit due and settle the dispute or check if the
interest charged to the consumer by the bank
has been calculated in the proper way or
demand information that the lender (bank)
should provide the consumer but refuses to do
so. Please note that E.K.PI.ZO has the right to
represent consumers either collectively or
individually if they become a member of the
association (Law 2251/94 art.9). Please also
No answer. Please see above under 77.                 Debt counselling#MABS grew out of a report
                                                      into the area of moneylending which
                                                      recommended amongst other things the setting
                                                      up of a money advice service targeted at low
                                                      income families. MABS is funded by one central
                                                      government department (Department of Social
                                                      and Family Affairs), with a national set of aims

                                                      To provide an independent, free and
                                                      confidential MABS to the target group to
                                                      facilitate them to cope with their immediate
                                                      debt problems and become financially
                                                      independent in the long-term.#Objective Two




There is no particular provisions for debtors and     #The Civil Legal Aid Act 1995##The following
in general free legal aid is extremely restricted     are the main features of the civil legal aid
in Greece.# General provisions of our Code of         scheme:-##The Legal Aid Board##The Board
Civil Procedure (art.194-204) provide that legal      provides legal aid and advice in civil cases to
aid may be granted to those persons who prove         persons who satisfy the requirements of the
not to be able to pay the expenses of a trial         Civil Legal Aid Act 1995 in that their means
without being deprived of the necessary means         must be below a certain limit (details of which
for the maintenance of his family and himself.        are contained on the Board‟s website
Legal aid is granted from the court, in which         www.legalaidboard.ie ) and there must be
the proceedings are pending, or if legal aid is       sufficient merit in the case (Note - this does not
related to acts irrelevant to a trial, by the Juje    apply in family law matters). It makes the
de paix of the residence of the applicant.The         services of solicitors, and if necessary
court appoints a lawyer, a notary and a bailiff in    barristers, available to persons who satisfy the
order to represent the applicant without any          relevant criteria, at reduced cost. ##Certain
remunaration.#As afore-mentioned the above            types of cases are not covered by the Act, such
provision are of restricted practical significance.   as disputes concerning property, conveyancing
#                                                     and representation before tribunals.##In the
                                                      context of over-indebtedness where recovery of
                                                      the debt is being sought by a creditor through
                                                      legal proceedings, there will generally be no
                                                      entitlement to civil legal aid as the debtor will in
                                                      most cases fail the merits test in that s/he is
                                                      unlikely to have grounds for defending the
                                                      proceedings. Most debtors owe the money
                                                      claimed and merely wish to be granted more
                                                      time to pay in accordance with their means.
#No.#There is unfortunately no financial        Financial education for over-indebted
education of any kind for overindebted people.# people##Community Education as part of MABS
                                                work##One of the seven objectives of MABS when it
                                                was established in 1992 under the auspices of the
                                                Department of Social, Community and Family Affairs,
                                                reads as follows: ###„To facilitate the target group
                                                to develop the knowledge and skills required to avoid
                                                getting into debt or to deal effectively with debt
                                                situations as they arise‟. ###One to one education -
                                                education is an integral element of the money advice
                                                process. Money advisers working with individual
                                                clients build in ways to facilitate clients to develop
                                                both knowledge and skills through a self help
                                                approach whereby clients are empowered and
                                                dependency discouraged. ##Community education -
                                                most MABS also provide „education‟ as a separate but
                                                complementary strand to their case work and provide
                                                to varying degrees what has become known as
                                                „community education‟. For some MABS this consists
                                                primarily of short, promotional and awareness raising
                                                talks delivered, on request, to community, voluntary
                                                and statutory groups in each locality. Others do
                                                sessions with young people in local schools. Some
                                                design and/or deliver programmes consisting
                                                typically of around 6-8 sessions covering a variety of
                                                aspects of money management.##In adopting this
                                                „twin‟ approach, MABS can recognise the importance
                                                of empowering individuals within communities
                                                whether or not they ever approach the service itself,
                        Italy                                              Luxembourg

Unfortunately there's no italian legislation           All available documents are attached or
concerning consumer bankruptcy now (even if            annexed to this document.#
general bankruptcy law reform is in act); see
for some frameworks art. 1186 civil code (in
attachment), on the matter of anybody's
insolvency; there's a discussion about the
meaning of "insolvency" in this rule: someone
thinks it's the same idea of bankruptcy law
(inability to pay obligations "regularly", as they
become due: art. 5 italian bankr. l.); but there
are many writers (and courts) who think that's
a static concept, in comparison to the dynamic
of the bankruptcy rule (finally, the debtor not
entreprenuer should be insolvent when his
liabilities exceed his assets).




#http:// You can find almost all rules cited in this   There is an Internet site bringing together all the
paper (but many texts are in attachment anyway)        Luxembourg legislation:#http:// www.legilux.lu#or
in this website: www.gazzette.comune.jesi.an.it.       the internet site for the Chambre des Députés :
Excerpts of italian civil code (almost all rules       www.chd.lu#Most documents are annexed. #
cited in this work) are also in attachment.#
You can see:#1) G. Alpa, Credito al consumo,                   1. Vademecum du surendettement - M. André
in Digesto civ., V, Torino, Utet, 1989, p. 22;#2)              THILL - Ligue luxembourgeoise de Prévention et
G. Ferrando, Credito al consumo: operazione                    d'Action médico-sociales - 1996#2. Les saisies-
economia unitaria e pluralità di contratti, in                 arrêts et cessions spéciales - M. Thierry
Rivista del diritto commerciale, 1991, I, p.                   HOSCHEIT - Editions Paul Bauler - 2000 ( book
591;#3) M. Gorgoni, Credito al consumo e                       of 291 pages )#3. La nouvelle loi sur le
leasing traslativo al consumo, in Rivista                      surendettement - M. Michel NEYENS - Bulletin
trimestrale di diritto e procedura civile, 1992, p.            luxembourgeois des questions sociales - volume
1123;#4) R. Pardolesi- N. Squillace, Disciplina                9 - 2001 and volume 11-2002#
del credito al consumo, Milano, Giuffré,
1993;#5) A. Dolmetta, Due quesiti
sull'individuazione della disciplina regolatrice
delle operazioni di credito al consumo, in Banca
borsa e titoli di credito, 1993, I, p. 156;#6) G.
Alpa, L'attuazione della direttiva sul credito al
consumo, in Contratto e impresa, 1994, p.
6;#7) G. Roddi, Il contratto di credito al
consumo, in Società e diritto, 1994, p. 396;#8)
M. Gorgoni, Il credito al consumo, Milano,
Giuffrè, 1994;#9) G. Ferrando, Contratti
collegati: il caso del credito al consumo, in
Nuova giurisprudenza civile commentata, 1995,
I, p. 305;#10) P. Gaggero, Diritto comunitario
e disposizioni interne in materia di credito al
consumo, in Contratto e impresa, 1996, p.
622;#11) P. Sirena, I contratti bancari di
credito al consumo, in Nuove leggi civili
commentate, 1997, p. 1110;#12) G. Carriero,
Il credito al consumo, Banca D'Italia, Quaderni
di ricerca giuridica, N. 48, 1998 (see in
yes#See more Carriero (above), and in attachment; that's the   yes#La nouvelle loi sur le surendettement - M. Michel
most complete paper in this field, with scientific             NEYENS - Bulletin luxembourgeois des questions sociales -
character.#Please provide a copy or indicate                  volume 9 - 2001 and volume 11-2002##Please
where the material is available:##                             provide a copy or indicate where the
                                                               material is available:#The copy is annexed.##
Ministero delle attività produttive (before       Minsitère de la Famille, de la Solidarité Sociale
named Ministero dell'Industria), in particular    et de la Jeunesse - Service Solidarité
Direzione Generale per l'Armonizzazione del
mercato e la tutela dei consumatori, and
Consiglio Nazionale dei consumatori e degli
utenti; they are organs of the Ministero. See for
more information www.minindustria.it




yes; #See l. 30 luglio 1998, n. 281 (in               yes; #There is a Law dated 25.08.1983 in
attachment, modified by d. lgs. 23 aprile 2001,       relation to legal protection of the consumer,
n. 224, in attachment): under this law,               subsequently amended by the Law of
consumers fundamental rights are recognized;          26.03.1997 and that of 27.11.2000. These
in particular right to health, safety, quality of     Laws are annexed.#
products, information, education as consumer;
law recognizes consumers associations (as
included in the list of article 5), that have right
to sue against producers on behalf of
consumers; law also provides tax facilities and
founds Consiglio nazionale dei consumatori e
degli utenti (see above, no 4), that provides
counselling for the Governement and the
Parliament; it should stimulate consumers
access to Justice.#
no                                                  no




yes; #See D. lgs. n. 385/1993 (T.U. banc.), in      yes; #The Law of 9 August 1993 regulating
attachment, artt. 121 ss., which have               consumer credit and the Grand-Ducal
introduced in italian law UE directive 87/102;      Regulation of 15 November 2000 determine the
art. 1469bis, par. 5, civil code (in attachment);   calculation of a fair reduction in the total cost of
rules about usury (l. 7 marzo 1996, n. 108, in      credit, applying the Law referred to above, all
attachment); on this subject see next number.#      of which are annexed.# #
yes; #Under l. 108/1996 (in attachment),             no#The former Grand-Ducal Regulation of 14
interest rates are usuraries when they exceed        October 1963 with regard to setting the
midium rates on the market, increased for the        maximum interest rate in relation to certain
half (ex: medium rate 6, usurary rate 9);            forms of credit was repealed by the Law of 9
Ministero dell'Economia (before Ministero del        August 1993 regulating consumer credit.##
Tesoro) collects every three months interest
rates on the market, and make publication of
the midium. Only usurary interests rate              The maximum interest rates applicable to
inclosed in contracts made after 1996 are void       consumer credit is not fixed by law but is
(see l. 28.2.2001, n. 24, in                         currently between 6% and 7% a year
attachment).#Under Art. 1284 civil code,
clauses on interest rates which exceed legal
rate (now 3%) have to be written (otherwise,
they are void).#Every clause in bank and
financial contracts that refers to customs is void
(artt. 117 par. 6, 124 par. 4 T.U. banc., in
attachment).#




15,81% for credit to natural person and family       The maximum interest rates applicable to
provided by banks.#See the Banca d'Italia            consumer credit is not fixed by law but is
notice, 20 december 2001, in attachment, for         currently between 6% and 7% a year.##
others transactions concerning consumers.##
8,055%.#                                         The mortgage interest rate is not fixed by law
                                                 but is currently between 4% and 5% a year.##




Under anti-usury law, there's no difference      5.5% to 6%#
between big and small business credit; see
Banca d'Italia notice in attachment for the
maximum rates for every kind of transaction in
this field.#



Ministero dell'Economia (before Ministero del    The market and the economic environment
Tesoro), after advice of Banca d'Italia, under   determine interest rates. ##
art. 2 l. n. 108/1996#
#Under art. 1815, par. 2, civil code (modified in   #There is no legal sanction.#
1996), only the clause about rate is void, and
no interest rates will be paid by debtor.#




#Every cost elements have to be inclosed in         #The cost of credit is included in the TAEG to
TAEG (the real global yearly rate), under art.      enable consumers to make an effective
122 T.U. banc. (in attachment); all other costs     comparison. #The Act of 9 August 1993 defines
have to be inclosed in written contracts, in        the "total global annual effective interest rate" -
particular amount and ground; see art. 124,         TAEG) as the total cost of credit expressed as
par. 2, e), T.U. banc. (and 126). See more d.       an annual percentage of the amount of the
lgs. 25.2.2000, n. 63, and d.m. 6.5.2000 (in        loan. The method for calculating the TAEG is
attachment), which have introduced in Italy UE      set by the Grand-Ducal Regulation of 26 August
Directive 98/7#                                     1993 and provides that, to calculate the total
                                                    global annual interest rate the total cost of
                                                    credit to the consumer has to be determined as
                                                    defined by article 2e) of the Law of 9 August
                                                    1993 regulating consumer credit, with the
                                                    exception of the following fees:#(i) fees
                                                    payable by the consumer as a result of the
                                                    failure to meet one or more of his/her
                                                    obligations under the loan agreement;#(ii) fees
                                                    other than the purchase price due from the
                                                    consumer associated with the purchase of
                                                    goods or services, whether paid for in cash or
                                                    on credit;#(iii) fees arising from transfer of
                                                    funds as well as fees relating to maintaining an
                                                    account intended to receive sums debited for
                                                    the repayment of credit, interest and other
                                                    charges, except where the consumer has no
                                                    realistic freedom of choice in the matter and
                                                    where these fees are abnormally high.
Amount of the credit, every condition, the           Loan agreements must be in writing in as many
number and the amount of instalments, with           copies as there are parties to the contract with
maturities (therefore, a real payment plan),         a spearate interest. The consumer and any
must be inclosed in written contract.#Contracts      guarantor must be given a copy of the written
must also specify costs, other than TAEG: if it is   agreement.#The written agreement must
impossible, they have to provide a real              contain:#a) a statement of the total global
(credible) foresight (see art. 124 par. 2 T.U.       effective annual rate of interest and the
banc.)                                               circumstances under which this rate may be
                                                     modified;#b)a statement of the amount or any
                                                     limit on credit;#c) a statement of the term of
                                                     the loan;#d) a statement of the terms for
                                                     repayment of the loan, with particular regard to
                                                     the amount, the number, the frequency of or
                                                     the dates for payments to be made by the
                                                     consumer to repay the loan and to pay interest
                                                     and other charges;#e) a statement of other
                                                     fundamental conditions as provided for in any
                                                     Grand-Ducal Regulation.#




#See art. 124 par. 2 (f-g): under italian law,       #No, the Directive is applied as it is##
there's a duty to disclose guaranties and
insurances which consumer has to provide.#
No, but somone could discuss about a duty to        There is no legal obligation for the creditor to
take account of the debtor'income wich refers       obtain information about the borrower's
to good faith (artt. 1175- 1375 c.c.); in that      income; however, it is usual practice for
way creditor who lends too much in comparison       bankers to carry out a brief analysis of the
to debtor's income could perpetrate a breach of     financial situation of their clients.#
good faith. Only investment enterprises (in
Italy, s.i.m.), that operate in the field of
investment services, have to inquire about
investor's experience, tendency to risk, and
financial conditions (under Rules Consob,
11522/98, art. 28: see it in www.consob.it).




#There's no precedent about the debtor who's        #The responsibility of the creditor in relation to
not entrepreneur (but somone could discuss          reckless lending is not expressly provided for by
about breach of good faith, like above); anyway     Luxembourg law. However, the consumer has
our Supreme Court (Cass., 13.1.1993, n. 343,        a right to take proceedings against the
in Giustizia civile, 1993, I, p. 1189) has passed   lender#a) when the consumer enters into a
judgement on bank's liability that lent money to    loan agreement with someone other than the
an insolvent (under art. 5 bankr. l.): that's a     supplier of goods or services with a view to
secondary liability (art. 2043 c.c.), which         purchasing goods or obtaining services;#b)
attaches on banks that know (or have to know,       when there is a prior agreement between the
under technical and practical sciences)             supplier of goods or services under the terms of
insolvency of the debtor. Trustee in bankruptcy     which a loan is granted exclusively by that
and/or unpaid creditors (there are discussions      lender to the customers of that supplier to
on this matter) can sue upon this grounds.#         obtain goods or services from the said
                                                    supplier;#c) when the consumer obtains the
                                                    loan by virtue of that preliminary
                                                    agreement;#d) when the goods or services
                                                    which are the subject of the credit agreement
                                                    are not delivered or supplied or are only
                                                    delivered or supplied in part or do not conform
                                                    to the terms of the contract;#e) when the
                                                    consumer has made a claim against the
                                                    supplier of goods or services without the claim
                                                    being satisfied as the consumer was entitled to
                                                    expect.##
yes; #We have Centrale dei rischi (see Central
Bank, Banca d'Italia, instructions in
attachment), when informations about bank
lending (over a fixed sum of money, now €
75.000,00), and bank debtor defaults are
inclosed, by the same bank that provides
credit; every bank (and others financial
institutions, under art. 107 t.u. banc.) can
access to Centrale, and reads on line all
inclosed data: in that way, everybody is able to
know how much credit every debtor took from
bank system (but not identity of single bank
lender).#Furthermore, there are some private
credit bureaux, but inclosed data are not so
important for creditors (Crif, that provides also
software for credit risk management, Centrale
dei bilanci, that provides some index and
ratios).#After 4.6.2002, debtors who default
and, because of their default, cannot use
checks or debt cards anymore, are inclosed in
"Archivio informatizzato degli assegni bancari e
postali e delle carte di pagamento" (see Rules
Banca d'Italia, 29.1.2002, and d.m. 7.11.2001,
n. 458, in attachment); banks, financial
istitutions, and other public organizations can
access to these data.#Furthermore debtors,
Centrale dei rischi is a part of the organization
of Banca d'Italia (the italian central bank),
therefore it is publicy organized. Other archives
above cited are organized by Banca d'Italia
("Archivio assegni"), and CCIA (see answer
19, about "bollettino protesti")
Banks have to submit to Centrale dei Rischi
every borrower over a fixed amount of money
(now € 75.000,00), every default (c.d.
"sofferenza", even if there are securities,
guarantees, or other collateral), and every
situation in which there are difficulties to pay
(c.d. "incaglio").#Other archives inclose only
default.
In the last years the importance of Centrale dei
rischi is grown on the market: therefore there
are many precedents about abuse of signalling
by banks; Rules about Centrale dei Rischi
("Istruzioni", in attachment) impose on banks
to investigate about the correct use of this
power (to signal), and to ask immediately for
delete when they found out any improper use;
but debtors can make also an application to the
judge (for ex. they are not insolvent, and they
dispute with the lender).




Under art. 186 c.c., which contains rules about      The law does not provide for any express
married couple who have chosen the co-               condition for providing a guarantee unless the
ownership regime (therefore, every new               guarantor has attained the age of majority.
properties after the marriage will belong to both    The creditor relies primarily on the financial
husband and wife), creditors can sell (auction)      capacity of an individual in accepting them as
goods owned by couple only if loan is                guarantor.##
contracted on the behalf of family (or by both
husband and wife); under art. 189 c.c., goods
owned by marriage couple can be selled
(auction) to pay off loans contracted by one of
both husband and wife without the consent of
the other (and which exceed the limit of the
ordinary business), if the former cannot pay,
but creditors can retain only an half of
purchase; finally, under art. 190 c.c., creditors
can sell goods owned by one single (if
properties that belong to both husband and
wife aren't sufficient), but they can retain only
an half of the purchase.#Loan agreement are
void if any party is not 18 years old.#There's
no other limitation for children or
spouses.#Some precedents recognized a tacit
agreement according to which husband acts on
behalf of wife, for all acts of ordinary business;
therefore wife is personally bound by these
debts.##
See above                                         If the person is not accepted as guarantor, the
                                                  debtor may be refused the loan or the amount
                                                  of credit may be reduced.#




No, but Act (of Parliament) n. 54/1992 has       Civil law applies.
introduced the duty to inclose maximum
amount due in guarantee contracts (for ex:
guarantee is tying within € 25.000,00), and this
concerns each guarantor, not only family
members; under some precedents, guarantee
is not tying anymore if many time is elapsed,
and debtor's condition has radically changed
(for ex: debtor has finished carrying on his
business, and further he has begun a new
business).
yes; #Under Art. 1384 c.c., penalty clauses              no#Most loan agreements provide for an
which are "clearly excessive" can be reduced             increase over the standard rate of +/- 2% as
upon equity by judge (according to an opinion,           well as an indemnity of 10% to 15% of the
judge could do it ex officio, without a party's          amount of the reduction resulting from
application, in the course of a process). Similar        cancellation.##
rule is art. 1526, par. 2, c.c. (which concerns
selling when seller take ownership of the good
since buyer pay off); and 1469bis, par. 3, n. 6),
c.c., under which, in consumer's contracts, all
penalty clauses are void if the sum of money
that consumer has to pay is "clearly
excessive".#According to an opinion, default
interest rate (art. 1224 c.c.) would be also reduced
by judge, like penalty clause (art. 1384 c.c.); but it
seems to be opinion of the minority.#




#Under artt. 1193-1194 c.c., payments                    #Where a loan is cancelled, standard interest is
discharge debtor first relative to interests, and        replaced by the interest payable on arrears.
after principal; if debtor has many loans,               The charge on payments arises on the reduced
payment discharge first expired debt; if every           sum with a quarterly calculation of interest.
debt is expired, first loan with less guarantees;        Interest not paid on instalments is added to the
if every debt has same guarantees, first loan            principal and is due on the delayed payment by
less burdensome for the debtor; otherwise, the           operation of law without notice at the same
oldest, and finally every debt pro quota.#Under          rate of interest as the principal.##
art. 1283 c.c., anatocism is possibile only after
an application to the court, and interests must
be due during six months; Supreme court has
sentenced the voidness of all clauses in bank
current account contracts about anatocism
(that have gone in opposite direction, during
many years, and inclosed anatocism, only in the
behalf of bank, every three months), beacuse
there are no real customs in that way; further
under Rule Cicr 9.2.2000 (see in attachment)
these contracts have now to inclose anatocism
for both parties, client and bank.#Clauses
about anatocism are void even if they are
inclosed in bank loan contracts (Cass.,
20.2.2003, n. 2593, that's not even
published).#
Under artt. 1819-1820 c.c. (on the matter of              Te Law of 9 August 1993 provides that:#Any
loan), debtor's default relative to rate interest         clause authorising the lender to demand
or one sole instalment is sufficient to induce            immediate payment of instalments due or
early termination (therefore lender can make              which provides for an express avoidance clause
immediately an application for the repayment of           is prohibited and taken as not incorporated into
the principal).#Under art. 1186 c.c., early               the agreement unless it stipulates that#1)
termination (in the sense of immediate duty to            where the consumer is in default in respect of
repaid) is possibile in the case of debtor who            payments due by at least two payments or a
became insolvent (see above for further                   sum equivalent to 20% of the total amount to
explanations).#Under art. 1525 c.c. (selling              be repaid and this would not be given effect
with ownership of the seller since discharge),            until one month following postage of a letter
default relative to one sole instalment is not            containing notice of the payments due #2)
sufficient, but it's necessary that debtor default        where the consumer would dispose of the
1/8 of the entire price. This rule apply also to          goods prior to payment of the price or would
all consumer credit contracts in which there are          use them in a manner contrary to the
securities over selled goods: art. 125 T.U. banc.         provisions of the agreement, and the lender
(see in attachment); under this rule only                 had retained title to the goods.#
consumer can terminate the contract without
penalty (that's a mandatory rule); in this case,
price must be reduced upon equity.




#Under art. 1819 and 1186 c.c., creditor with      #The creditor may not cancel the loan except
written proofs of the contract and default just    where the borrower has failed to pay the
have to make an application to the court, who      outstanding amount one month after postage of
can order early payment, even without hearing a letter containing notice.##
the debtor (in Italy this is named "decreto
ingiuntivo": see art. 633 c.p.c.); but he can
make opposition).#Under art. 1820 c.c., lender has
to make an application to the court for obtain
dissolution of the contract (but contract can inclose a
clause, under which dissolution is automatic, if
creditor informs the debtor about his willing: art.
1456 c.c.; alternately creditor can order fast
payment by written to the debtor: if debtor don't
pays, there will be dissolution: art. 1454 c.c.;
otherwise, it's necessary that judge recognizes
default as "important" under art. 1455 c.c.).#
yes; #There are special laws about "agenti in       no#There is no specific legislation relating to
attività finanziaria", similar to agency, (see art. credit intermediaires. The provisions of the Law
1, par. 1 n), 3, d. lgs. 25.9.1999 n. 374, d.m.     of 9 August 1993 and company law apply.##
13.12.2001, n. 485, both in attachment), which
stipulate loans on behalf of subjects regulated
in art. 106 T.U. banc. (see in attachment),
without any independence about fees and other
terms.#Furthermore there are "mediatori
creditizi", similar to brokerage contract, under l.
7.3.1996, n. 108 (c.d. anti-usury Act), art. 16,
and d.p.r. 28 luglio 2000, n. 287 (both in
attachment), that make counselling in the field
of loans, and find lenders to people who's
looking for money.#All these operators have to
ask for registration in public registers.#In order
to fees and other terms, rules about
"transparency" (which concern first banks)
apply (artt. 115 ss. T.U. banc., see in
attachment).#




#See the preconditions of "Agenti in attività        #see reply to question 30.#
finanziarie" in art. 3 d. lgs. n. 374/1999 (and
art. 3 d.m. n. 485/2001); in order to "mediatori
creditizi", see art. 4 d.p.r. 287/2000; it is high
school, and honourableness under art. 109 T.U.
banc. for bank managers.#These operators
cannot carry on other business (only
instrumental).#In the case of breach of legal
duties, or if preconditions cease, registration
will be erased (art. 6 d.m. n. 485/2001 and
d.p.r. n. 287/2000).#
yes; #Breach of good faith (art. 1375 c.c.) for    see reply to question 30.#
both operators; duty to disclose to the parties
well-known relevant circumnstances, in order to
the safety of operation (art. 1759 c.c., which
apply to "mediatori creditizi"); if supplier of
goods or services defaults, and he has, by a
contract, to act solely with one lender (similar
to sole agency, but it's very rare), consumer
can sue against the lender, but only for the
amount of the loan (art. 125 par. 4 T.U.
banc.).#




no##                                               yes; #There is draft legislation n° 4781 on the
                                                   protection of consumers in relation to mail
                                                   order credit, repealing article 7 of the Law
                                                   amended on 25 August 1983 on the legal
                                                   protection of consumers, which has just been
                                                   voted in by Parliament on 13.03.03, but which
                                                   has not yet been published. A copy of the
                                                   approved legilsation is attached, but it has not
                                                   yet come into force.#There is also the Law of
                                                   14 August 2000 in relation to e-commerce
                                                   amending the Civil Code, the new civil
                                                   procedure code, the commercial code, the penal
                                                   code and transposing Directive 199/93 in
                                                   relation to a communications framework for
                                                   electronic signatures, the Directive relating to
                                                   certain legal aspects of services in the
                                                   information society, certain provisions of the
                                                   Directive 97/7/CEE concerning the distance
                                                   sales of goods and services other than financial
                                                   services.#These documents are attached.##
yes; #There are art. 1375 c.c. (good faith, on       no
this subject see above), and 1467 c.c., under
which there's a dissolution of the contract if the
unpaid debt becomes, after stipulation,
excessive, because of new, extraordinary and
unforeseeable circumstances; but according to
an opinion, this rule don't applies to loan;
finally, under art. 1448 c.c., contract made in
straitened circumstances is void.#




yes; #Under art. 2597 c.c., monopolist must        No, there is no provision of that type. Even in
accept all proposals, and provide his services to the context of the Law of 8 December 2000 on
people that's asking for; according to artt. 1564- overindebtedness, no such provision is
 1565 c.c., utility companies cannot refuse to     intended.##
supply his services suddenly if counterparty's
default is not severe (for ex: default in summer
holidays); but under art. 1460 c.c., in general,
creditor cannot refuse to pay in the case of
counterpary's default, if this would be a breach
of good faith; dissolution is possible only if
supplier notices that default is very severe, and
he cannot take on client anymore.#There are
public independent Authorities which control
utility companies (for ex: electrical or gas
utilities: see www.autorità.energia.it;
telecommunications: www.agcom.it; in
websites are inclosed rules and legislation).#
yes; #See art. 6 l. n. 431/1998 (in attachment): yes; #At the request of a party sentenced for
tenants can make an application to the court to      absconding, whether a tenant or a squatter, the
obtain delay of the eviction, if there are           Justice of the Peace may order that s/he be
particular circumstances (for ex: they are very      granted a stay of execution in relation to the
old, or ill, or family's members, and                decision in question.#This stay may not exceed
others).#Parliament often make specific Acts,        three months, but it may be extended twice, on
under which tenants can apply to the court to        each occasion for a period of not more than
delay eviction, in a limited period of time. Under   three months.#The stay will only be granted if,
the last act (l. 23.12.2000, n. 388, modified the    as a result of circumstances, the applicant
last time from l. 1.8.2002, n. 185: now the          appears to deserve that concession, unless it is
deadline is 30.6.2003), delay is automatic, if       completely incompatible with the personal
there are very old people, or severly                needs of the other party.#The request for a
handicapped persons, who live in the house, or       stay is made through a simple request filed with
if tenant hasn't sufficient income (to find          the clerk to the Justice de la Paix (Justice of the
another house); landlord have to apply to the        Peace), who will summon the parties for the
court if he doesn't agree. However there are         first hearing.#The decision on the request is
very strong discussions about these Parliament       simply noted by the court note-taker. #There is
conducts, and according to many opinions, this       no appeal against the decision.#When the time
is an abuse of the Parliament power: indeed it       for moving out granted to the occupier is more
could be very difficult for many landlords to        than two weeks, the request must be lodged at
obtain the restitution of the real estate during a   least three days before expiry of that period,
lot of time; anyway they can obtain                  and failure to do so results in loss of the right to
compensation from Gouvernement, under                make the application.#The application to
European Human Rights Treaty (art. 6).#              extend the stay must be made at least three
                                                     days before expiry of the stay, and failure to do
                                                     so results in loss of the right to make the
                                                     no#There is no such provision in Luxembourg
                                                     law.##
yes; #Yes, but only one fifth can be assigned;   yes; #The issue of attachment of earnings is
see d.p.r. 5.1.1950 n. 180 (in attachment).#     dealt with in the Civil Procedure Code and
                                                 through various specialist enactments (Law of
                                                 11 November 1970 amended to provide for
                                                 assignment and attachment of earnings from
                                                 work as well as pensions and benefits and the
                                                 Grand-Ducal Regulation of 8 January 1973,
                                                 setting a rate for the ability to assign and to
                                                 attach earnings, pensions and benefits). The
                                                 attachment and seizure procedure is governed
                                                 by the provisions of the Law of 11 November
                                                 1970 and the Grand-Ducal Regulation of 26
                                                 June 2002.#The payroll of civil servants, the
                                                 salaries of employees are targeted by these
                                                 provisions or, more precisely, people working
                                                 for one or more employers in whatever
                                                 capacity, those in receipt of unemployment
                                                 benefit, pensions and social security benefits,
                                                 whatever the amount and the nature of the
                                                 income are targeted by the provisions above.
                                                 The principal and ancillary sums related to this
                                                 income are targeted, with the exception of
                                                 sums allotted by way of repayment of set
                                                 fees.#Draft legislation dated 16.05.2002, no.
                                                 4955 amending the amended Law of 11
                                                 November 1970 on assignments and
no                                                                                     and June
                                                 attachments of earnings, pensions of 26benefits
                                                 yes; #The Grand-Ducal Regulation
                                                 2002 sets the levels of income from earnings,
                                                 pensions and benefits that can be assigned or
                                                 transferred as follows:#The first tranche: up to
                                                 550 euros a month#The second tranche: 550 to
                                                 850 euros a month#The third tranche: 850 to
                                                 1050 euros a month#The fourth tranche: 1050
                                                 to 1750 euros a month#The fifth tranche:
                                                 above 1750 euros a month.##
yes; #There are rules about "agenzie di              no#Debt recovery companies are not regulated
recupero crediti": see art. 1, par. 1, a), d. lgs.   by specific legislation but fall within company
n. 374/1999 (in attachment); these are               law provisions.#However, as two thirds of our
operators which collect debt on behalf of            clients have taken out one or more loans in
creditors (others are factors, who buy credits,      Belgium, and Belgian debt recovery
under l. n. 52/1991); they have to ask for           organisations are frequently involved with
administrative licence, under art. 115 r.d.          customers in Luxembourg.#
18.6.1931, n. 773 (c.d. T.u.l.p.s., that's a
legislation about public safety, and no real
control is made); there's no specific and
complete regulation: "agenzie di recupero
crediti" only have to notice all "suspect"
operations they made (in order to the risk these
are outcome or results of illegal
business).#There's a private association
(www.unirec.it) that adopted an ethic code.#




#No, but fees of debt collecting operators have      #No, fees for recovery are not set by law unless
to be disclosed to the public.#                      they are fees of the huissier de justice (sheriff),
                                                     which are set by the Grand-Ducal regulation of
                                                     14 May 2001.# #
#No, but these operators cannot employ force,   #The Law of 11 November 1970 applies.##
or otherwise coinstrain debtors to pay.#




#Yes: only one fifth of wages; see d.p.r.       #Only earnings from work can be attached or
180/1950 (in attachment).#                      assigned, the guaranteed minimum income,
                                                family allowances, parental leave allowance,
                                                maternity pay and eduactional grants cannot be
                                                attached.#
See art. 619 c.p.c. (civil procedure code):      No, there are no exceptions for private
creditor can execute only in the "debtor's       households.
house", so the place when he lives, even for a
little time. If creditor try to sell (auction) a
property not owned by the debtor, but by
another member of the family, the last can
make opposition, but he has to demonstrate his
ownership by written evidences; furthermore,
ownership has to be prior to the debt, and
judges are very rigorous on this matter.




#No.#                                             #Draft legislation no 4955 of 16.05.2002,
                                                 amending the Law of 11 November 1970 on
                                                 assignments and attachments of earnings,
                                                 pensions and benefits was lodged with the
                                                 Chambre des Députés (copy attached). #This
                                                 draft legislation provides for an extension of the
                                                 basis for calculation of assignments and
                                                 attachments while amending the proportions
                                                 which can be assigned or attached with a view
                                                 to reducing them.#
no                                                   yes#What is the legislation in your country that
                                                     applies to consumer bankruptcy? Please give the
                                                     name of the law:#Law of 8 December
                                                     2000#a)concerning the prevention of
                                                     overindebtedness and introducing a procedure
                                                     for the collective settlement of debts in cases of
                                                     overindebtedness;#b) amending Book 1,
                                                     Chapter 1, Article 4 of the New Civil Procedure
                                                     Code# #Effective date of this law: 08.12.2000,
                                                     but given the lack of Grand-Ducal Regulations
                                                     in relation to enforcement, the first formal
                                                     application to engage in the procedure was not
                                                     signed until the end of 2001.##




yes; #A Reform Committee of Bankruptcy Law           no##
is working at the moment, and perhaps there
will be in the future a new regulation about
consumer insolvency; but committee works are
secret in this time, and nobody can know the
results.#Please give the name of the draft etc.: #
It doesn't exists                                  The procedure for the collective settlement of
                                                   debts is open to any private individual who is
                                                   not a business, who has a residence permit for
                                                   the territory of the Grand Duchy of
                                                   Luxembourg, who is experiencing long-term
                                                   financial difficulties, in order to address all of
                                                   his/her non-business debts which have fallen
                                                   due for payment.#




Please explain the philosophy of your bankruptcy   Please explain the philosophy of your bankruptcy
legislation more detailed:#Now discharge doesn't   legislation more detailed:#Luxembourg law does
apply neither to entrepreneur bankrupcty           not envisage a "fresh start". The law provides
(except for "concordato preventivo", that is a     that a procedure be instituted for the collective
minor procedure, under which debtor sells all      settlement of debts intended to restore the
his goods to creditors, if their value is 40% of   financial position of the debtor by enabling
the amount of unpaid debt); perhaps the            him/her to pay his/her debts and guaranteeing
seeabove Reform will introduce discharge in        to him/her, as well as his/her household, that
bankruptcy procedures, even in consumer's          they can live a life in accordance with standards
insolvency (if this will be the willingness of     of human dignity.#The procedure for the
Committee).#                                       collective settlement of debts consists of:#- the
                                                   preliminary statement phase and preparation
                                                   phase for a draft conventional settlement of
                                                   debts established by the Information and
                                                   Advice Service on Overindebtedness;#- the
                                                   conventional settlement of debts phase before
                                                   the Mediation Commission; #- the judicial
                                                   settlement phase before the Justice de Paix. ##
no#Italian law incloses mandatory pre- court        yes; please describe this procedure more detailed:
procedure only in the case of dispute between       #1. At the Service level : #a. constitution and
an employee and his employer.#                      administrative examination of the case,
                                                    checking the conditions are met for
                                                    admissibility;#b. signature of the request for
                                                    elimination of debts by the debtor, notification
                                                    to the parties concerned that the request has
                                                    been made and suspension of enforcement
                                                    procedures, preparation of a rescheduling plan,
                                                    attempt to achieve agreement on the part of
                                                    the creditors and the debtor on the proposed
                                                    plan, submission of the file and the plan to the
                                                    commission. This phase must be completed
                                                    within three months following formal signature
                                                    of the request by the overindebted person.#2.
                                                    At the level of the Mediation Commission:
                                                    Submission of a plan for conventional
                                                    settlement to the interested parties and a
                                                    statement of its success or failure. This phase
                                                    may not extend beyond the three month time
                                                    limit. The conventional settlement phase thus
                                                    ends at the most six months after formal
                                                    signature by the debtor.#

yes; please describe the voluntary procedure more   no##
detailed:#Under art. 3, par. 2, l. 30.7.1998 n.
281 (as modified by d. lgs. 23.4.2001, n. 224:
see both acts in attachment), before applying
to the court for protection of consumer's
interests, consumer's associations can make an
application to competent "Camera di
commercio, industria, artigianato e agricoltura"
(CCIA): that's a conciliation procedure (see
regulation in art. 2, par. 4, a), l. n. 580/1993,
in attachment)#Yet, art. 6, co. 1, d.m.
30.12.2002 (in attachment) has recently
introduced a volontary pre-court procedure to
try to settle any question about lease contracts#




Next answers only refer to voluntary                The client must make a formal request to the
procedure:#CCIA (Camera di Commercio                Information and Advice Service on
Industria ed artigianato) which is an               Overindebtedness for admission to the
independent public organization (see l.             procedure for collective settlement of debts.
29.12.1993, n. 580).#                               The proposed discharge of liabilities is
                                                    submitted to the Mediation Commission for
                                                    supervision.#
Parties bear legal costs; State bear any other   The procedure is free of charge.
costs (except tax costs).




There are no public data available; but it seems 58.1% or 18 cases led to signature of a
that pratice is very small; according to it, italian conventional recovery plan in 2002.#
country is far from carry out UE exhortations
[Com (1998) 198, (2001) 161].#




Maximum duration is 60 days (under art. 3 par.   The law only sets a maximum time limit of six
2, l. n. 281/1998), but everyone can sue even    months.#
though procedure is not terminated.#
Please explain in detail and give examples:#It's   Please explain in detail and give examples:##
impossible to answer, because of the small
practice and official data availability.#




It doesn't exists.#                                At the judicial level: lodgment of a petition at
                                                   the Justice de Paix, hearing before the Justice
                                                   de Paix in two weeks, delivery of a judgment
                                                   requiring the Service to set up a plan following
                                                   the directions of the Tribunal de Paix and
                                                   following deposit of a plan drafted by the
                                                   Service, delivery of a judgment imposing the
                                                   plan or delivery of a judgment confirming the
                                                   impossibility of achieving elimination of the
                                                   debts. #
See above#    The main difference between the two
              procedures is that the Juge de Paix may impose
              a judicial rehabilitation plan even where there is
              disagreement by one or more creditors,
              whereas any refusal of a voluntary plan entails
              the failure of the conventional settlement
              phase.#




See above     In practice, the Ligue Luxembourgeoise de
              Prévention et d'Action Médico-Sociales (the
              Luxembourg Ligue for Prevention and Medical
              and Social Action), offers a wide range of
              medical and social services, including the
              Service d'Accompagnement Social (Social
              Support service), which aims to secure long
              term support for people who encounter social
              problems of all kinds. The Service is ideally
              placed to take on the management of the social
              and financial situation of people who have had
              recourse to the Overindebtedness Law. Both
              the Mediation Commission and the Juges de
              Paix have hitherto relied on the Service
              d'Accompagnement Social for social follow-up of
              overindebted people.#




#See above#   #A Fonds d'Assainissement (Rehabilitation
              Fund) in relation to overindebtedness has been
              set up within the framework of the
              Overindebtedness Law, with the object of
              granting loans for the consolidation of debts
              within a conventional settlement or a judicial
              debt rehabilitation procedure. ##
no          no




See above   Lodgment of the debtor's formal application
            with the Service d‟Information et de Conseil en
            Matière de Surendettement automatically
            suspends any existing enforcement procedures
            in relation to personal property or real estate
            except for enforcement procedures against a
            debtor which relate to maintenance
            arrears.#This suspension applies until expiry of
            the time limit provided for in article 6 of the
            Overindebtedness Law.#A creditor seeking an
            attachment will therefore not recover the
            attachable element during the phase
            suspending proceedings.#
See above   The collective debt settlement procedure is
            available to any natural person with a residence
            permit for the Grand Duchy of Luxembourg
            facing long-term financial difficulties in relation
            to all his/her non-business debts, which have
            fallen due for payment.#Debtors who are in
            business within the meaning of Article 1 of the
            Code de Commerce are excluded.#However,
            the procedure is available to such a person if
            s/he has ceased his/her business activity at
            least six months previously or, if s/he is
            insolvent, if the business has been wound-up.
            #A debtor who became deliberately insolvent
            may also be ineligible.#




See above   As all enforcement proceedings have been
            suspended, possession proceedings in relation
            to the debtor's home cannot be executed.#
See above   Where a conventional or judicial plan has failed,
            creditors will recover their individual rights to
            pursue their claims.#




See above   Only maintenance pensions are protected by
            the Overindebtedness Law.#




See above   In principle, tax debts assimilated into the
            procedure have priority.#l
See above                                      Attachable and assignable elements are set by
                                               the Grand-Ducal Regulation of 26.06.02. (cf.
                                               annexed table )




See above                                      Article 728 of the Nouveau Code de Procédure
                                               Civile (New Civil Procedure Code) lists goods
                                               which cannot be seised (copy attached).#




Minimum duration: #See above#Maximum           Minimum duration: #The law does not set a
duration: #See above#Exceptions: #See above#   minimum time period.##Maximum duration:
                                               #The plan cannot exceed a period of 7
                                               years.#Exceptions: #The law does not provide
                                               for any exceptions.#
See above#   The procedure is free of charge.#




See above#   #




See above    As the Overindebtedness Law is relatively new,
             and as the number of cases dealt with in the
             judicial phase is not high, there have still been
             no major problems. #
yes; #See above: only "mediatori creditizi" (art.   yes; #Within the framework of the
16 l. n. 108/1996 in attachment) can make           Overindebtedness Law of 8 December 2000,
counselling about debt; pay attention to the        the Service d'Information et de Conseil en
difference between "mediatori creditizi" and        Matière de Surendettement was set up and its
"agenti in attività finanziaria": the former        missions were defined by the Law. The formal
advices about debt but he's not independent,        application to engage in the collective debt
and he acts not on behalf of consumer, because      settlement procedure can only be filed with the
he steady have to bring on lender's business;       Service d'Information et de Conseil en Matière
others ("mediatori", similar to brokers) whereas    de Surendettement.#
make counselling as a complete service, only to
make consumer able to choose best lender
(relative to his situation and needs).#As public
organizations, political responsibility of
consumers consciousness about lending is in
Ministero delle Attività Produttive (before
Ministero dell'Industria: see above the
website); but there are no specific public
organization in this field.#




"Mediatori creditizi", corporation or natural       The collective debt settlement procedure is
persons, are private operators, that are looking    available to any private individual who is not in
for their profits; they cannot carry on other       business within the meaning of Article 1 of the
business, except for professions (as lawyer,        Code de Commerce.#However, the procedure is
doctor, but in many professional organizations      available to person who is in business as
is forbidden to carry on business).#For access      defined if s/he has ceased his/her business
preconditions see above.                            activity at least six months previously or, if s/he
                                                    is insolvent, if the business has been wound-up.
                                                    #
No.#                                                 The Service d'Information et de Conseil en
                                                     Matière de Surendettement is the only body
                                                     authorised to intervene within the framework of
                                                     the Overindebtedness Law of 8 December
                                                     2000. #




See "mediatori creditizi" one more time; you         The only two bodies authorised to intervene
can find many useful information in UIC website      within the framework of the Law of 8 December
(UIC is "Ufficio Italiano Cambi", and that's a       2000 are: #1. The Service d'Information et de
public independent organization which controls       Conseil en Matière de Surendettement
registrations of mediatori creditizi): www.uic.it#   administered by the Ligue Luxembourgeoise de
                                                     Prévention et d'Action Médico-Sociales#2.
                                                     Service d'Information et de Conseil en Matière
                                                     de Surendettement administered by Inter-
                                                     Actions#
"Mediatori creditizi" (but there are no official    The two services primarily provide, as their
datas available) make advice about what kind        names suggest, information and advice in
of loan is in the best interest of consumer; they   relation to overindebtedness. They advise their
offer to consumer different loan proposals, and     clients with regard to a voluntary settlement of
notice the best, about debtor's needs.#Only         difficult financial situations and may receive a
lawyers, and consumer's organizations (often        formal application to enter the collective debt
by recommended lawyers) give assistance             settlement procedure.#
about disputes between professional lenders
and consumer debtors; see these websites:
www.adiconsum.it; www.codacons.it;
www.adusbef.it; www.adoc.org; www.aduc.it.




One regulation is "gratuito patrocinio": see        Debtors may benefit from the provisions of the
d.p.r. 30.5.2002, n. 115, artt. 74 ss; citizens     Law of 18 August 1995 with regard to judicial
can make an application to the court, and State     assistance for the defence of their interests.#
bears every cost, if they demonstrate they are
very poor, and cannot pay lawyer; and
furthermore if his claims are not clearly
groundless.#Some private consumer
organizations provide free legal aid to
members.#
#No, but Ministero della Salute (before                  #Overindebtedness services and social workers
Ministero della sanità: see                              employed by the Service d'Accompagnement
www.ministerosalute.it) and Ministero delle              Social (Social Support service) do their best to
Attività produttive (www.minindustria.it) have           educate their clients about managing their
political responsibility in these fields.#               budget.#




1.) Which institutions in your country are entitled to   1. In Luxemburg vergeben hauptsächlich die Banken
grant consumer                                           Konsumentenkredite. Der in Luxemburg ansässige
credit?                                                  Schuldner hat aber sehr oft einen oder mehrere
Please enumerate the institutions, e.g.                  Kredite im Ausland ( Belgien ) aufgenommen, dies
*     banks                                              vor allem bei Finanzinstitutionen oder Vermittlern.
*     insurance companies                                Immer öfter wird auch das Auto über Renault-Credit,
*     finance companies                                  Fiat-Credit, Opel-Credit etc. finanziert. Dies sind
*     non for profit organisations (name?)               dann meistens belgische Kreditverträge.
*     state agencies
*     credit unions                                      2. In Luxemburg ist die "Kommission zur
*     money lenders                                      Überwachung des Finanzsektors zuständig" ( CSSF )
*     credit card companies                              :
                                                         Commission de Surveillance du Secteur Financier
See art. 121 D. lgs. n. 385/1993 I've sent in            110, route d'Arlon
attachment anymore.                                      L-2991 LUXEMBOURG
Banks (see artt. 1, lett. f, n. 2, and 10, d. lgs. n.
385/1993), finance companies (artt. 106-107 d. lgs.      www.cssf.lu
n. 385/1993), and credit card companies (art. 107)
provide loans to consumer; also professional sellers
(of goods or services), but only delaying payments
(not loans, or other kind of lending).


2.) Who is in charge of supervision of the afore
mentioned lenders?

Banks are controlled by Bank of Italy (our central
bank: www.bancaditalia.it); also credit card
companies, and big finance companies (art. 107 D.
lgs. n. 385/1993); other finance companies are
controlled by Ufficio Italiano Cambi (UIC, see art.
106 d. lgs. n. 385/1993, www.uic.it).
                   Netherlands                                            Portugal

Wet op het consumentenkrediet,                     We enclose the Portuguese legislation on these
Staatsblad1997,63; Staatsblad 1997, 510;           issues. It is available only in Portuguese.
Staatsblad 1997,660; Staatsblad 1997, 776;
Staatsblad 1997, 791; Staatsblad 1998, 446;
Staatsblad 1999, 30; Staatsblad 2000, 553;
Staatsblad 2001, 180; Staatsblad 2001, 481;
Staatsblad 2001, 669#Wijzigingswet Wet op
het consumentenkrediet#Wet schuldsanering
natuurlijke personen, Fallissementswet
[Bankruptcy Act] artt.284-362. #Dutch
Bankruptcy Act consists of three titles:
faillissementen [bankruptcy], surcéance van
betaling [suspension of payment],
schuldsanering [sanitation of debt. This act is to
be amended. #Besluit aanwijzing diensten Wet
op het consumentenkrediet#Besluit herindeling
ministeriële taak met betrekking tot het
consumentenkrediet #Besluit van 27 juni
1984, houdende herindeling van de ministeriële
taak met betrekking tot het
consumentenkrediet#Besluit
kredietaanbiedingen, Staatsblad 2002, 122
#Besluit kredietvergoeding, Staatsblad 1991,
549; Staatsblad 1997,20; Staatsblad 1999,27;
Staatsblad 2000,156#Besluit
vergunningaanvraag Wet op het
consumentenkrediet, Staatsblad 2001,
415#Overdrachtsbesluit inzake de zorg voor
    #http://. #wetten.sdu.nl/cgi-                  In Portugal, you have to pay to access the site of
bin/login/anonymous/#                              official legislation - called Diário da República. It
                                                   is only available in Portuguese. The address
                                                   is:#http:// www.dr.incm.pt#
see attachement question 2.#                                 We are enclosing a list of the relevant literature.




yes# # Please provide a copy or indicate yes#For the above mentioned fields there are the studies we
where the material is available:#Jungman, N., conducted at the Observatory on Consumer
Niemeijer, E., ter Voert,M.J., Van schuld naar schone lei-   Overindebtedness.#In 2000 we published the book
Evaluatie Wet Schuldsanering natuurlijke personen [From      "Consumer overindebtedness" a copy of which we are
debt to clean slate, Evaluation of the Dutch Consumer        sending. #Other more recent studies can be consulted on our
Bankruptcy Act, Wetenschappelijk Onderzoeks- en              website at the following address. #Please provide a
Documentatiecentrum,M Ministry of Justice, The Hague,        copy or indicate where the material is
2001#                                                        available:#http://www.oec.fe.uc.pt#
Ministry of Justice: legislation#Ministry of Social It is the Assistant Minister of the Prime Minister
affairs: for informal debt assisstance##            who is in charge of consumer issues. The
                                                    Consumer Institute (Instituto do Consumidor) is
                                                    the government agency responsible for the
                                                    application of consumer protection policy.




no                                                 yes; #Law n. 24/96, of 31-7-1996 is the
                                                   Consumer Protection Law.#
no                                     no




yes; #Wet op het Consumentenkrediet#   yes; #Consumer credit is regulated by Decree-
                                       Law n. 359/91, of 21-9-1991. Mortgage credit
                                       is regulated by Decree-Law n. 349/98, of 11-11-
                                       1998 (modified by Decree-Laws n. 137-B/99, of
                                       22-4-1999, 1-A/2000, of 22-1-2000 and
                                       320/2000, of 15-12-2000).#
yes; #Article 35 Wet op het consumentenkrediet and   no#In our Civil Code there is a norm on legal
Besluit Kredietvergoeding regulate this matter.      interest rate (art. 559º). There are also two
                                                     norms on usury (art. 1146) and usurary rates
                                                     (art. 559-A), which identify as usury annual
                                                     interest rates exceeding legal rates by 3% or
                                                     5%, depending on whether or not the loan
                                                     contract involves security. These provisions are
                                                     virtually not applied in practice. #As regards
                                                     mortgage credit, art. 7 of Decree-Law n.
                                                     349/98, of 11-11-1998 (and its updates) lays
                                                     down that the contractual interest rate is
                                                     negotiated freely between the parties. #



                                                     3 - Mortgage credit has lower interest rates:
                                                     euribor+ 1/2,5%). Consumer
                                                     credit has higher interest rates. According to
                                                     the Bank of Portugal, the
                                                     average of the interest rate for consumers'
                                                     credit in December 2002 was:
                                                     mortgage credit 5,1%, consumer credit 9% (
                                                     total average 7,3%)



#                                                    #


Left: credit-sum in euro
Right: maximum allowed effective annual rate
(01-01-2000)
0 tot 2 500                   29,1#
2 500 tot 5 000                23,0#
5 000 tot 10 000              19,3#
10 000 tot 15 000              17,8#
15 000 tot 20 000              17,3#
20 000 tot 30 000               16,9#
30 000 t/m 50 000               16,5 #
there is none#                                  #




?#                                              #




The law (Besluit kredietvergoeding) deterimes   #
that the maximum interestes rates fluctuates
with the general interest rates. It is not a
political decision.#
#The amount paid above the maximum allowed            ##
rate can be reclaimed in accordance with the
Dutch civil code (3:309).#




#Besluit kredietaanbiedingen:##art. 4                 #Elements to be disclosed are: TAEG, the
requirements: #- statement on the effective           negotiated spread and possible expenses
annual rate#- revolving credits: costs per            charged by the credit institution for each
installment and credit limit#- non-revolving          instalment (administrative expenses) #
credits: credit sum#- if in a credit offer the
amount of the credit costs are mentioned, it is
obliged to state the effective annual rate too#-
when the effective annual rate is mentioned
there is the obligation to state the percentage
as the " real annual rate" [ wettelijke rente op
jaarbasis]#- if not all credit lenders are eligible
for the same effective annual rate, the creditor
is obligated tot state the minimum and
maximum percentage.##art.8: If in the
prospectus a revolving credit is being offered,
there has to be mentioned at least four
representative credit limits with the most
common repayment schedules: what facts are
important are in calculating the theoretical
duration of the credit repayment; the costs in
event of repayment arrears and finally, the
costs on the event of early repayment##art.9:
if a non-revolving credit is being offered, the
prospectus has to mention at least four
representatives credit sums with the most
common repayment schedules; at least one
example of a calculation that makes it clear
Article 26 WCK and Besluit kredietaanbiedingen.   Banks usually give debtors a loan repayment
These are: a prospectus or any other form of      scheme, with the agreed rate of interest
statement made by the creditor #                  (euribor+negotiated spread) covering the loan
                                                  period. It also contains servicing costs and the
                                                  TAEG. They may also make simulations of
                                                  repayment schemes based on increases in
                                                  interest rates, but this usually only happens on
                                                  the request of the customer.




#Yes, #                                           #No#
#Yes, articles 28 and 29 Wet op het                 No.#However, credit institutions are bound by
consumentenkrediet. #A creditor is not allowed      a duty of care in the exercise of their activity
to enter in a credit transaction of which the       (arts 74 and 76 of Decree-Law 298/92 of 31-12-
credit exceeds 1000 euro without having             1992 which authorises the General Regime of
sufficient written information about the            Credit Institutions and Finance Companies).
creditworthiness of the applicant.#The              This duty may be interpreted to mean that
creditworthiness must be seriously investigated     creditors are obliged to ask the debtor to
either by means of an information frorm with        provide the necessary items to allow an
relevant questions or otherwhise.                   assessment of their credit capacity. The
                                                    parameters for exercising this duty are defined
                                                    neither in the law nor in jurisprudence, so it is
                                                    up to each institution to set their own.#




#No, article 16 b WCK, the creditor may lose        #No.#
his licence when in violation of what is expected
of a " good creditor". This definition has been
futher developed by the Dutch organization of
finance companies [VFN].##
yes; #In 1965, a Credit Registration Bureau            yes; #There are two central credit reference
[BKR] was set up. #See also                            systems: Central de Riscos de Crédito of the
http://www.bkr.nl/home/1.html##                        Bank of Portugal and Credinformações.#




Privately organised #See also                          The Central de Riscos de Crédito is publicly
http://www.bkr.nl/home/1.html#It is a form of self-    organised by the Bank of Portugal, which is our
regulation by the industry that is stongly supported   Central Bank. Credinformações is privately
by the Government.#
                                                       organised.
Creditors associated with the BKR have two
obligations; first, before entering into a credit
transaction, to ask for information concerning actual
or past credit obligations of the applicant. Second,
the following facts after entering into transactions
like personal loans, revolving credits, hire purchase,
instalment credits, structural overdrafts on payment
accounts, student loans by banks and lease contracts
if the borrower is a natural person: name, address
and date of birth, information concerning the
extended credit, defaults in payments by the debtor.
Credit facilities which are connected with the use of
credit-cards are also registered with the BKR.#This
positive registration system is used with credits of
which the amounts are between 454 en de 113.445
euro. Negative registration is used for mortgages,
registration by creditors will only take place if there
is an arrear of more than four months.#



                                                          There is positive registration in the two systems.
                                                       No. The establishment of central credit
                                                       reference systems has to be authorised by the
                                                       Comissão Nacional de Protecção de Dados
                                                       (National Commission on Data Protection) (Law
                                                       n. 67/98, of 26-10-1988). As regards reciprocal
                                                       information systems organised by entities
                                                       within the framework of the General
                                                       Regulations of Credit Institutions and Financial
                                                       Companies, the establishment of central credit
                                                       reference systems is regulated by art. 83 of
                                                       Decree-Law n. 298/92, of 31-12-1992.#The
                                                       use of personal data for other purposes has to
                                                       be authorised by the National Commission on
                                                       Data Protection.#The owner of the data has the
                                                       right of access to his/her data.



#Spouses are liable for some household debts           Credit contracts are subject to the general
even without co-signing and sometimes even if          regulations on joint liability of spouses laid
they terminate a marriage settlement. All this is      down in the Civil Code (articles 1690-1697).
based upon the general law governing                   Debts incurred during marriage for the benefit
matrimonial property right, which is based on          of both spouses are considered joint debts.
the legal responsibility of spouses to support         Thus, both spouses are responsible for
each other [ Dutch Civil Code (BW)1:81 ] This          repayment.#
liability can be limited by judiciary verdict at the
request of one spouse [BW 1:86]. Permission of
both spouses is required for signing a
guarantee contact. Without this permission the
contract can be reversed [BW 1:89 jo 1:88]. #
#nullity of the contract see above#   A spouse can request the legal recognition that
                                      the debt is not a joint debt and the division of
                                      property so that his/her part of the marital
                                      property is not used to repay debt.




                                      No.
yes; #Art. 11 Besluit kredietvergoeding. The        no#See box 8.#
default rate is calculated on a daily basis. The
default costs may not exceed the height of the
agreed interest rate, charged in event of
regular payment.#




#Article 34 b WCK The costs in event of default     #Art. 560 of the Civil Code provides for
may be charged after serving notice upon the        compound interest (anatocism), and art. 561
debtor. There has to be given a certain time        provides for the autonomy of interest credit in
limit during which the debtor can meet his          relation to the principal; each of these can be
obligations. When the debtor, after the time        independently granted or terminated.#
limit has passed, still has not complied, default
costs may be charged.#
#See article 33 c WCK. Conditions are: backlog        Under the general terms of contractual liability,
of two months, debtor will leave or has left the      a creditor can terminate a credit contract early
Netherlands, death of debtor, bankruptcy,             due to the debtor's non-fulfilment of the
embezzlement of the financed object, inaccurate       contract. (art. 483 and art. 1150 of the Civil
information given by the debtor.#                     Code).

article 33 sub c regulates early termination by the
creditor: He may require
full payment, if:
- de debtor is two months in arrears, and after an
official notice of delay
- the debtor has left the country or is plamnning
to do so in the coming months;

- the debtor ihas died and the the estate is not
able to pay back what is due;
- the debotor is bankrupt
- the debtor has sold the securiy collateral
- the debtor has given false information when
asking for credit




#first a summons#                                     #Credit institutions take the following steps:#-
                                                      first delay in payment - letter to debtor
                                                      reminding him of outstanding payment;#-
                                                      second delay in payment - registered letter to
                                                      debtor (and garantors, if applicable) giving a
                                                      deadline for settlement of debt;#- third delay in
                                                      payment - a petition is send to court to seek
                                                      termination of contract, settlement of
                                                      outstanding payments and of all instalments,
                                                      interest and damages.#
The credit grantor is responsible for the   no
intermediairies that he uses#




#not applicable#                            #Não#
no, not applicable#                              no##




yes; #Doorlopend geldkrediet (art. 1f            no#The law regulating credit contracts states
WCK)#Doorlopend goederenkrediet (art. 1g         the type of information to be given to
WCK)#Uitstaand saldo bij geldkrediet (art. 1h    consumers when the contract is signed, and
WCK)#Uitstaand saldo bij goederenkrediet (art.   throughout the duration of the contract in the
1i WCK)#Kredietvergoeding (art. 1 j WCK)##       case of credit on current account and
                                                 overdrafts. (art. 13 and 14 do Decree-Law n.
                                                 359/91, of 21-9-91).#
no                                               no




yes; #no specific regulations for energy:        yes; #Law n. 23/96, of 26-7-1996, establishes
however, the algemene voorwaarden voor de        mechanisms to protect utility services users
levering van elektriciteit 2002 voor             (water, energy and gas supply, telephones). In
huishoudelijke verbruikers states in article 4   case of outstanding payment, art 5 forbids
that when the payment is not made in due tim,    utility companies to cut off supply without
the utility company may set a new payment        notifying the user at least 8 days in advance.
term. the consumer has the right to reach a      The company must also indicate ways for the
paymentsettlement.#Gas:#Water:#Telecommu         user to avoid having the supply cut off.#
nications: ## #
yes; #Article 18 Huurwet: eviction can be done   no
when the rent has not been paid.
                         #




yes; ###yes, discharge of tax debts (Leidraad     no#Sometimes, to reduce tax evasion, the
invordering 1990, Algemene wet inzake             State has granted an occasional discharge of
rijksbelastingen) and public fees for the poorest interest on taxes, as well as reducing or
people (locally arranged per city)#gratie#        forgiving related fines.#
yes; #Article 7:633 BW, Article 475d Rv.    yes; #As provided for in article 824/1, item a) of
##Employee has right to 90 % of the minimum Code of Civil Procedure, 1/3 of one's wages can
wages. ##                                   be assigned.#




yes; #looncessie, geen idee?#                  yes; #As provided for in article 824/3 of the
                                               Code of Civil Procedure, the judge can exempt
                                               debtors from assignment of wages (as well as
                                               1/3 of old-age pension or disability allowance,
                                               or other social benefits, insurance or
                                               indemnization for accidents), taking into
                                               account the nature of the debt and the needs of
                                               the debtor and his/her family.#
no                                                 no#We are not aware of any legal regulation for
                                                   debt collection by private entities (although
                                                   there are debt collection companies operating
                                                   on the Portuguese market)#




#buitengerechtelijke incasso: art. 6:96.2.c.       #No.See previous answer.#
BW.#The Netherlands Association for the
Judiciary created a maximum for collection cost.
Date of force: 1 april 2001, Report Voor-werk
II#Left: importance of case#Center: tarief
buitengerechtelijke kosten#Right: Incl.
VAT#t/m € 226,89        € 34,03 € 40,50#t/m €
453,78     € 68,07         € 81,00#t/m €
1.134,45     € 136,13 € 162,00#t/m € 2.268,90
   € 272,27 € 324,00#t/m € 3.403,45         €
408,40 € 486,10#t/m € 4.537,80         € 544,54
€ 648,00#t/m € 9.983,16         € 662,52 €
788,40#t/m € 19.512,55 € 780,50 €
928,80#t/m € 39.025,10 € 998,32 €
1.188,00#t/m € 97.562,75 € 1.542,85#
                         € 1.835,99#t/m €
195.125,49 € 2.450,41 #
        € 2.915,99#t/m € 390.250,99 €
3.448,73 #                                 €
4.103,99#t/m € 998.316,46 € 4.447,05 #
                           € 5.291,98#> €
998.316,46        € 5.536,12#
            € 6.587,98##
#no, self-regulation#                      #No.See previous answer.#




#Art. 475c, art. 475d:Up to 90% of the     #See box 38#
minimum wages of an employee's income is
exempted, but above this percentage
attachment is unrestricted. #
#Art. 447 Rv, exemptions are all goods for daily Families are covered by the regulations
maintenance, tools used by craftsman in their    established for execution for the payment of
personal business, any utility needed for        debts, laid down in the Code of Civil Procedure,
education or other purposes for arts and         mentioned in question 44 of the questionnaire,
science. #                                       relative to seizable and non-seizable property.




NO                                               #No#
yes#What is the legislation in your country that   yes#What is the legislation in your country that
applies to consumer bankruptcy? Please give        applies to consumer bankruptcy? Please give the
the name of the law:#Consumer bankruptcy           name of the law:#The Código dos Processos
Act#Effective date of this law: 1/12/1998#         Especiais de Recuperação da Empresa e de
                                                   Falência, of 1993 (revised in 1998) (Code of
                                                   Special Procedures for Company Recovery and
                                                   Bankruptcy 1993) provides for the application,
                                                   with the necessary adaptations, of the company
                                                   bankruptcy regulations to consumer
                                                   bankruptcy. (art. 27)#Effective date of this law:
                                                   Decree-Law n. 132/93, of 23-4-1993 (as
                                                   formulated in 1998, by Decree-Law n. 315/98,
                                                   of 20-10). #We are attaching the consolidated
                                                   version of 1998.#




no#                                                yes; #The Code of Special Procedures for
                                                   Company Recovery and Bankruptcy) of 1993 is
                                                   currently being revised. Recent news informed
                                                   that Government's project intends to creat the
                                                   possibility for insolvent debtor present to court
                                                   with the bankruptcy petition a payment plan
                                                   proposal to be aproved by 2/3 of creditors
                                                   identified by him. This proposal is going to be
                                                   discussed on Parlment. As soon as we have
                                                   more details we contact you.#Two new legal
                                                   proposals for the settlement of cases of family
                                                   overindebtedness have been submitted, but
                                                   they have not been discussed yet. The first
                                                   proposal was submitted in 1999 (1st version)
                                                   and 2000 (2nd version) by the public entity in
                                                   charge of consumer protection. This proposal
                                                   was prepared by the Comissão do Código do
                                                   Consumidor (Commission on Consumer Code)
                                                   and its basis is an essentially judicial mode. The
                                                   second proposal was submitted by the Ministry
                                                   of Justice in 2002. It was prepared by the
                                                   Permanent Observatory on Portuguese Justice
                                                   and is based on an extra-judicial model. #Please
                                                   give the name of the draft etc.: The title of the first
                                                   proposal is "Projecto sobre o Regime Jurídico
                                                   dos Procedimentos de Reestruturação do
The inability of the debtor to pay his debts or the   There are two terms - insolvency and
expectation that the debtor cannot go on paying his   bankruptcy - which apply to both companies
debts.#                                               and individuals.#Insolvency - impossibility on
                                                      the part of debtors to comply with their
                                                      obligations on time, due to lack of means and
                                                      lack of credit. (art. 3 and art. 8/1 sub-para.
                                                      a)).#Bankrupcy - this term is used to designate
                                                      the legal action through which a debtor is
                                                      formally declared bankrupt by the court. This
                                                      formal action depends on the acknowledgement
                                                      of a situation of insolvency.




Please explain the philosophy of your bankruptcy      Please explain the philosophy of your bankruptcy
legislation more detailed:#The aim is to offer a      legislation more detailed:#The Code of Special
fresh start to the over-indebted debtors who          Procedures for Company Recovery and
acted in good faith and to encourage more             Bankruptcy was devised to be applied to
voluntary debt settlements by making judicial         companies and only marginally to individuals.
debt adjustment financially less attractive to        The Act does not provide for the discharge of
creditors.#                                           debts after their liquidation. For this reason it is
                                                      difficult to apply it to cases of family
                                                      overindebtedness. "Fresh start" is not an
                                                      explicit aim of this law.#
yes; please describe this procedure more detailed:   no##
#Failure of a debt management agency to
negotiate a voluntary settlement is a condition
to ask the court to impose debt adjustment. #




no                                                   no##




Municipal banks, social services, private            #
organisation, attorney's.#
Municipal banks, social services, private
organisation, attorney's.#




These are the succes rates of the municipal   #
banks. In 2000: 7.024 and in 2001: 5.619.#




max of three - five years, no minimum#        #
Please explain in detail and give                          Please explain in detail and give examples:##
examples:#The mandatory pre-court
procedures ( the consumer bankruptcy act)
were designed to offer debtors a clean slate
and to increase the success rate of debt
agenies. These procedures should have made
the judicial route less appealing for creditors. It
did not. #The financial differences between the
voluntary and judicial process are too minimal
to interest creditors. Creditors favour the
judicial adjustment, which can be financially
more attractive to them; in order to punish
debtors for not paying the debt in full, have
more faith in the uniform implementation of
adjustments#In addition, various stakeholders
interpret the procedures differently and
evaluate how they can optimise their own
interests.#For municipal and debt management
agencies, the presssure to reach settlement
diminished.#Judges perform their role yet,
they also contribute to the failure of the very
process they were deemed to strengthen:
voluntary debt settlement.##



The petition is to be presented along with a               The debtor held to be insolvent (due to inability
certificate to the court. In this certificate the court    to fulfil their obligations on time, through lack
can find all information concerning the specific           of assets and credit) can apply to the court to
situation. Court will set a date for (non-public)
                                                           be declared bankrupt. The application should
hearing. Reasons for refusal for admittance to the
judicial debt adjustment (judge must refuse):              contain the name of the debtor, the system
petitioner can go on paying his debts, grouped fear        under which marital property is owned, the
that the petitioner wil try bring disadvantages to the     names of all creditors and the respective sums
creditors, it already applies to him (judge can            owed and details of any pending legal actions
refuse): in the ten years before the petition was          and executions against him.## Apart from the
presented, the WNSP or bankruptcy was already              debtor, creditors and the State Prosecution
applied, it is plausible that the petition did not enter
                                                           Department can also apply for a declaration of
into one or more debts in good will.#If a debtor is
admitted, the judge decides on the length of
                                                           bankruptcy.## The bankruptcy procedure is
payment period, the amount to be discharged and            considered an urgent one. The competent
goods accruing to the estate.#This amount is               court is that in the debtor‟s area of domicile.
calculated by the trustier and approved by the court.      ## Once the application is received, the judge
#                                                          issues a summons to the creditors or to the
                                                           debtor and the other creditors, depending on
                                                           whether the debtor or a creditor has launched
                                                           the action. These persons can oppose or justify
                                                           the sums owed, within a period of 10 days.##
                                                           At the end of this period, the judge studies all
                                                           the evidences. If he/she believes the
                                                           application is without foundation, the action is
                                                           archived; otherwise the action is allowed to
                                                           proceed.## If the action proceeds, and it is
                                                           unopposed, the judge immediately declares the
Judicial debt adjustments are published in the     #
Netherlands Government Gazette
(Staatscourant), the (local) dialy newspapers,
and in the National Debt Adjustment Registry
(Landelijk Register Schuldsaneringen) on the
Internet. Pre-court system less proactive in the
assets. Trustee active role in WNSP such as
managing the debtor's assests, checking that
are no excess assests and receives the debtor's
mail to verify that the debtor has no
undisclosed income. Trustee reports on the
debt adjustment plan twice a year to keep the
court informed. #




Tijdelijk Besluit Subsidie Bewindvoerder           The trustee is appointed by a judge, and is
Schuldsanering, Staatsblad 1998, nr 590 and        chosen from a list of trustees, which exists in
Besluit Subsidie Bewindvoerder Schuldsanering      each legal district. Duly qualified persons are
Staatsblad 2001, nr 80. They state criteria.#In    recruited for this list, normally with experience
addition to lawywer, can non-lawyers be            in the sphere of company management or other
registered as a trustee when they are when         appropriate professional experience (arts. 1 and
they are employees of a trustee organisation       2 of Decree-Law no. 254/93, dated 15-7-1993)
acknowledged by Raad voor Rechtsbijstand
(legal aid council).#




#yes, art. 343 and art. 358 Consumer               #No. The debtor has no right to any debt
Bankruptcy Act provides that all debt at the end   discharge at the end of the process. He is only
of the term (maximum of 3 or 5 years) can no       freed from the effects arising from the
longer be claimed. #                               declaration of bankruptcy once all creditors are
                                                   paid, or five years after condition of res judicata
                                                   is established over the consideration of the
                                                   trustee‟s final accounts (art. 238/1 of the Code
                                                   of Special Procedures for Company Recovery
                                                   and Bankruptcy).#
no                                              no




#Articla 299. The procedure does not stop the   A court declaration of bankruptcy prevents the
enforcement activities of pawn rights,          initiation or pursual of any execution order
mortgage.#                                      against the bankrupt (art. 154/3 of the Code of
                                                Special Procedures for Company Recovery and
                                                Bankruptcy).
#The application for debt adjustment is issued    The only requirement is that the debtor should
by municipality and used by the court to          be unable to pay their debts though lack of
determine whether reasonable grounds exist to     assets or credit. This determines their situation
assume that the debtor will not attempt to        of insolvency, which must be recognised by the
evade obligations arising out of the scheme and   court so that bankruptcy proceedings can be
whether he acted in good faith.#                  started.




The no special protections for rented or owned    There is no protection for the family home. An
home in case of peronsal bankruptcy. See on       owned property can be executed for debt
relevant provisions regarding end of rent         payment (mortgage debts or others). Eviction
contract article 39 Faillissementswet. #          is also possible (except in the case of the very
                                                  elderly who, even in the event of non-payment
                                                  of rent, cannot be evicted while they remain in
                                                  residence there). However, the declaration of
                                                  bankruptcy does not determine the termination
                                                  of a contract to rent, when the bankrupt is the
                                                  tenant, unless this is required by the trustee
                                                  (art. 169 of the Code of Special Procedures for
                                                  Company Recovery and Bankruptcy).
                                                 Secured creditors keep this security during the
                                                 bankruptcy proceedings and are paid
                                                 preferentially. Any part not paid by the sale of
                                                 assets encumbered with security is included
                                                 with the ordinary credits, who are subject to
                                                 pro rata payment (art. 209 of the Code of
                                                 Special Procedures for Company Recovery and
                                                 Bankruptcy).#On the other hand, the creditor
                                                 privileges of the State, local authorities and
                                                 social security institutions are extinguished on
                                                 the declaration of bankruptcy, and sums owed
                                                 to them are treated as ordinary debts (art. 152
                                                 of the Code of Special Procedures for Company
                                                 Recovery and Bankruptcy). Debts already
                                                 constituted during the bankruptcy proceedings
                                                 are excluded from this rule.


Art. 299a Consumer Bankruptcy Act. Study         There is no discharge for any kind of debt.
loans are excluded from coverage.#




art. 3:288.1.a BW : bankruptcy costs [costs       Secured debts.
linked with the bankruptcy like the salary of the
trustee and costs of evaluation] #art. 3:284.1 :
costs for necessary living expenses#art. 21.1
Invorderingswet : tax claims#
Art. 295 Consumer Bankruptcy Act, Art. 475d       When the bankrupt has no means of
Wetboek van Rechtsvordering. #90 % of social      subsistence, and is unable to provide them
assistance minimum.#                              through employment, the trustee may allocate
                                                  a subsistence allowance which is paid at the
                                                  expense of the revenue of the bankrupt‟s
                                                  assets. The agreement of the creditors‟
                                                  committee is required for this (art. 150/1 of the
                                                  Code of Special Procedures for Company
                                                  Recovery and Bankruptcy).




Art. 447 Wetboek van Rechtsvordering,             Items the seizure of which would offend good
exemptions are all goods for daily maintenance,   practice or lack economic justification, due to
tools used by craftsman in their personal         their low cash value; goods necessary for any
business, any utility needed for education or     household economy that may be in the home of
other purposes for arts and science. #            the debtor, unless the payment of the purchase
                                                  price or repair of such goods is at issue; articles
                                                  essential to disabled persons and those used to
                                                  treat sick persons; tools required for work and
                                                  articles essential for the exercise of a
                                                  profession, unless the debtor has designated
                                                  them for attachment, or the payment of their
                                                  purchase price or repair is at issue (articles 822
                                                  and 823 of the Code of Civil Procedure).



Minimum duration: #     #Maximum duration: #3 - Minimum duration: ##Maximum duration:
5 years#Exceptions: #    #                      ##Exceptions: ##
art. 71 Consumer banruptcy Act. The fees are set at      The judge fixes the fee of the trustee (art. 5/1
the end of bankruptcy. They are determined by the        of Decree-Law no. 254/93, dated 15-7-1993).#
judiciary based upon richtlijnen in faillissementen en
surseances van betaling. #




Article 320 Consumer bankruptcy Act. The fees            Fees are paid by the Cofre Geral dos Tribunais
are (01/06/2002-01/06/2003) for a singel case            (Courts General Treasury), which has to be
€ 30,94 (inclu VAT) and double case € 36,89              reimbursed by the bankrupt's assets (art. 5/1/2
per month. The court may set a lower or higher           of Decree-Law n. 254/93, of 15-7-1993).#
fee. #




                                                         Lengthiness of court procedures is one of the
                                                         main problems in the Portuguese judicial
                                                         system.
yes; #Consumer Bankrupcty Act, Wet                   no##
schuldsanering natuurlijke personen.##




It regulates the subject where a debtor seeks
assistane for over-indebtedness with a debt
mangement agency for voluntary debt settlement.
#Debt management is a local responsibility,
municipalities are fee to organise it any way they
wish. #Even though no law regulates debt
management, most agencies adhere to a code of
practice developed by the Dutch Association of
Municipal Banks (NVVK). #
no                                          The law does not make any reference to debt
                                            advice.#




Municipal banks, social services, private   The consumer protection association DECO (the
organisation, attorney's.#                  largest and most important in Portugal) and
                                            some Municipal Information Centres for
                                            Consumers (Centros Autárquicos de Informação
                                            ao Consumidor - CIAC) provide advice to
                                            consumers. However, their action is sparse and
                                            poorly structured, especially in the case of the
                                            Municipal Information Centres, whose
                                            employees are not usually trained to deal with
                                            this type of issues. #
They assist in bugetary control (oblige monthly   DECO provides advice on family budgeting and
payments, cut back unnecessary                    sometimes acts as mediator between financial
expenses)#Require debtors to seek counseling      institutions and consumers who are
for concominent problems such as addiction, or    overindebted or facing temporary financial
take a course in family financial                 difficulties who contact DECO headquarters in
management.#In some instances require             Lisbon or any of the seven regional branches.
debtors to deposit their income in an agency
account. The agency then pays the rent, the
utilities, etc. and provide the debtor with an
allowance each week to cover food and
personel necessities.##




NO                                                Yes. #Law n. 30-E/2000 of 20-12-2000
                                                  establishes the framework for legal aid for all
                                                  those whose financial means are insufficient to
                                                  meet court expenses. Legal aid is provided in
                                                  all courts regardless of the applicant's
                                                  procedural status. Legal aid allows for total or
                                                  partial exemption from court fees and for the
                                                  appointment of a lawyer and payment of the
                                                  lawyer's fees.#
no#                                                   #No#




In the Netherlands the dominant credit                1 - The consumers' credit in Portugal is provided by
granmtors are the banks and insurance                 the banks and
companies, and their subsidiaries (finance            specialized financial institutions. This specializes
                                                      credit institutions
companies, money lenders);
                                                      can only provide credit for consumption, not
- the WCK (Consumer credit act) covers all            mortgage credit and they
professional creditors: also                          provide it through "credit intermediaries" , i. e. car
traders like car sellers sell on credit (but need a   sellers and
license)                                              furniture sellers , v.g. They don't provide credit
- not for profit organisations: only if they do not   directly to consumers.
adertise with credit and if                             2- The supervision is provide by the Bank of
                                                      Portugal, which is the
they charge less than the annual rate ((6 %)
                                                      central bank.
- state agencies: Communal banks                      .
(gemenntelijke kredietbanken)
- we don't have credit unions here
- the big credit card comapnies, but also shop
card companies (Comford Card,
Prime line)

2. The supervisoin is now with DNB (De
Nederlandsche Bank), our National
Supversoror of banks but will be transfered
shortly to AFM (Autoriteit
Financiele Markten)
                       Spain                                           Sweden

Refer to attached zip file                       Laws that are in force in this field are:#1.
                                                 Consumer Credit Act (1992:830) #2. Decree on
                                                 Interest Rates in Consumer Credit
                                                 (1992:1010)#3. Debt Collection Act
                                                 (1974:182)#4. Decree on Debt Collection
                                                 (1981:956)#5. Act on the Compensation of
                                                 Debt Collection Costs (1981:739)#6. Credit
                                                 Information Act (1973:1173)#7. Adjustment of
                                                 Debts Act (1994:334)#8. Decree of the
                                                 Adjustment of Debts (1994:347)#9. Debt
                                                 Enforcement Act #




Documents to be sent by electronic mail and in   www.riksdagen.se#http:// Click "Rixlex", full text
Spanish#http:// #                                of the statutes. Of the above statutes, the Enlish
                                                 translation of the Enforcement Act
                                                 (utsökningsbalken) can be found in Ds 2002:45.
                                                 See also www.fritzes.se. #
There are very few legal articles regarding                 The relevant literature in this field is:
overindebtedness; and as opposed to the legal               #1.Household debts SOU 1988:55)#2.
aspects, it is the economic aspect that is                  Adjustment of Debts Act (SOU 1990:74)#3
emphasised. Besides, they do not exist as                   Business Reconstruction Act (SOU
separate publications, but are normally inserted            1992:113)#4. Proposal 1991/92:83 for a new
in legal magazines, with the result that there is           consumer credit act #5. Proposal 1993/94:123
no bibliographic listing. The catalogues have               for an adjsutment of debts act #6. Proposal
been accepted by the libraries of some Law                  1995/96 for a business recosntruction act #7.
Faculties but with negative results. #The only              Proposal 1996/97:166, review of adjustment of
specific reference that we know of is:                      debts#8. Parliamentary report 1987/87:LU12,
«Consumer overindebtedness in the Financial                 adjustment of debts etc.#9. Parliamentary
Services sector». Consumer Affairs Council                  report 1991/92:LU28, new consumer credit
(Consejo de Consumidores y Usuarios),                       legislation#10. Parliamentary report
diciembre de 2001. C/ Príncipe de Vergara, 54.              1992/93:LU49, adjustment of debts#11.
28006 Madrid. #                                             Parliamentary report 1993/94:LU26,
                                                            adjustment of debts act#12. Parliamentary
                                                            report 1995/96:LU11, act on business
                                                            reconstruction etc#13. Parliamentary report
                                                            1997/98:LU1, review of adjustment of
                                                            debts##Commentaries etc#1.(adjustment of
                                                            debts)#2. (consumer credit)
                                                            #Articles###Other material




yes##Please provide a copy or indicate                     yes#See item 2. Under "Other material" reviews and
where the material is available:#-«Consumer                 proposals for changes are listed. The material is available
overindebtedness in the Financial Services sector». Consejo from Parliament, State Tax Office and Consumer Agency. It
de Consumidores y Usuarios, diciembre de 2001. C/ Príncipe is unlikely to be in an electronic form, and is in Swedish
de Vergara, 54. 28006 Madrid. #                             only. It may be added that the Government has appointed a
                                                            committee (Dir. 2002:139) to evaluate and to review the
                                                            Adjustment of Debts Act (1994:334). The brief expires on 31
                                                            Dec 2003. In this context, proposals may be made which
                                                            affect replies to this questionnaire. #Please
                                                            provide a copy or indicate where the
                                                            material is available:#See above.#
There is no organisation at government level       Department of Justice
(non judicial) that deals specifically with
problems arising from overindebtedness.
Generally, and always that the affected party is
the consumer, (having asked for the loans to
meet his personal needs), government
responsibility lies with the institution normally
in charge, such as the Ministry of Health and
Consumer Affairs via the National Institute of
the Consumer to which he belongs
(nationwide), the autonomos consumer councils
(regional) and the Municipal Consumer
Information Offices (local); these last two, least
important in territory, most actively work to
protect the consumer in public institutions. In
the financial arena the Bank of Spain is
responsible for inspecting financial entities
reporting to it via its Commission for Client
Defence which deals with client complaints. In
the area of overindebtedness it can only check
on the code of professional conduct of the
financial entity.


                                   th
yes; #Spain has Law 26/1984, 19        July, for the   no#There are five consumer protection laws
general protection of the Consumers and Users.         which cover different aspects of consumer
It is legally binding and was hastily passed           protection under civil law:#Consumer
following a poisoning epedemic in the early            Purchases Act (1990:932)#Act on Consumer
80´s caused by adulterated oil. Besides being          Protection in Distance Contracts and Door-to-
hastily passed it is characterized as a general        Door Sales Contracts (2000:274) #Consumer
text, too formal and not very specific. Since          Services Act (1985:716)#Consumer Credits Act
being passed in 1984 the Autonomous Regions            (1992:830)#Consumer Insurance Act
have been steadily taking on more                      (1980:38) #In addition, other statutes (laws
responsibility regarding consumer protection,          and decrees) contain provisions aimed at
with the result that the actual situation is one of    consumer protection. In property law, there is a
exclusive responsibilities corresponding to the        general provision in section 36 of the contracts
State (schematically and simplified), civil            act (avtalslagen, 1915:218) to the effect that
aspects, mercantile, procedures between                unreasonable contracts may be adjusted. This
private parties. And to the Autonomous                 provision is especially directed at consumer
Communities everything related to regional             contracts.#There is also a law (1994:1512)
policies and other government functions (plans,        regulating terms of contract in consumer
inspections and sanctions, etc.) within each           relations, which is in the nature of marketing
territory. The details of responsibilities can be      legislation. The Consumer Agency can invoke
studied in more detail in articles 39 and 41 of        this law to intervene in the marketing of credits
the Law 26/1984. Few of the articles of this           etc.     ##
Law can be effecively applied, only those
dealing with civil and legal aspects. #
yes; #Yes, but only partially.; as                    yes; #See item 5#
aforementioned we are dealing with a general
and formalized law, resulting that some areas
of this law affect financial services one way or
another. We can highlight the followin: 1) Rules
on advertising, included in article 8. 2)
Standards on general conditions and abusive
clauses, mentioned in articles 10, 10 bis and
additional first order; among them,we can
highlight the second clause (refering to possible
modification of interest rates by altering the
original index, or the actual contract if it has no
expiry date, number 18 (regarding the non
existence of the guarantees asked for in the
financial contracts), number 22 (about the non
obligation of the property purchaser to assume
the financial costs of its construction), number
24 (prohibits the charging of non solicitated
financial services), and number 29 (dealing with
the maximum interests applicable to current
account overdrafts), all of these from the
aforementioned first additional order. There is
also a brief mention in article 13.1.d, regarding
the right of information in the hands of the
consumer, in this case to be sure that he will
yes; #Spain has embodied in it´s internal legal       yes; #See item 5. Also, with respcet to the
system the Directive 87/102/CEE of the                Consumer Credit Act, (Konsumentkreditlagen)
Council, dated 22nd December 1986, dealing            both the Consumer Agency and the Financial
with bringing closer together legal procedures,       Inspection Agency provide general advice, an
regulations and administrative procedures of          activity of major importance to the application
the member states in the area of consumer             of the Act. In a number of cases, the Supreme
credit, in the same way when same was                 Court, for example, has cited this advice as
modified in 1990. This transposition was              decisive in its rulings on good credit extension
                                         rd
brought into effect by Law 7/1995, 23 March,          prctices under section 5 of the Consumer Credit
on Consumer Credit.#                                  Act. Such general advice is available from the
                                                      authorities in question. #
no#We cannot say that maximum levels for             no#There are no fixed maximum interest rates,
interest rates exist. Nevertheless, there are        but there are sanctions on usury which preclude
some regulations which limit the abusive             very high interest rates. For interest rate to be
behaviour of financial institutions: #-Law to        determined as usury, however, it must be
supress Profiteering: declares null and void         extremely high. The Consumer Credit Act
contracts for loans which manifestily charge         (sections 10 to 13) contains provisions on
exorbitant interest rates, or which have unfair      information on interest rates, settlement of
conditions, where it is thought that loans have      issues arising from the adjustment of interest
been accepted by the borrower due to                 rates etc. #
distressing circumstances, naivety or mental
deficiency. To be evaluated, one has to abide
to the circumstances of each case and at the
moment that the loan is taken out.#-Consumer
Credit Law: also does not state the maximum
permitted rate of interest; it simply obliges that
the equivalent annual rate is included in the
contract (expressed as a percentage of the total
cost of the loan, known in Spain as TAE), and if
not mentioned the penalty is the application of
the legal interest (a rate that for certain legal
reasons is published annually in the Laws of
State Budgets; for 2003 it is 4.25%). #-This
Consumer Credit Law only sets an interest rate
for a certain residual type of loan, current
account overdraft (written or unwritten, but not
Consumer loans in Spain can be caracterized in       See item 8.#
general as being of moderate amounts (up to
25,000 euros for example), which only require
the personal guarantee of the borrower.
Occasionally, due to limited guarantee that the
borrower can offer, a guarantor may be
requested or a mortgage taken out on a
property. The Consumer Credit Law can only be
partially applied in this latter case. These
consumer credits are used to purchase from
furniture or         electrodomestic goods to
cars (to mention the most frequent items)
##Interest rates can vary tremendously
depending on the financial institution with a
range of between 7 to 12%, depending on the
liquidity of the borrower, the amount and use of
the capital, payback period etc. One must add
on this type of interest the commissions
charged, normally for preparation, opening and
modification/cancellation. #
As with the previous point, there is no legal     See item 8.#
imperative to impose a maximum rate when it
comes to mortgage interests. Limits exisit
regarding the way in which interest rates are
calculated, in such a way that it is always
intended that, being variable, the same
reference is objective and is not in the hands of
the financial institutions. At present, and
bearing in mind the very high house prices in
Spain (1998-2002 saw an increase of 74%),
the payback time for this type of loan has
almost doubled to 30 years; meaning that fixed
rate mortgages for home buying hardly exist;
and with variable rates the most common
reference is the Euribor; the competition
between one financial institution and another is
defined by the differencial that is applied (%
added to the reference index), and which varied
between 0.4 and 1.5%).#
As our activity is centred exclusively around     See item 8.#
consumer affairs (where the consumer is the
end user of the good or service and for personal
usage), we do not have any detail of interest
rates at a business level. Nevertheless, it is
sure that repayment periods are much shorter ,
rarely exceeding 10 years.#
With fixed interest rate(s) it is the parties         See item 8. Also, the Act on Interest Rates
involved in the loan contract itself who              (räntelagen, 1975:635) provides for restrictions
determine the rate(s).##With variable rates we        on the penalty interest for delayed payments in
have to distinguish between personal loans and        case the parties do not have a contract on the
mortgages. ##Loosely, the Civil code                  interest rate. In such cases, a penalty interest
establishes that, <<The validity and fulfillment      may be exacted starting a month from the date
of the contracts cannot be left to the discretion     of the due payment. The default interest rate
of one of the contracting parties>> (art.1256);       may not exeed a rate determined by the State
and in the case of contracts of sale, whose           added with 8 percentage points. Nevertheless,
regulation can be similar to other legal              this does not prevent the parties from agreeing
procedures, specifies that<<The price                 on a higher penalty.#
settlement will never be left to the discretion of
one of the contracting parties>> (art.1449).
From this one can assume that decision making
on stipulating rates of variable interest should
not be left to the financial institution. ##More
specifically, article 8 of Law 7/1995 of March 23
(Consumer Credit), dealing with Personal
Loans. refers to the possibility of stipulating a
variable rate of interest. For interest rates to be
allowed to increase this possibility has to be
mentioned in the contract and the amount has
to be settled objectively bearing in mind that
the rates can go up as well as down. The
contractural agreement will determine; (1) the
#On the subject of personal loans it has been      #The basic assumption is - as described - that
pointed out that there are no clear guidelines;    the contract applies. For more details, see reply
non fulfillment of the requirement to indicate     under item 8.#
the interest rates then the applicable rate will
be the officially designated one. Concerning
personal overdrafts, the maximum will be 2.5
times the legal one, without the law imposing
the excess penalty. One can take it that it will
be reduced to this percentage. ##Regarding
mortgages, current regulation lies with the
government, resulting in government imposed
fines for non-fulfillment. Nevertheless, these
administrative norms can be set out by a
tribunal to litigate between parties as there is
no civil regulation of mortgages. ##Finally,
and refering to the Law to Supress Profiteering,
in the case of suspecting that a loan is of a
fraudulant nature, same will be declared null
and void, so that the parties have to revert to
their pre-contractual situations without the
operation inferring interests; and if too much
has been paid the lender will return it. One can
understand that this measure be too radical
bearing in mind that the borrower has an
interest in the loan, although under different
conditions, that is clear. #
#The consumer has to be informed of all the        #See item 13.#
expenses, commissions, costs, etc that come
with the loan. if they are not mentioned in the
contract they cannot be applied and the
consumer is not obliged to pay them. #
Costs must be detailed on the contract, and the     See above.The creditor does not have to
latter always formalised in writing. Therefore,     disclose details of his costs. A different matter
one knows in advance what these extra costs         is that, both in marketing and in the contract,
are simply at the time of paying the interest.      the creditor must clearly state the interest and
##With personal loans the basic information         how it is calculated.
regarding the contract is in article 6 of the Law
7/95; a) equivalent annual tax level; b) relation
of the total, number and period or dates of
payments, both of interests and other
expenses, such as the total cost of these
payments; and c) breakdown of the component
costs of the total credit.##With mortgages it is
the Order of December 12th 1989, Circular
8/90 which specifies the content of the
contract. These clauses should also be written
into the contract. These norms are just
mentioned as they are rather extensive.




#No, the Spanish Directive on Consumer Credit       #No#
was passed under the mandate of Directive
87/102; as the Spanish Law is from 1995, it
also absorbed the modification made to the
Directive of 1990 (Directive 98/88). And the
obligations regarding information of the Spanish
law repeat those of the Directive.#
There is no legal obligation here, so                 Yes, the creditor must always thoroughly
responsibility is with the financial entity.          investigate the debtor's creditworthiness. This
Therefore, for the effectiveness of the loan, it is   investigation covers financial situation,
normaly required that the debtor show proof of        property, assets, income etc. Provisions to this
VAT returns, work contract and payslips, to see       effect are contained in the Consumer Credit Act
if the borrower can meet his responsibilities to      (Konsumentkreditlagen) and in the general
the loan.##At the same time there are                 advice related to it. Another provision is in
registers that contain names of people who are        section 13(2) of the Banking Act
bad payers. It involves private files managed by      (Bankrörelselagen 1987:617), which prescribes
the actual financial institutions and public ones     that credit may not be extended if the debtor
managed by the Bank of Spain.                         cannot be expected to repay it and is unable to
                                                      provide required security.




#There is no responsibility on behalf of the          #In the 1990s, the Supreme Court ruled in six
debtor nor the creditor in the case of new            or seven cases where the claim was that
credits or the extension of existing ones, vis a      deficiency in the investigation of
vis other creditors, except where bad faith           creditworthiness should lead to adjustment or
exists, in which case criminal responsibility may     elimination of the obligation to repay the loan.
exist.Yes, there are two types of action,             The principle confirmed by the Supreme Court
recognised by our law, which a creditor can           here was that in only exceptional cases can
take to protect his credit; one being                 deficient investigation of creditworthiness have
subrogatory action, whereby the creditor has          such an effect. Accordingly, the basic principle
the power to use all his rights to recoup his         is that the debtor must repay in full even if it
goods in the posession of the debtor.The other        was improvident to extend him credit. See also
action is revocatory, whereby the creditor can        item 25 below. #
sue the debtor for fraude comitted against him.
#
yes; #In fact, there are the so called bad         yes; #Yes, there are different registers for this
debtors lists. They can be public or private. #    purpose. The enforcement register is a public
                                                   register where all individuals and companies are
                                                   entered that are subject to the enforcement of
                                                   debt or other obligations. Bankruptcy and
                                                   adjustment of debt are also recorded. The
                                                   register is governed by an special legislation. In
                                                   addition, there are private companies which
                                                   maintain registers of defaulted payments etc.
                                                   This type of business is regulated by the Credit
                                                   Information Act (1973:1173). According to the
                                                   Act, collection of credit information is subject to
                                                   licence and is controlled by data protection
                                                   authorities. Information of individuals in the
                                                   register must be eliminated three years from
                                                   the end of the year in which the record was
                                                   made. Information from such privately
                                                   maintained registers is obtained against
                                                   payment. When information is bought, the
                                                   subject of the information must be notified
                                                   accordingly. Individuals registered in this way
                                                   may obtain the information concerning them
                                                   free of charge. In Sweden, the largest operator
                                                   in this field is Upplysningscentralen AB (UC). #


 Regarding the public regristers, the CIRBE        See item 19 .
(Bank of Spain´s Central Credit Reference) has
been recently modified by Law 44/2002 of
November 22nd. CIRBE is only accessible by
the credit agencies and then only when they
have a request for a loan from the potential
client. ##The private registers are under the
Constitutional Law 15/1999, December 13th,
and are regulated by the Protection of Private
and Personal Information, and the Proceedure
1/1995, March 1st, dealing with the offering of
services containing information about personal
solvency and credit. These private dosiers have
been created by the same financial institutions,
who define their working parameters, and must
rigourously respect the legal procedure. There
are several lists (BADEX, ASNEF, EQUIFAX...).
The functions of the Central Credit Reference     See item 19
are contained in articles 59 and others following
in the abovementioned Law 44/2002, and at an
administrative level by the Banl of Spain´s
Circular 3/1995, September 25th.##The bad
debtors registers can only be accessed with the
consent of the financial institutions who, at the
same time, should study the entries and always
under government requirements which, since
the change to law 44/2002, are due to be
modified. This norn regulates in great detail
nature and objectives of the CIRBE, the
declaring bodies, content of the statements,
proceedings based on the information offered,
it´s use and cessions, how long the information
can be kept (10 years) and the right to access,
modification and cancellation.
Problems only arise if a person is listed when        No
asking for a loan. The fact is, once listed it is
very difficult to get a loan, and the
circumstances of each case should be taken
into account. ##In the last few years there
have been a number of decisions against the
financial institutions for improper listings, no
matter if damages have been caused or not by
being listed.




The system is different for minors and                No, in Swedish law both spouses in marriage
spouses.##In the case of a contract for a loan        are independent financial actors. One pouse
signed by a married couple the pre-nuptial            does not have any liability for the other
financial agreement must be known (division of        spouse's debt. A different matter is that the two
property or joint property). If there is a division   spouses can of course enter into a credit
of property, each partner is responsible for          contract together, for a home loan, for
what he/she signs, and since there are not joint      example. #
belongings, the debt is carried by the partner
who signed the contract. With both partners
signature on the contract responsibility is
shared.##In the case, of joint property
agreement, their joint assets will be liable if the
financing was agreed by the spouses for the
management or maintenance of their property;
otherwise, if there was not consent of both
partmers the signer of the contract will respond
with his personal assets first and with his/her
share of the joint assets second.##Minors
cannot acquire a loan without parental or
guardian consent, nor is their consent valid to
contract. Without consent the contract is void,
but disability cannot be cited by the able. The
period of nullification will last four years from
the time that the minor was able to act. The
disabled is not obliged to repay unless he
benefits financially from the good or money
As already mentioned in the case of minors,        See item 23.
parental or guardian consent is required
otherwise the contract will be nullified, although
the minor or disabled has to initiate the
nullification. ##With contracts signed by one of
a couple thay are totally valid, and the question
lies with determining if responsibility for
payment lies with the joint earnings settlement
or the patrimony of the non-signing spouse.




We are unaware of any actions at a                Yes, it is quite common to provide guarantee
government level. Besides, responsibility lies    for the loans for relatives. Is is often done
with the autonomies or regions and each           without checking the financial situation of the
Autonomous Region is free to make its own         relatives. A majority of the legal cases cited
political agenda in this area. ##There are laws   above (item 18) dealt with such guarantees;
in place to protect the family such as            the claim was that the investigation of
prohibiting the seizure of household furniture    creditworthiness was not carried out properly
and minium household incomes.                     with respect to the guarantor.
yes; #We have already mentioned the result of       yes; #Yes, in cases where the parties have not
not stating the type of interest: the application   agreed on it in a contract. The basic principle is
of the legal interest. This is decided annualy in   freedom of contract. In absence of contract, the
the national budget, and for 2003 it is 4.25%.#     provisions of the Act on Interest Rates apply
                                                    (see item 8).##




#The non payment of a debt breaks the               #No, not really. The court may declare that a
conditions of a contract. In this case, the         debt is enforceable in full. The Debt
creditor can demand the fulfilment or resolution    Enforcement Act, however, contains provisions
of the contract, and in both cases with the         for the enforcement stage to the effect that
possibility of claiming for the lost years and      the debtor may keep what is absolutely
damages suffered. This control or anticipated       necessary for daily living. #
termination of the contract can normally de
applied under any type of non-fulfilment of the
contract on behalf of the debtor, but it is best
to interpret clauses in the overall context of
each case; it is not the same that one delay
with a payment in a long term contract (20
years for example) is sufficient to warrant the
immediate payment of the rest of the loan,
which would cause great harm to the
borrower.##When the obligation is to pay an
amount of money for damages, and there is no
previous pact, the payment will be those
interest rates agreed, and in the case of no
agreement it is the legal rate. Frequently the
agencies offering credit charge very high
penalty rates (up to 29%) and just as
frequently the courts rule against them for
applying abusive clauses, reverting to the legal
interest of 2.5 times the rate for current
account overdrafts (art. 19 of Law 7/95,
The financial institution can cancel a loan with    This is regulated in sections 20 to 24 of the
the non payment of any installment. This clause     Consumer Credit Act. They permit early
for early termination is understood to be valid,    termination of a consumer credit in the
even if there is already a non fulfilment on        following cases:##1) The payment is in default
behalf of the lender, although with the             for more than a month and exceeds ten per
comments expressed in the previous question.        cent of the credit or two instalments are in
                                                    default which exceed five per cent of the
                                                    credit.#2) the payment is in other way
                                                    substantially delayed. ##3) Security for the
                                                    credit has substantially decreased in value.#4)
                                                    It is obvious that the debtor, by evading, losing
                                                    property or acting in some other way, avoids
                                                    repayment.#In all the cases it is required that
                                                    the creditor has in the contract retained the
                                                    right to early payment. #If the creditor wants
                                                    to exercise the right to claim payment he must
                                                    give notice of early termination of the contract
                                                    four weeks in advance. If the debtor pays the
                                                    instalments due during this period, he is not
                                                    liable to pay the rest of the credit in advance.




#The only requirement to claim is the non-          #see item 28.#
payment by the debtor. Once the extrajudicial
demand is made the debtor is considered a bad
debtor. If the debtor does not pay what is
demanded the court ruling can be for the total
of the debt (capital plus interests accrued up to
the date of the demand, bearing in mind the
thoughts expressed in question 28).)#
yes; #There are no non-regulated financial            no
activities in Spain. The financial institutions are
banks, building societies and credit unions, the
only ones authorized to issue credit from their
reserves of the public funds. There are also
credit agencies which, although are authorized
to give loans, cannot receive money from public
funds. ##Loans are negociated directly with the
financial institutions. Perhaps in cases where an
estate agency looks for finance on behalf of a
buyer, the ultimate lender is also the financial
institution. Regarding personal loans, the only
intermediary is the seller, who passes the loan
petition on to the financier. #




#As mentioned, the offering of finance is mainly ##
dealt with directly by the credit institutions, the
only ones permitted by law to do so.##All this
activity is overseen by the Bank of Spain which
acts in total diligently in this area. Regarding
the banking practices of its clients it
concentrates on the application of the old
Complaints Procedure (now called the
Commission for the Protection for Clients of
Financial Services), and can sanction where
there is non-compliance. #
no##




yes; #The most important regulation concerns      no##
mortgages, Order, 5th May 1994. The
Consumer Credit Law also refers to other areas,
such as overdrafts. ##Spain is still waiting to
implement Directive 2002/65/CE, of
September 23rd 2002, concerning marketing of
financial services aimed at the consumer
outside the financial boundaries. #
yes; #Whilst not in consumer protection law,        yes; #    ##
there is the moderating opinion of the judges
when it comes to deciding on repayment
timetables based on the economic situation of
the debtor. It is the Payment by Installment
Law, subsiduary application to that of
Consumer Credit, which states the following in
article 11: #<<The judges and tribunals will
exceptionally, and with just cause, use its
discretion in situations such as family tragedy,
unemployment, accidents at work, long-term
illnesses and other unfortunate situations, to
impose new installments or change the terms
and setting where necessary the surcharges of
the new installments. #Equally, penalty clauses
should also contain moderating clauses of
agreement in the case of early payment or non-
fulfilment by the buyer>>##Here we are
dealing with an old rule, as the Payment by
Installment Law, which was substituted by the
above, contained an identical clause.#


yes; #Each supplier sets its own rules regarding    yes; #Municipalities have the duty to assist
disconnections. However, they require that          individuals with advice in questions of domestic
there is a default and prior notification on        economy. This arises from the general social
behalf of the supplier, explaining the reasons to   services legislation and section 3 of the credit
the affected party.#                                adjustment act. The Consumer Agency is the
                                                    central authority responsible for this activity. #
yes; #Article 22.4 of the Law of Civil Procedure   yes; #There is fairly extensive regulation to
allows the occupier to stop the eviction if all    protect tenants. To put it simply, a tenant who
arrears are paid. This measure is only allowed     has defaulted on the rent must be given notice
once. #                                            in a prescribed order and social welfare
                                                   authorities must be notified of the fact. The
                                                   authorities can then step in to pay the rent. If
                                                   they do not intervene, notice becomes effective
                                                   unless theh tenant within a certain period pays
                                                   the due rent. If the tenant fails to do so, the
                                                   court may give an eviction order. #




yes; #The General Taxation Act is the keystone     yes; #Yes, such debts are covered by The
for the Spanish tax system. This norm allows       Adjustment of Debts Act, see item 48.#
for the extension, reduction or deferment of
payment, but with interest added for the the
delay in payment: granting an extension or
deferment is at the descretion of the
Department of Tax, taking into consideration
the economic-financial situation of the debtor.
##The general rule is that guarantees are
required, in the form of joint guarantees from
the bank or from similar financial institution.#
no                                                   yes; #But it is not permitted to assign salary or
                                                     wages before they are due. In other words, the
                                                     wage earner may not dispose of his wages
                                                     before the date they are due. Similarly, the
                                                     wages that are not yet due cannot be subject to
                                                     assignment. #




yes; #Of course the whole salary is not              no
guaranteed, no matter how much it is, but
there has to be access to the minimum to meet
basic needs. ##The Law of Civil Procedure
allows the embargo of wages, if such an order
exists; in the first instance, cash or any type of
current account is frozen; in seventh place
household goods; in eighth place salaries or
wages; and ninth credits or other mid to long
term rights (art. 593).##Art.607 states that
any salary, wage, pension, compensation or its
equivalent, cannot be embargoed if it is below
the interprofessional minimum wage (15.04
euros/day or 421.20 euros/month, for
2003.##Anything above this minimum can be
embargoed according to the following scale:#1º
For the first additional amount up to the double
of the minimum interprofessional wage,
30%.#2º For the additional amount up to three
times the minimum interprofessional salary,
50%.#3º For the additional amount up to four
times the minimum interprofessional salary,
60%.#4º For the additional amount up to five
times the minimum interprofessional salary,
75%.#5º Any amount exceeding the previous
one, 90%.#If the foreclosed is beneficiary of
no##                                               yes; #There is a Debt Collection Act which
                                                   defines#1) who is allowed to carry out debt
                                                   collection#2) the manner in which the claims
                                                   must be made#3) which costs may be charged
                                                   for debt collection.#




#See question 40; private economic sanctions       #Yes, see above. There is a schedule which is
can only be carried out by the judges and          adjusted at certain intervals and which states
tribunals. Without being public collections (eg.   that collection costs may reach certain
taxes), the Administration can embargo             maximum amounts (currently, SEK 150 for
directly, but this should be overseen by the       claim, SEK 140 for drawing up an instalment
Courts.#                                           schedule, and SEK 45 for reminder). This
                                                   derives from decree (1981:1057) on
                                                   reimbursement of debt collection costs.#
#In recent decades there have appeared in           #No.#
Spain companies specialising in debt collection,
but by their behaviour, on many ocassions
using duress, their actions have been utterly
rejected by the penal courts (where such
coercion involves penal responsibility) and civil
ones (when the right to the debtors self respect
has been encroached), since it cannot be
diminished in this predicament. #




#Question 39 deals with the maximum                 #Yes, there are specific provisions in the Debt
percentages of wages that can be embargoed.         Enforcemnt Act . This is a very common - and
#                                                   effective - form of enforcement. Garnishment of
                                                    wages is permmited for any type of debt and
                                                    may go on indefinitely. The debtor may keep a
                                                    certain amount to satisfy basic needs.The rest
                                                    is handed over to the creditor who has sought
                                                    garnishment. In order to effect garnishment,
                                                    the creditor must have an enforcement order
                                                    from the court. The state need not have a court
                                                    order but can carry out garnishment directly.#
Article 606 of the Law of Civil Procedures states    According to Debt Enforcement Act 5:1 the
as non-embargable, besides books and                 furniture,#personal items of the debtor and his
professional instruments of the debtor               family,#items with emotional value,#the
(providing that their value has no relation to       working implements and comparable items
the amount demanded), the furniture and              needed by the debtor to maintain his
fittings, clothes of the persued and his family if   livehood,#all to a reasonable value.
not considered superfluous. Generally, non
embargable goods are foodstuffs, fuel and
others considered by the tribunal necessary for
the persued and depentents to avail of a
dignified standard of living.




 #The current regulation covering civil              #The amount permitted to the debtor for basic
procedures (dealing with seizure of debtors´         needs is reviewed annually.#
goods) is Law 1/2000, of January 7th, of the
Civil Procedure, which replaces the previous
law, the Royal Decree of Feburary 6th, 1881).#
no     Yes. What is the legislation in your country that
       applies to consumer bankruptcy? Please give the
       name of the law:#Yes, the Adjustment of Debts
       Act (skuldsaneringslagen) (see item 34 above)
       can be seen as an alternative to consumer
       bankcruptcy. Otherwise the bankruptcy law
       applies to such individuals. #Effective date of
       this law: The Adjustment of Debts Act entered
       into force on 1 July 1994. #




no##   yes; #The Adjustment of Debts Act will be
       reviewed by a committee which will propose
       improvements. The committee has recently
       started its work and will present its conclusions
       in 2005.#Please give the name of the draft etc.: #
There is no definition of consumer bankruptcy,        1) Bankruptcy#2) Adjustment of debts#are the
except that it is applied to those people are at      two institutions that exts.#The Adjustment of
the very limits of their business or professional     Debts Act (1994:334) states that a physical
activity.##There are two types (the current           person may be granted adjustment of debts if
project , Auction Law forsees them converging),       his financial situation fulfils the stringent criteria
depending if the debtor in question is a              under the Act for insolvency. The criteria
business or not. If not, he is obliged to declare     include other than temporary inability of the
bankruptcy if debts are greater than assets and       debtor to repay his debts as they become due.
he is forced to stop paying his current               An additional criterium is that there are special
obligations.                                          reasons for granting adjustment. Consideration
                                                      is here given to the length and reason of
                                                      indebtedness and to the efforts by the debtor,
                                                      to the best of his ability, to reach agreement on
                                                      an instalment schedule with the creditors. #If
                                                      an application for adjustment of debt is
                                                      granted, a payment schedule for five years is
                                                      drawn up under which the debtor is required to
                                                      pay everything beyond what is absolutely
                                                      necessary for his and his family's living costs.
                                                      Under this payment schedule, the rest goes to
                                                      the creditors. After this five-year payment
                                                      period, the debtor is discharged from debt.#


Please explain the philosophy of your bankruptcy      Please explain the philosophy of your bankruptcy
legislation more detailed:#For businesses the         legislation more detailed:#Yes, it is, as far as
system is eminently repressive: the goods of          adjustment of debts is concerned, but not in
the company are sold off to pay the debts; to         the case of bankrutpcy law. If an individual has
avoid such measures it can take the measure           extensive business undertakings and a
known as the suspension of payments; and              complicated financial situation, the assumption
after the winding up is the bankruptcy.##For          is that bankruptcy is chosen instead of
non-commercial entities the system is that of a       adjustment of debts. #
creditors auction, still with the possibility of an
agreement with creditors, which is explained in
the following section. Basically, it means a
different ending, as the arrangement of
creditors policy can be adopted by judicial
resolution. This wait and see has to be initiated
by the debtor, but the auction by both parties,
debtor and creditor.#
no#The process of agreement with creditors          no#Proceedings to apply for adjustment of
already mentioned is not obligatory and,            debts begin with an filed with enforcement
besides, is resolved in court. But the calling of a authorities who carry out a preliminary
creditors auction carries legal liability if it is  examination of the application. This
found to be provoked or seriously                   examination may lead to a refusal or a decision
disadvantageous for the debtor. #                   to initiate adjustment proceedings. In the latter
                                                    case, the authorities make a complete
                                                    investigation into the matter. They can then
                                                    take a decision for the adjustment of debts, if
                                                    none of the creditors objects to it. However, if
                                                    one of the creditors objects, the case is
                                                    remitted to the court, which may rule on
                                                    adjustment of debts even against creditors'
                                                    will.#This can be regarded as a pre-court
                                                    procedure.This means that also those cases
                                                    that reach courts will have been investigated by
                                                    enforcement authorities.#For more details, see
                                                    item 57 below.#




no#Yes, there is a prior voluntary procedure,       yes; please describe the voluntary procedure more
but it is not an out of court action but resolved detailed:#See item 50 above.#
within the in court.##The Arrangement with
Creditors policy is regulated by the Law of Civil
Procedure of 1881 (whilst waiting the ultimate
Bankruptcy Law to be passed), and can only be
instigated by the debtor. Besides, the latter
cannot be bankrupt (hid debts greater than his
assets). The debtor formally requests the
arrangement with creditors, and a meeting is
called of all the creditors, who can agree to the
debtors proposal (they need a two thirds
majority) and they account for at least three
fifths of the debt. The agreement affects all
named creditors that did not protest in time and
challenge the decision. #




As explained, the arrangement of creditors is a     See item 50 above.#
voluntary procedure decided in the courts; the
acting judge is that of the local court where the
debtor has his address.#
In Spain court fees are only for companies and
not private individuals. And as there is no need
for lawyers and solicitors there are no legal
application fees.




Legal statistics are in the hands of the General   See item 50 above.I do not have access to the
Council of the Judiciary, a government body.       latest statistics. In the first years of the
However, there are no statistics available for     Adjustment of Debts Act (1 July 1994 to 21
these procedures.#                                 december 1999) 22,638 applications were
                                                   submitted to enforcement authorities. Of these,
                                                   13,088 were refused. Some 3,400 applications
                                                   were granted, and some 4,800 cases reached
                                                   courts. More recent statistics are available from
                                                   the State Tax Office (www.rsv.se). There are
                                                   no statistics of the 4,800 cases that reached
                                                   courts as to how many of them were decided in
                                                   favor of the applicant. #As regards the
                                                   situation in 2000 to 2002, I attach a file. #




As with above, the General Council of the          The duration of the pre-court procedure varies,
Judiciary does not collect this information.#      of course. A problem that arises here is that of
                                                   particular "waiting periods": it is only after
                                                   certain periods of time have elapsed from
                                                   notifications and service of information etc. that
                                                   the procedure can be carried on.#The
                                                   procedure with the enforcement agency takes
                                                   usually less than one year and most cases are
                                                   decided in less than six months. If the case
                                                   goes to the court, the time varies. It can take
                                                   several years for a case to go throuhgh all
                                                   appeal instances.#
Please explain in detail and give examples:#We feel   Please explain in detail and give examples:##
that the arrangement with creditors is not a
widely known process and, therefore, hardly
used. Private negociations are more fruitfull, to
a greater or lesser extent, but the pressure
exerted by a creditor, if more or less a strong
entity, is what can stop debt
renegotiation.##In any case, black-listing is the
alternative in these cases whereby the debtor
declares insolvency. This is normally the most
common response.#




As mentioned, the court run bankruptcy                As was explained under item 48, the
system, in the case of private individuals, is        enforcement official must remit the case to the
two-fold; first, the debtor can voluntarily           court, if a creditor objects to the adjustment of
initiate the aforementioned judicial process of       the debt. The court then calls a meeting of the
arrangement with creditors; and the other             debtor and all the creditors. The purpose of this
process, voluntary or obligatory depending, is        meeting is partly to enable the debtor and the
the creditors auction; voluntary if initiated by      creditors to supplement the investigation by the
the debtor and obligatory if done so by the           enforcement official and partly to debate
creditors.##The latter consists of a process of       whether or not the debtor's application for
collective action against the estate of the           adjustment should be granted. The court then
debtor, and should be made when assets are            takes a decision a) to grant adjustment of
less than debts and current repayments cannot         debts, or b) to dismiss the application, or c) to
be met. The creditors will ask for the auction to     return the case to the enforcement official fur
begin when the following conditions are               further investigation.#It may occur that the
established: two or more actions are pending          enforcement official dismisses an application
against the same debtor, and when there are           directly, without any investigation. Such
not enough goods free of other processes to           dismissal may be appealed to the court of first
cover the amount demanded. Also, when the             instance. The court may then a) declare the
agreement reached by the process of                   enforcement official's decision effective, or b)
arrangement with creditors is broken, the             carry out an investigation of its own and grant
corresponding auction will then take                  the application, or c) return the case to the
place.##Once the auction has been legally             enforcement official for further investigation. #
declared, the insolvent is prohibited from
administering and disposing of his belongings,
powers which pass to the trustee and to the
official receiver at a later stage, who take
The difference between the Arrangement with         See 48 and 57 above.#
creditors (“quita y espera” ) and Creditors
Meeting lies in that, with the former there is no
possibility of auction (less assets than debts)
and it can only be instigated by the debtor to
seek a reduction (“quita”) of the debt or a
delay on the repayment (“espera”). The
Meeting of Creditors, however, is a judicial
ruling on the estate, which can be initiated
directly by the creditors and not just the
debtor. #




The trustees are chosen by the creditors, must      See items 48 and 57 above. Sweden has no
be adult, physically present, do so freely and do   system for appointing counsel or trustee in debt
not represent anyone nor intend to and live         adjustment cases. The obligation to investigate
locally (art. 1215 old Law of Civil Procedure).     rests with enforcement authorities.




#The cancellation has to be voted voluntarily by #See item 48.Yes, a decision to grant
the majority of the creditors, already explained.   adjustment entails discharge - after the five-
The auctions´ objective, on the other hand, is      year payment period. Discharge does not in any
to sell off the estate of the debtor.##In the       way affect the liability of the co-debtor
case of common debt, the debtor can be              (guarantor, e.g.). Consequently, the latter
severely or jointly; with severely, all of the      continues to be fully liable to pay, in accordance
debts can be reclaimed, only with clear             with his obligation.#
agreement. If jointly is assumed, the creditor
negociates settlements with each of the
debtors, then leaves them to decide on how to
proceed. #
no                                                  yes; #The answer is no. There is also legislation
                                                    to the effect that defaults, inclduing completed
                                                    debt adjustiment is recorded in various
                                                    registers. A record of debt adjustment may
                                                    remain in the register for the entire five-year
                                                    payment period and, in addition, till the end of
                                                    the year that began after the year of
                                                    completion of the payment period. During this
                                                    time it is difficult - not to say impossible - for
                                                    the person to obtain new credit, buy on
                                                    instalment, get a credit card, hire or car etc.#

The principal effect that is accquired with the     Yes, there is a specific rule about this.
arrangement with creditors or auction is to stop
any future proceedings; if the debtor in this
situation faces whatever type of proceedings,
he can oppose the same citing whichever
position of arrangement with creditors or
auction.##Nevertheless, there is a series of
priviledged creditors and favoured credits. It is
a complex system based on the special
priviledge given to specific possessions,
depending if they are furnishings or property,
or else based on the type of creditor (first,
credits in favour of the State, illnesses, wages,
etc.).
To be included in the main auction it is only         See above. The two conditions are: 1) other
required to be a creditor and be able to prove        than temporary inability of the debtor to pay his
your credit accordingly.                              debts as they become due and 2) specific
                                                      reasons. There are no qualifying amounts.
                                                      However, if debt adjustment has been granted
                                                      once, it is unlikely that is granted a second
                                                      time. On principle, you are entitled to one fresh
                                                      start, not two.




The ownership of the home is embargable. If           1) If you are renting your home - which is quite
the owner fails to pay his debts, protection is       common in Sweden - you have right to keep a
only offerered for furniture and household            certain amount to pay the rent. An assessment
effects. Nevertheless, the new Law of Civil           is made, however, of the home with respect to
Procedure, in article 693, can stop this process      the size of the family etc. You live in a
if the debtor can pay his outstanding debts, if       "luxurious" flat, you have to move into a more
only just offering the opportunity once during        modest one; and if you live in an attractive
the duration of the loan. ##The same applies          neighbourhood, you have to move into a less
when the debtor lives in rented property: a           attractive area. #2) If you own your home, you
precarious economic situation does not warrant        may keep it, provided that the related costs
valid opposition to the eviction. Sin embargo, in     (maintenance, interest) do not exceed what is
the case of non-payment and the eviction              considered reasonable. To judge this is however
process under way, the tenant can halt the            complicated, because it is often the creditor
process if he pays the plaintiff or makes             who holds the dwelling as a collateral.The
available to the tribunal or notary the total         creditor has to be able to rely on his right of
being claimed in the demand and the balance           lien, but the court (or the enforcement
leading up to the time of the planned eviction.       authorities) may, on certain conditions,
For this possibility to arise, it has to be for the   decrease the value of the collateral. In practice,
first time, likewise that the landlord, by            if his dwelling has any realization value, the
whatever self evident means, and with at least        debtor has first to sell it and acquire a cheaper
four weeks notice prior to the claim, has             place to live in before there is any point in
required payment and up to the date of said           seeking adjustment of debts.
claim, has not received payment.#
As mentioned in the previous question, non-         As regards private individuals, security may be
embargable goods are; furniture and household       in the form of #1) reservation of property#2)
goods, and clothes of the plaintiff and family      guarantee#3) collateral in movable or real
that are not considered superfluous. Generally,     property
non-embargable goods are foodstuffs, fuel and
others that the tribunal consider necessary for
the plaintiff and family to maintain a dignified
standard of living. ##The answer to question
39 what is the minimum interprofessional salary
of a debtor that can be embargoed. The
corresponding percentages that can be applied
are set out in this reply.##And regarding the
possibility of halting an eviction (rented or
private property), the details are explained in
the previous question.



There are no such exclusions. Within the            Excluded from debt adjustment are#1) child
classification of household goods and property,     support#2) property held as collateral (The
there is a series of criteria which classifiy       enforcement authorities and court have certain
credits in a priortized way and which are           possibilities to decrease the value of the
explained in the next question.#                    collateral, see item 64.) #3) student loans from
                                                    the state that become due in the future #1
                                                    and 2 are always excluded, while 3 are
                                                    excluded if the court or the enforcement
                                                    authorities so decide in a particular case- which
                                                    they normally do. In general, all types of debts
                                                    are adjustable, including taxes, fines and
                                                    similar.
Besides special rules for the deposit and           See item 66.#In debt adjustment cases, the
inherent expenses, in the case of goods and         Adjsutment of Debts Act takes precedence over
chattlels, the credit is guaranteed with a pledge   ordinary law on the priority of claims. Naturally,
excluding the rest until it reaches the value of    in other cases, a different order of priorities
the pledge.##In the case of real estate, the        applies.
preferences regarding credits are in favour of
the Administration, the insurance companies
(two annual payments on the insured goods)
and the mortgages. ##There also exists a
credit preference system, as mentioned, that
classifies the belonging as being a household
item or real estate.
As explained in question 39, the minimum that         Under section 5 (7) of the Debt Enforcement
is not embargable is equal to the minimum             Act (which applies to wage garnishing as well as
interprofessional salary. ##Anything above this       to debt adjustment), the debtor may keep a
amount is calculated as a percentage of the           certain amount. This amount, which is
minimum interprofessional salary as the income        determined once a year, must include all
level increases.                                      regular living expenses (food, clothes, hygiene,
                                                      electricity, telephone etc.) and, in addition, the
                                                      amount corresponding to the actual cost of
                                                      habitation (provided this is reasonable and not
                                                      too expensive). #The amount for normal living
                                                      costs is now about 4.000 Swedish crowns per
                                                      month for a single person and 6500 for
                                                      spouses. Every child under 5 years increases it
                                                      by 2.200 crowns and a child above 6 year by
                                                      2.500 crowns. A married couple with housing
                                                      cost of 6.000 crowns and eight year old son and
                                                      a five year old daughter may keep 17.200
                                                      crown per month (6.500 + 6.000 + 2.200 +
                                                      2.500) #
Of course we have only referred to salaries,          Clothes, chattel, radio, TV, stereo set, furniture,
whilst there are other sources of business and        tools etc.; also car, if it is not "luxurious".
professional income which do not fall under the
protection of Consumer law. Nevertheless,
these professional sources of income are
included in the overall calculation of income
received by the debtor. ##Also, belongings
which have been declared non transferable are
non embargable; secondary rights, which are
not transferable and unconnected to the
capital; goods that lack, on their own, asset
value; and belongings declared by any legal
order as being non impoundable.



Minimum duration: ##Maximum duration:                 Minimum duration: #The payment period is
##Exceptions: #There are no minimum or                usually fixed at five years. For specific reasons
maximum durations for repayment once the              a longer or shorter period may be set (section 8
legal claim begins. Once the embargos have            of the Adjustment of Debts Act).In practice, the
been carried out they continue until the creditor     period is always set at five years. #Maximum
is repaid. The Civil Code specifies that<<The         duration: #See above.#Exceptions: #See above.#
fulfillment of the debtors obligation lies with all
his current, and future, belongings>> #
The trustees have legally set fees which vary     There is no such function.#
according to the type of estate dealt with:#-0,5
% of public effects;#-2 % of the cash value of
jewellery, furniture, non-static goods or profits
that come from the administration of the
impounded goods;#-1 % of the cash value of
the sale of real estate and the auction rights;#-
5 % of cash activities of the operation not
linked to the aforementione;#-travel expenses
connected incurred to carry out the
operation.#The total amount is divided in equal
parts, if nothing is specified to the contrary. #



The aforementioned amounts are deducted              See 71.#
from the total of the auction according to a
preferencial form of payment.#




We are dealing with an extradordinarily              There are no special problems at all.
insitiutionalised system. The main problem is,
therefore, related to the necessary expertise to
be able to actively participate in the auctions.
#However, it is not normal for a consumer to
appear before this type of procedure, as it
cleary shows the economic difficulties that he
surely has previously gone through, and what
the non-payment of a few bills would place on
the creditor for out of court and judicial claims.
##Finally, it would be a good thing if there
were flexible procedures that allow feasible
payment schedules, always guaranteeing the
right of the creditor to his credit and the act of
good faith between the parties involved.
no##               yes; #Yes, municipalities are obliged to provide
                   counselling for household budgets as part of
                   their consumer guidance. This may entail
                   assistance in the submission to enforcement
                   authorities of applications for debt adjustment.#




See question 74.   see 74.
There are no conditions for this type of         No.#
consultancy and if they existed it would be on
an exclusively private basis.#




There have appeared recently a number of          See 74.#
agencies offering more than consultancy. They
come offering, at the debtors expense, services
to negociate with creditors, scheduling
payments and paying the bills as one, all this to
help the debtor pay. Dealing mainly with the
business sector they are organised like quasi
financial intermediary services, which have no
professional or government regulation. #
As mentioned in the previous question, they         See 74.
provide renegotiation services or the
assumption of previous debts. However, all
depends on the necessity of the debtor, the
possibilities of the intermediary and, most
importantly, the agreement of the creditor.




There are no government aid at this level.          No, the legal aid legislation does noes not
Perhaps we could cite the so called minimum         provide for free legal aid for debt adjsutment
salaries or the non-contributive pensions, which    cases, but the debtor may use the services of
are public forms of aid (state or autonomy)         municipal budget counsellors free of charge,
which intend to guarantee a minimum standard        and enforcement authorities who deal with
to all. But they are strictily social actions for   applications help with the investigation, at no
those at the bottom of the scale, not related       cost to the debtor.         #
with the problem dealt with here. #
#No, we do not know of any policies in this        #No. #
area, or we could be talking about autonomous
juristriction, whereby each region could work to
its own criteria. #




                                                   1) Banks, Insurance companies, Finance Companies
                                                   and Credit Card companies

                                                   2) The Swedish Finance Supervisory. It is a special
                                                   governmental body that
                                                   has the task to supervise Credit- and Insurance
                                                   institutions.
     Item                                                    1
Question       Could you please send us material concerning
               the following Legislation?

               Consumer Credit Legislation

               Consumer Bankruptcy Legislation

               Any other Legislation relevant to the below
               mentioned questions#
     Austria
Belgium   Yes, see annexed list of legislation.




Denmark
Finland   http://finlex.fi/english/laws/index.php
          57/1993 Act on the Adjustment of the Depts of
          a Private Individual#38/1978 Consumer
          Protection Act#523/1999 Personal Data
          Act#361/1999 Act on Guaranties and Third-
          Party Pledges#633/1982 Interest
          act#513/1999 Perintälaki (Act of debt
          collection)#37/1895 Ulosottolaki (Execution
          Act)#1031/19989 Asetus suojaosuudesta
          palkan ulosmittauksessa (Decree of protect
          share of wages)#
France   I have sent you legislation on overindebtness
         and around the subject#credit law is on the net
         : you can see the 2 laws on credit :#loi du
         10.1.1978 and loi du 13.7.1979#or look in
         "code de la consommation"#
 Germany        #




Great Britain   Please see Attachment Q1##The principal
                legislation is:-# Consumer Credit Act 1974;
                and#Insolvency Act 1986, as amended by the
                Enterprise Act 2002l
Greece    The legal Acts which provide for the consumer'
          s interests protection are the following#1) The
          basic Act which deals with the protection of the
          consumer in the field of consumer credit
          contracts is Joint Decision of Ministers of
          National Finance, Justice and Trade of F1 983-
          1991 as amended by Joint Decision F1
          5353/1994. In fact this Act has implemented
          Community Directive 87/102, as amended by
          Directive 90/88, in the greek legislation. Acts of
          the Governor of the Bank of Greece which
          regulate particular issues on consumer credit
          will also be sent both in paper and
          electronically#2) There is no Consumer
          Bankruptcy Legislation (see below under ..)#3)
          Law 2251/1994 on consumer protection, among
          other, regulates issues relevant to consumer
          credit and will be sent to IFF both in paper and
          electronically in english.#4) All pieces of
          legislation referred in this questionnaire will be
          sent to IFF both in paper and electronically




Ireland
   Italy     Unfortunately there's no italian legislation
             concerning consumer bankruptcy now (even if
             general bankruptcy law reform is in act); see
             for some frameworks art. 1186 civil code (in
             attachment), on the matter of anybody's
             insolvency; there's a discussion about the
             meaning of "insolvency" in this rule: someone
             thinks it's the same idea of bankruptcy law
             (inability to pay obligations "regularly", as they
             become due: art. 5 italian bankr. l.); but there
             are many writers (and courts) who think that's
             a static concept, in comparison to the dynamic
             of the bankruptcy rule (finally, the debtor not
             entreprenuer should be insolvent when his
             liabilities exceed his assets).




Luxembourg   All available documents are attached or
             annexed to this document.#
Netherlands   Wet op het consumentenkrediet,
              Staatsblad1997,63; Staatsblad 1997, 510;
              Staatsblad 1997,660; Staatsblad 1997, 776;
              Staatsblad 1997, 791; Staatsblad 1998, 446;
              Staatsblad 1999, 30; Staatsblad 2000, 553;
              Staatsblad 2001, 180; Staatsblad 2001, 481;
              Staatsblad 2001, 669#Wijzigingswet Wet op
              het consumentenkrediet#Wet schuldsanering
              natuurlijke personen, Fallissementswet
              [Bankruptcy Act] artt.284-362. #Dutch
              Bankruptcy Act consists of three titles:
              faillissementen [bankruptcy], surcéance van
              betaling [suspension of payment],
              schuldsanering [sanitation of debt. This act is to
              be amended. #Besluit aanwijzing diensten Wet
              op het consumentenkrediet#Besluit herindeling
              ministeriële taak met betrekking tot het
              consumentenkrediet #Besluit van 27 juni
              1984, houdende herindeling van de ministeriële
              taak met betrekking tot het
              consumentenkrediet#Besluit
              kredietaanbiedingen, Staatsblad 2002, 122
              #Besluit kredietvergoeding, Staatsblad 1991,
              549; Staatsblad 1997,20; Staatsblad 1999,27;
              Staatsblad 2000,156#Besluit
              vergunningaanvraag Wet op het
              consumentenkrediet, Staatsblad 2001,
 Portugal     415#Overdrachtsbesluit inzake de zorg voor
              We enclose the Portuguese legislation on these
              issues. It is available only in Portuguese.
Spain    Refer to attached zip file




Sweden   Laws that are in force in this field are:#1.
         Consumer Credit Act (1992:830) #2. Decree on
         Interest Rates in Consumer Credit
         (1992:1010)#3. Debt Collection Act
         (1974:182)#4. Decree on Debt Collection
         (1981:956)#5. Act on the Compensation of
         Debt Collection Costs (1981:739)#6. Credit
         Information Act (1973:1173)#7. Adjustment of
         Debts Act (1994:334)#8. Decree of the
         Adjustment of Debts (1994:347)#9. Debt
         Enforcement Act #
                                            1                                               2
We prefer material in electronic form. If you    -#Could you please also provide a list of the
have a foreign language version please           relevant literature for your country?
provide.#Otherwise please indicate where the
material is available on the net. In this case
please complete the net-address in the right
column.
Legislation relating to consumer credit and           Consumer credit:#E. BALATE, P. DEJEMEPPE, F.
collective settlement of debts is available in        DE PATOUL, Le droit du crédit à la
French and Dutch on the Service Public Fédéral        consommation, De Boeck, Brussels, 1995#M.
(SPF) Economie site:#http://                          DAMBRE, Consumentenkrediet, Gent, Mys &
www.mineco.fgov.be#Recent legislation is              Breesch, 1993#F. DOMONT-NAERT,
available in French and Dutch on the Moniteur         Consommateurs défavorisés : crédit et
Belge site:#http://www.moniteur.be#Draft              endettement, Contribution à l'étude de
legislation is available in Franch and Dutch on       l'efficacité du droit de la consommation,
the Chambre des Représentants                         Brussels, Story-Scientia, 1992#Le crédit à la
site:#http://www.lachambre.be#Judgments of the        consommation, Jeune Barreau de Bruxelles,
Cour d'Arbitrage are availabele in French and         1997#P. LETTANY, Het consumentenkrediet,
                                                      Antwerpen, Kluwer,1993##Collective
Dutch at:#http://www.arbitrage.be#Judgments of
                                                      settlement of debts:#E. BALATE, P.
the Cour de Cassation are available in French
                                                      DEJEMEPPE, F. DOMONT-NAERT, Le règlement
and Dutch at:#http://www.cass.be#
                                                      collectif des dettes, Dossier du Journal des
                                                      Tribunaux n° 30, Larcier, Brussels,
                                                      2001#COMMISSION UNIVERSITE-PALAIS, Les
                                                      procédures de règlement collectif du passif,
                                                      Liège, 1999#P. DEJEMEPPE, Le Guide du
                                                      traitement du surendettement, Centre
                                                      Coopératif de la Consommation, Brussels,
                                                      1999#B. DE GROOTE, De collectieve
                                                      schuldenregeling, Kluwer, 1999#G. DE LEVAL,
                                                      La loi du 5 juillet 1998 relative au règlement
                                                      collectif des dettes et à la possibilité de vente
                                                      de gré à gré des biens immeubles saisis, Fac.
                                                      Droit de Liège, 1998#E. DIRIX, P. TAELMAN
The texts (in Danish) of the Bankruptcy Act           (eds), Collectieve schuldenregeling in de
                                                      Literature On Debt Adjustment (Gældssanering )
(Konkursloven , the relevant paragraphs are §§ 197-   according to the Bankruptcy Act
237) and of the Consumer Credit Agreements Act        (Konkursloven ):#Mogens Munch: Konkursloven med
(Kreditaftaleloven ) can be found                     kommentarer, 9th ed. 2001 by Lars Lindencrone
at#http://www.cbs.dk/departments/law/sources_of_l     Petersen og Anders Ørgaard #Lilian Hindborg:
aw/love/lovindex.htm      #                           Gældssanering i praksis, 2nd ed. 1999 (with
                                                      Supplement 2001) #Gert Drews Jensen:
                                                      Gældssanering, 2nd ed.1998 ##Literature on
                                                      Consumer Credit Agreements:# Lennart Lynge
                                                      Andersen: Lov om Kreditaftaler med kommentarer
                                                      (3d ed. 2001)#Hans Helge Beck Thomsen:
                                                      Kreditaftaleret (3d ed. 2002)
#http:// http://finlex.fi/english/laws/index.php#   Niemi-Kiesiläinen, Johanna: Luonnollisen
                                                    henkilön velkavastuu insolvenssioikeudessa,
                                                    Helsinki 1995, Koulu, Risto - Havansi, Erkki -
                                                    Niemi-Kiesiläinen, Johanna: Insolvenssioikeus
                                                    Juva 2002, Koskelo, Pauliine - Lehtimäki, Liisa:
                                                    Yksityishenkilön velkajärjestely, Helsinki 1997
#http:// www.legifrance.gouv.fr/#   #
1. Consumer Credit                                   1. Consumer Credit#- Reifner, Handbuch des
Legislation#http://dejure.org/gesetze/BGB#2.         Kreditrechts: Verbraucherkredit und Realkredit,
                                                                                          nd
Consumer Bankruptcy                                  C.H. Beck Publishers: Munich 1991 (2 Edition
Legislation#http://dejure.org/gesetze/InsO#3. Any    forthcoming 2004)#- Schwintowski/Schäfer,
other relevant                                       Bankrecht: Commercial Banking - Investment
Legislation#http://dejure.org/gesetze/ZPO##http://   Banking, Carl Heymanns Publishers: Cologne
#                                                    1997#- Schimansky/Bunte/Lwowski,
                                                     Bankrechts-Handbuch (Volume 1-3), C.H. Beck
                                                     Publishers: Munich 2001#-
                                                     Rösler/Mackenthun/Pohl, Handbuch
                                                                      th
                                                     Kreditgeschäft, 6 Edition, Gabler Publishers:
                                                     Düsseldorf 2002#- Rösler/Wimmer/Lang,
                                                     Vorzeitige Beendigung von Darlehensverträgen,
                                                     C.H. Beck Publishers: Munich 2003#2.
                                                     Consumer Bankruptcy#- Wimmer (Ed),
                                                     Frankfurter Kommentar zur Insolvenzordnung,
                                                      rd
                                                     3 Edition, Luchterhand: Neuwied 2002#-
                                                     Münchener Kommentar, Insolvenzordnung
                                                     (Volume 1-3), C.H. Beck Publishers: Munich
                                                     2001-2003#- Kübler/Prütting (Eds),
                                                     Kommentar zur Insolvenzordnung, (Volume 1
                                                     and 2), RWS Publishers: Cologne, November
                                                     2002#3. Any other field of law relevant to the
                                                     below mentioned questions



   #http:// www.legislation.hmso.gov.uk/#(post       Please see Attachment Q1
1988 legislation and statutory instruments)#
#http:// lawdb.intrasoftnet.com#The data base is   1) Eliza Alexandridou, Hellenic and Community
called NOMOS. But one has to subscribe in          Consumer Protection Law, II, Thessaloniki
order to have access. We will send the material    1996#2) Veletzas G., Bank Credits and
by e-mail to IFF.#                                 consumer protection, Epitheorisi Emporikou
                                                   Dikaiou 1997, page 640#3) Georgiadis
                                                   Apostolos, Surety of credit, Athens 2001#4)
                                                   Gkouskou Aggeliki, The height of interest in
                                                   bank transactions, especially in consumer credit
                                                   contracts, #5) Dellios, Giorgos, Consumer
                                                   Protection in Bank Transactions, NoB 40
                                                   (1992), page 811.#6) Dellios Giorgos,
                                                   Consumer Protection and Private Law System,
                                                   the judicial control of consumer contracts and
                                                   its limits, Sakkoula Editions, Athens-
                                                   Thessaloniki, 2001.#7) Douvlis Basileios, The
                                                   judicial control of f of General Contract Terms
                                                   in bank transactions,.. 1/1999,p.4-41#8) Doris
                                                   Fhilippos, The .. of .. in the article 2 of
                                                   2251/1994 for the consumer protection and its
                                                   importance in common civil law, NoB
                                                   2000,p.737-766#9) Karakostas Ioannis,( In
                                                   collaboration with Dimitris Tzouganatos)
                                                   Consumer Protection Law 2251/1994, Athens-
                                                   Komotini 1997#10) Karakostas Ioannis,
                                                   General Terms in Bank Transactions, Athens-
                                                   Komotini 2001#11) Klavanidou Despina,
                                                   Consumer Loans.Dogmatical Theory and
                                                   practical issues, Thessaloniki 1997#12) Lelentzi
                                                   how the legal system in Ireland treats
                                                   consumer debt etc – (unpublished, due to be
                                                   published in May 2003) – Free Legal Advice
                                                   Centres, 2003

                                                   etc are available electronically through
                                                   www.mabs.ie – the MABS web-site

                                                   MABS National Conference report, March 2000
                                                   (Department of Social and Family Affairs)

                                                   National Conference report, March 2002
                                                   (Department of Social and Family Affairs)

                                                   published by Comhairle (available online @
                                                   www.mabs.ie)



                                                   Community in the Greater Dublin Area‟ - Quinn
                                                   & McCann, 1997

                                                   for Housing Debt, Threshold 1996

                                                   Financial Services‟ Credit and Debt Policy
                                                   Group, 1996

                                                   (Combat Poverty Agency) - Daly M. & Walsh J.
#http:// You can find almost all rules cited in this   You can see:#1) G. Alpa, Credito al consumo,
paper (but many texts are in attachment anyway)        in Digesto civ., V, Torino, Utet, 1989, p. 22;#2)
in this website: www.gazzette.comune.jesi.an.it.       G. Ferrando, Credito al consumo: operazione
Excerpts of italian civil code (almost all rules       economia unitaria e pluralità di contratti, in
cited in this work) are also in attachment.#           Rivista del diritto commerciale, 1991, I, p.
                                                       591;#3) M. Gorgoni, Credito al consumo e
                                                       leasing traslativo al consumo, in Rivista
                                                       trimestrale di diritto e procedura civile, 1992, p.
                                                       1123;#4) R. Pardolesi- N. Squillace, Disciplina
                                                       del credito al consumo, Milano, Giuffré,
                                                       1993;#5) A. Dolmetta, Due quesiti
                                                       sull'individuazione della disciplina regolatrice
                                                       delle operazioni di credito al consumo, in Banca
                                                       borsa e titoli di credito, 1993, I, p. 156;#6) G.
                                                       Alpa, L'attuazione della direttiva sul credito al
                                                       consumo, in Contratto e impresa, 1994, p.
                                                       6;#7) G. Roddi, Il contratto di credito al
                                                       consumo, in Società e diritto, 1994, p. 396;#8)
                                                       M. Gorgoni, Il credito al consumo, Milano,
                                                       Giuffrè, 1994;#9) G. Ferrando, Contratti
                                                       collegati: il caso del credito al consumo, in
                                                       Nuova giurisprudenza civile commentata, 1995,
                                                       I, p. 305;#10) P. Gaggero, Diritto comunitario
                                                       e disposizioni interne in materia di credito al
                                                       consumo, in Contratto e impresa, 1996, p.
                                                       622;#11) P. Sirena, I contratti bancari di
                                                       credito al consumo, in Nuove leggi civili
                                                       commentate, 1997, p. 1110;#12) G. Carriero,
                                                       Il credito al consumo, Banca D'Italia, Quaderni
                                                       di ricerca giuridica, N. 48, 1998 (see in
There is an Internet site bringing together all the    1. Vademecum du surendettement - M. André
Luxembourg legislation:#http:// www.legilux.lu#or      THILL - Ligue luxembourgeoise de Prévention et
the internet site for the Chambre des Députés :        d'Action médico-sociales - 1996#2. Les saisies-
www.chd.lu#Most documents are annexed. #               arrêts et cessions spéciales - M. Thierry
                                                       HOSCHEIT - Editions Paul Bauler - 2000 ( book
                                                       of 291 pages )#3. La nouvelle loi sur le
                                                       surendettement - M. Michel NEYENS - Bulletin
                                                       luxembourgeois des questions sociales - volume
                                                       9 - 2001 and volume 11-2002#
   #http://. #wetten.sdu.nl/cgi-                   see attachement question 2.#
bin/login/anonymous/#




In Portugal, you have to pay to access the site of We are enclosing a list of the relevant literature.
official legislation - called Diário da República. It
is only available in Portuguese. The address
is:#http:// www.dr.incm.pt#
Documents to be sent by electronic mail and in       There are very few legal articles regarding
Spanish#http:// #                                    overindebtedness; and as opposed to the legal
                                                     aspects, it is the economic aspect that is
                                                     emphasised. Besides, they do not exist as
                                                     separate publications, but are normally inserted
                                                     in legal magazines, with the result that there is
                                                     no bibliographic listing. The catalogues have
                                                     been accepted by the libraries of some Law
                                                     Faculties but with negative results. #The only
                                                     specific reference that we know of is:
                                                     «Consumer overindebtedness in the Financial
                                                     Services sector». Consumer Affairs Council
                                                     (Consejo de Consumidores y Usuarios),
                                                     diciembre de 2001. C/ Príncipe de Vergara, 54.
                                                     28006 Madrid. #




www.riksdagen.se#http:// Click "Rixlex", full text   The relevant literature in this field is:
of the statutes. Of the above statutes, the Enlish   #1.Household debts SOU 1988:55)#2.
translation of the Enforcement Act                   Adjustment of Debts Act (SOU 1990:74)#3
(utsökningsbalken) can be found in Ds 2002:45.       Business Reconstruction Act (SOU
See also www.fritzes.se. #                           1992:113)#4. Proposal 1991/92:83 for a new
                                                     consumer credit act #5. Proposal 1993/94:123
                                                     for an adjsutment of debts act #6. Proposal
                                                     1995/96 for a business recosntruction act #7.
                                                     Proposal 1996/97:166, review of adjustment of
                                                     debts#8. Parliamentary report 1987/87:LU12,
                                                     adjustment of debts etc.#9. Parliamentary
                                                     report 1991/92:LU28, new consumer credit
                                                     legislation#10. Parliamentary report
                                                     1992/93:LU49, adjustment of debts#11.
                                                     Parliamentary report 1993/94:LU26,
                                                     adjustment of debts act#12. Parliamentary
                                                     report 1995/96:LU11, act on business
                                                     reconstruction etc#13. Parliamentary report
                                                     1997/98:LU1, review of adjustment of
                                                     debts##Commentaries etc#1.(adjustment of
                                                     debts)#2. (consumer credit)
                                                     #Articles###Other material
                                                   3                                             4
-#Are there any research studies, reports or            Which department of your government is
evaluations of the above mentioned fields of            primarily in charge of consumer
law within the last 5 years?#                           overindebtedness?#




yes#"Excluded from the debt adjustment procedure", AK   Federal Minstry of Justice
Wien/ASB 1998#Please provide a copy or
indicate where the material is
available:#see enclosed AK_ASB_Studie 1998.pdf#
yes#CRIOC (Centre de Recherche et d'Information des            Service Public Fédéral des Affaires Economiques
Organisations de Consommateurs) has carried out an
evaluation of the Law of 12 June 1991 in relation to
consumer credit (CRIOC, Rapport final de synthèse - La loi
du 12 juin 1991 relative au crédit à la consommation : un
premier bilan, Brussels, 1996). #This evaluation formed the
basis for the reform which was passed recently (Bill
amending the Law of 12 June 1991 in relation to consumer
credit, Documents parlementaires, Chambre, 2002, doc.
n° 1730/8).#In 2000, the Observatoire du Crédit et de
l'Endettement carried out an evaluation of the Law of 5 July
1998 on collective debt settlement. #Please provide
a copy or indicate where the material is
available:#CRIOC, Rue des Chevaliers, 18 - B 1050
Brussels#http://www.oivo-crioc.be#OBSERVATOIRE DU
CREDIT ET DE L'ENDETTEMENT, Château de Cartier,
Place Albert Ier, 38 - B 6030 Marchienne-au-
Pont#http://www.observatoire-credit.be#




No#To my knowledge no report etc has been                      The Ministry of Justice (Justitsministeriet ) is
published within the last 5 years. However, just a             administering both the Bankruptcy Act and the
few days ago (mid April 2003) a newspaper reported             Consumer Credit Agreement Act. The practical work
that an accountant had studied cases from selected             (consumer advice, information etc) is dealt with by
different bankruptcy courts. The study was said to             the Consumer Protection Agency
reveal rather big local differences concerning the             (Forbrugerstyrelsen ) and the Consumer Ombudsman
success rate of applicants for gældssanering (Debt             (Forbrugerombudsmanden )
Adjustment). #
Please provide a copy or indicate where the material
is available:I have not seen the ma+E11terial refered
to in the recent newspaper articles mentioned
above#
yes#                                                          Ministry of Justice
HE 183/1992#
HE 180/1996#
HE 98/2002#
Oikeuspoliittisen tutkimuslaitoksen raportit:#
143/1997 Koskinen, Seppo - Muttilainen, Vesa -
Perheentupa, Ilkka - Tala, Jyrki: Velkajärjestely ja
yritysvvelat hovioikeuskäytännössä#
43/1999 Sunila, Mirjami: Kuka karsiutuu velkajärjestelystä#
198/2003 Muttilainen, Vesa - Valkama, Elisa:
Velkajärjestelyn jälkeen#
Please provide a copy or indicate where
the material is available:#Library of Parliament,
Helsinki#
yes#Surendettement, enquête typologique, Banque de Francis Mer, Minister of Finance and the
France,February 2002#Please provide a copy or Economy
indicate where the material is
available:#site: #ww.banque-
france.fr/fr/publi/telechar/19.htm#
yes#1. Consumer Credit#- iff, Consumer Lending and          A matter within the competence of the Federal
Overindebtedness among German Households, Expert report Ministry for Family, Seniors, Women and Youth
on the instructions of the DG XXIV of the European          is prevention of poverty.#The Federal Ministry
Commission, Hamburg 1998#- iff, Harmonisation of Cost       of Justice has the legislative jurisdiction.#
Elements of the Annual Percentage Rate of Charge,
European Project AO-2600/97/000169, Hamburg 1998#2.
Consumer Bankruptcy#- iff, Treuhandphase und
Wirksamkeit von Lohnabtretungen, Research study on behalf
of the Federal Ministry of Justice, Hamburg 2001#- iff, Das
Verbraucherinsolvenzverfahren: Anforderungen an ein
interessenwahrendes, sozialverträgliches Konzept, Research
study on behalf of the "Arbeitsgemeinschaft der
Verbraucherverbände e.V.", Hamburg 2000#-
iff/Verbraucherzentrale Hamburg/Schuldnerberatung
Salzburg/Money Advice Trust, Overindebtedness of
consumers in Europe: Are extra judicial proceedings the
solution?, European Project 97/C277/04, Hamburg 1999#-
Veit/Reifner, Außergerichtliches
Verbraucherinsolvenzverfahren (Editor: Federal Ministry of
Justice), Bundesanzeiger Publishers: Cologne 1998#3.
Overindebtedness, poverty#- Korczak, Überschuldung in
Deutschland zwischen 1988 und 1999 (Editor: Federal
Ministry for Family, Seniors, Women and Youth),
Kohlhammer Publishers: Stuttgart 2001, ISBN 3-17-017237-
9#- Lebenslagen in Deutschland, Erster Armuts- und
Reichstumsbericht der Bundesregierung, 2001#Please
provide a copy or indicate where the
material see Attachment Q3#Please provide a
yes#Please is available:#Lebenslagen in Deutschland, Depatment of Trade and industry,#Office of
copy or indicate where the material is                 Fair Trading
available:#http://www.dti.gov.uk/ccp/topics1/consumer_
finance.htm#ec##http://www.dti.gov.uk/ccp/topics1/overinde
btedness.htm#
yes#Unfortunately we have found only one done by the               The Ministry of Development, Sub-ministry of
Bank of Greece in 2002. This research has as follows :#It is a     Trade, General Secretariat of Trade, General
sampling survey relevant to the height of borrowing and to         Department of Consumer Protection.#There is,
the degree of indebtness of greek households. This research        unfortunately, no special department charged
took place from September 2002 till the end of January 2003        with consumer overindebtedness.
and aimed at bringing in light the most significant
economical and social aspects of greek household's
borrowing. According to the results of the research 1.146
out of 2.303 households which participated in the research
(that means 49,8%) stated that they have no debts arising
from any kind of loan. Differernces are to be noted among
the diferrent geographical regions of the country and among
diferrent level of income of the households. In semi-urban
areas the percentage of households which answered that they
have no debts due to loans rises up to 64,7%, while in Athens
the percentage is reduced to 42,5%. Moreover the higher
wages are, the higher is the level of borrowing of greek
households. Its also notworthy that the percentage of
households which have not concluded any credit contract
raises up to 64,9% in households with low income such as
15.000 euro, it is reduced to 37,6% in households of average
income from 15.000 -30.000 euro and it' s becoming lower to
households with an income of 30.000 euro and more.#As far
as the remaining percentage of 50 % of the indebted
households is concerned, it is estimated that each household
owes an average of 16.143 euros to banks. The most frequent
type of credit is credit cards, as half of the households, which
have debts, stated that they have borrowed money by means
of a credit card, meanwhile it has come out that each of the
                                                                   Government department(s) in charge of over-
legal system in Ireland treats consumer debt etc                   indebtedness##Though there is no particular
(unpublished, due to be published May 2003) – Free                 Department with specific responsibility for over
Legal Advice Centres, 2003                                         indebtedness, the following Departments are
                                                                   responsible for key areas that impact on the
Recovery’ – West/North West MABS Regions’                          issue of over-indebtedness: -##Justice,
submission to the Department of Justice, Equality and              Equality and Law Reform – Responsible for the
                                                                   administration of justice through the Courts
Law Reform on a proposed Attachment of Earnings
                                                                   Service and for both criminal and civil law
Bill, 1999
                                                                   reform##Finance - Responsible for overseeing
                                                                   the work of the Central Bank and its newly
                                                                   established offshoot, the Irish Financial Services
                                                                   Regulatory Authority, which is due to formally
                                                                   begin work in May 2003.##Enterprise, Trade
                                                                   and Employment - Responsible for
                                                                   implementing the consumer credit directives
                                                                   and oversees the work of the Office of the
                                                                   Director of Consumer Affairs, the office charged
                                                                   with general consumer
                                                                   protection.##Department of Social and Family
                                                                   Affairs - Sole funder of and responsible for the
                                                                   network of independent Money Advice and
                                                                   Budgeting Services (MABS)#* #
yes#See more Carriero (above), and in attachment; that's the Ministero delle attività produttive (before
most complete paper in this field, with scientific          named Ministero dell'Industria), in particular
character.#Please provide a copy or indicate               Direzione Generale per l'Armonizzazione del
where the material is available:##                          mercato e la tutela dei consumatori, and
                                                            Consiglio Nazionale dei consumatori e degli
                                                            utenti; they are organs of the Ministero. See for
                                                            more information www.minindustria.it




yes#La nouvelle loi sur le surendettement - M. Michel       Minsitère de la Famille, de la Solidarité Sociale
NEYENS - Bulletin luxembourgeois des questions sociales -   et de la Jeunesse - Service Solidarité
volume 9 - 2001 and volume 11-2002##Please
provide a copy or indicate where the
material is available:#The copy is annexed.##
yes# # Please provide a copy or indicate Ministry of Justice: legislation#Ministry of Social
where the material is available:#Jungman, N., affairs: for informal debt assisstance##
Niemeijer, E., ter Voert,M.J., Van schuld naar schone lei-
Evaluatie Wet Schuldsanering natuurlijke personen [From
debt to clean slate, Evaluation of the Dutch Consumer
Bankruptcy Act, Wetenschappelijk Onderzoeks- en
Documentatiecentrum,M Ministry of Justice, The Hague,
2001#




yes#For the above mentioned fields there are the studies we   It is the Assistant Minister of the Prime Minister
conducted at the Observatory on Consumer                      who is in charge of consumer issues. The
Overindebtedness.#In 2000 we published the book               Consumer Institute (Instituto do Consumidor) is
"Consumer overindebtedness" a copy of which we are            the government agency responsible for the
sending. #Other more recent studies can be consulted on our   application of consumer protection policy.
website at the following address. #Please provide a
copy or indicate where the material is
available:#http://www.oec.fe.uc.pt#
yes##Please provide a copy or indicate                     There is no organisation at government level
where the material is available:#-«Consumer                 (non judicial) that deals specifically with
overindebtedness in the Financial Services sector». Consejo problems arising from overindebtedness.
de Consumidores y Usuarios, diciembre de 2001. C/ Príncipe Generally, and always that the affected party is
de Vergara, 54. 28006 Madrid. #                             the consumer, (having asked for the loans to
                                                            meet his personal needs), government
                                                            responsibility lies with the institution normally
                                                            in charge, such as the Ministry of Health and
                                                            Consumer Affairs via the National Institute of
                                                            the Consumer to which he belongs
                                                            (nationwide), the autonomos consumer councils
                                                            (regional) and the Municipal Consumer
                                                            Information Offices (local); these last two, least
                                                            important in territory, most actively work to
                                                            protect the consumer in public institutions. In
                                                            the financial arena the Bank of Spain is
                                                            responsible for inspecting financial entities
                                                            reporting to it via its Commission for Client
                                                            Defence which deals with client complaints. In
                                                            the area of overindebtedness it can only check
                                                            on the code of professional conduct of the
                                                            financial entity.




yes#See item 2. Under "Other material" reviews and            Department of Justice
proposals for changes are listed. The material is available
from Parliament, State Tax Office and Consumer Agency. It
is unlikely to be in an electronic form, and is in Swedish
only. It may be added that the Government has appointed a
committee (Dir. 2002:139) to evaluate and to review the
Adjustment of Debts Act (1994:334). The brief expires on 31
Dec 2003. In this context, proposals may be made which
affect replies to this questionnaire. #Please
provide a copy or indicate where the
material is available:#See above.#
                                                5                                                  6
Does a general consumer protection law exist        Is consumer credit regulated under this general
in your country?                                    consumer protection law?




yes; Consumer Protection Law, amended               yes; #Partly, i.e. #§ 6 general inadmissible
several times, with regulations for contracts       parts in contracts with consumers, in particular
between entrepreneurs and consumers and             Z 13 prohibition of interest on arrears of more
federation complaints.#                             than 5% over agreed upon interest rates#§ 12
                                                    premature repayment for consumer credits#§
                                                    25 obligations of notification to spouses in credit
                                                    contracts#§ 25b, c credit commitments of
                                                    consumers and joint debtor liability#§ 25d
                                                    moderation rights for judges##
yes; #The Law of 14 July 1991 on commercial      yes; #Consumer credit is subject to the Law of
practices and consumer information and           14 July 1991, but the Law of 12 June 1991
protection applies to advertising, promotional   contains regulations which are stricter in many
measures, exploitative terms, distance sales,    respects.##
etc.##




no
yes; #Consumer Protection Act 38/1978 The          yes; #Chapter 7 in Consumer Protection Act
Consumer Protection Act applies, as the first      regulates consumer credits and Interest act
section says: to the offering, selling and other   regulates interest on arrears. #Chapter 7
marketing of consumer goods and services by        includes consumer credit that, by agreement, is
businesses to consumers. It applies also where     granted or promised to the consumer by a
a business acts as an intermediary in the          business in the form of a loan, deferred
transfer of goods or services to consumers.#       payment or another corresponding financial
                                                   arrangement.#Even credits granted for the
                                                   acquisition of a residence or for studies shall be
                                                   governed by the provisions of consumer
                                                   protection act unless otherwise stipulated in the
                                                   legislation pertaining to these types of
                                                   credit.#These provisions are applied to a lease
                                                   or hire or similar agreement on the basis of
                                                   which goods pass into the possession of a
                                                   consumer and under the terms of which the
                                                   cash price and the credit costs shall be paid
                                                   during the leasing period or the terms of which
                                                   otherwise indicate that the intent of the
                                                   agreement is to transfer the ownership of the
                                                   goods to the consumer, shall be deemed a
                                                   credit sale. #
no#The various laws are listed in the Code de la
Consommation#
no##




yes; #See Q1 above and Attachment Q1#   no
yes; #There is a general consumer protection           yes; #Provisions of the general consumer
law, Law 2251/94, as modified by art.10.               protection law partially apply also to consumer
par.24 of Law 2741/1999. In its major part, this       credit. In particular : #- art.2 of Law 2251/94
piece of law has implemented the community             on standard contract terms would apply to
directives, whereas some of its provisons have         standard terms in credit contracts.#-art.4 on
regulated issues of national (greek) interest.         distance contracts#-art.7 on the liability of the
The provisions of Law 2251/94 have as follows          service provider and#-art.8 on advertising.
:#Already, in its first provision the legislator       #Please note that the "extended" notion of
sets the background of this piece of law as            consurmer does not apply in consumer credit
being the protection of consumer interests. In         (see below under 7)#
the same provision the legislator defines the
persons that fall within its scope. The greek law
is in this context innovative : the definition of
"consumer" differs significantly from that of the
classical community definition of "every natural
person acting outside its business". The greek
legislator defines consumer in a much broader
way. According to the greek legislator
"consumer is every natural or legal person for
whom products and services offered in the
market are intended or who is the final
recipient of such products or services.
Consumer also means any addressee of an
advertising message".#b) Art.2 provides for the
general contract terms (notion, characteristics,
distinction between different stages of control,
i.e. in incorporation, interpretation and
content). Goods Act,1893, The Sale of Goods and
The Sale of#c) Art.3 provides for the contracts        No.
Supply of Services Act 1980 and The Consumer           However, note that Section 80 of the Consumer
Information Act 1978 regulate the provision of goods   Credit Act 1995 (which repealed S32 Sale of Goods
and services to consumers, whilst the Consumer         and Supply of Services Act 1980) provides that
Credit Act 1995 covers the provision of credit to      persons (for example credit institutions) involved in
consumers. Further details of these pieces of          arrangements to facilitate a purchase of goods on
legislation and others and how they relate             hire purchase shall be jointly and severally liable
specifically to consumer credit, are given in Item 1   with the owner for any breach or misrepresentations
above.                                                 made with regard to the agreement. Hence where
                                                       goods have been purchased by a consumer in such a
                                                       fashion and these turn out to be faulty, s/he has the
                                                       right to look to either the owner or the credit
                                                       provider for suitable redress (such as a
                                                       refund/replacement/repair) depending on what is
                                                       reasonable in the circumstances.

                                                       Note also S.14 of the Sale of Goods and Supply of
                                                       Services Act 1980, the effect of which is to make
                                                       finance houses jointly and severally liable with the
                                                       seller in respect of personal loans, where there is a
                                                       breach of contract or misrepresentation.
yes; #See l. 30 luglio 1998, n. 281 (in               no
attachment, modified by d. lgs. 23 aprile 2001,
n. 224, in attachment): under this law,
consumers fundamental rights are recognized;
in particular right to health, safety, quality of
products, information, education as consumer;
law recognizes consumers associations (as
included in the list of article 5), that have right
to sue against producers on behalf of
consumers; law also provides tax facilities and
founds Consiglio nazionale dei consumatori e
degli utenti (see above, no 4), that provides
counselling for the Governement and the
Parliament; it should stimulate consumers
access to Justice.#




yes; #There is a Law dated 25.08.1983 in              no
relation to legal protection of the consumer,
subsequently amended by the Law of
26.03.1997 and that of 27.11.2000. These
Laws are annexed.#
no                                        no




yes; #Law n. 24/96, of 31-7-1996 is the   no
Consumer Protection Law.#
                                   th
yes; #Spain has Law 26/1984, 19        July, for the   yes; #Yes, but only partially.; as
general protection of the Consumers and Users.         aforementioned we are dealing with a general
It is legally binding and was hastily passed           and formalized law, resulting that some areas
following a poisoning epedemic in the early            of this law affect financial services one way or
80´s caused by adulterated oil. Besides being          another. We can highlight the followin: 1) Rules
hastily passed it is characterized as a general        on advertising, included in article 8. 2)
text, too formal and not very specific. Since          Standards on general conditions and abusive
being passed in 1984 the Autonomous Regions            clauses, mentioned in articles 10, 10 bis and
have been steadily taking on more                      additional first order; among them,we can
responsibility regarding consumer protection,          highlight the second clause (refering to possible
with the result that the actual situation is one of    modification of interest rates by altering the
exclusive responsibilities corresponding to the        original index, or the actual contract if it has no
State (schematically and simplified), civil            expiry date, number 18 (regarding the non
aspects, mercantile, procedures between                existence of the guarantees asked for in the
private parties. And to the Autonomous                 financial contracts), number 22 (about the non
Communities everything related to regional             obligation of the property purchaser to assume
policies and other government functions (plans,        the financial costs of its construction), number
inspections and sanctions, etc.) within each           24 (prohibits the charging of non solicitated
territory. The details of responsibilities can be      financial services), and number 29 (dealing with
studied in more detail in articles 39 and 41 of        the maximum interests applicable to current
the Law 26/1984. Few of the articles of this           account overdrafts), all of these from the
Law can be effecively applied, only those              aforementioned first additional order. There is
dealing with civil and legal aspects. #                also a brief mention in article 13.1.d, regarding
                                                       the right of information in the hands of the
                                                       consumer, in this case to be sure that he will
                                                       know in detail the price of the product or
no#There are five consumer protection laws             yes; #See item 5#
which cover different aspects of consumer
protection under civil law:#Consumer
Purchases Act (1990:932)#Act on Consumer
Protection in Distance Contracts and Door-to-
Door Sales Contracts (2000:274) #Consumer
Services Act (1985:716)#Consumer Credits Act
(1992:830)#Consumer Insurance Act
(1980:38) #In addition, other statutes (laws
and decrees) contain provisions aimed at
consumer protection. In property law, there is a
general provision in section 36 of the contracts
act (avtalslagen, 1915:218) to the effect that
unreasonable contracts may be adjusted. This
provision is especially directed at consumer
contracts.#There is also a law (1994:1512)
regulating terms of contract in consumer
relations, which is in the nature of marketing
legislation. The Consumer Agency can invoke
this law to intervene in the marketing of credits
etc.     ##
                                           7                                                 8
Is consumer credit regulated under a special    Are there maximum interest rates in credit
law?                                            contracts?


                                                Present average Interesst rates?




yes; #Bankwesengesetz (Banking Law),           no#There is a Usury Law in Austria (see
regulations for consumer credit agreements and question 26, enclosed Wuchergesetz.pdf), the
consumer current account contracts in §§ the   Austrian justice however is extremely reserved
33 ff.#                                        concerning usury credit interests, so there´s no
                                               relevant iurisdiction to usury interests.#



                                                approx. 6,5% in accordance with a price
                                                comparison of the Arbeiterkammer OÖ in March
                                                03 (see enclosed Kreditvergleich März03
                                                PKW.pdf)#
yes; #Consumer credit is regulated by the Law            There is no official data about the average intrest
of 12 June 1991, as amended on a number of               rate on the market.
occasions. A number of aspects of this Law               The consumer magazine Budget & Droits publishes
                                                         every 2 months the best
have just been amended by Parliament (Bill
                                                         rates of the market for some consumer credit. For
amending the Law of 12 June 1991 in relation             instance :
to consumer credit, Documents Parlementaires,            - the "best buy" for a loan of 10.000 euros was in
Chambre, 2002, doc. n° 1730/8). The new Law              April a TEG of 7 % but
has not yet been published in the Moniteur               the cheapest big bank proposed a rate around 9 % ;
belge. Part will come into force on 1/6/03 and           for a bad risk, the rate
part on 1/1/04.#                                         would be 15,50 % (maximum rate legally
                                                         authorised) and the market is spread
                                                         between those different rates.
                                                         - if the loan is used to buy a new car, it is possible to
                                                         find the same loan
                                                         at 4,65 %.
                                                         - revolving credit associated to credit cards are
                                                         usually close to the
                                                         maximum rate legally authorised : 16 % including
                                                         the cost of the card.




yes; #The Consumer Credit Agreements Act                 no#
(Kreditaftaleloven ), which implements the Consumer
Credit Directive. contains detailed rules on
precontractual financial information, on credit sales,
repossession etc) protecting the consumer debtor.
no   no#   #
yes; #laws of 10.1.1978 and 13.7.1979             yes; #There are several different rates, depending on
(articles L.311-1 to L.313-15 of the Code de la   the loan, see "indices economiques", (repères
Consommation#                                     financiers) on Internet site INC
                                                  :www.inc60.fr#Please note, the rate is the taux
                                                  effectif global - global effective rate, which integrates
                                                  all of the fees associated with the loan
                                                  (administration of the account, agent's fee,
                                                  insurance, security) #
yes; #1. Current legal position#Consumer          no#No interest rate thresholds are set by
credit law was revised by the legislation         legislation. It applies the principle of contractual
modernising the Law of Obligations, introduced    freedom. An effective system of control has,
on 26 November 2001 (BGBl. I 3138) in §§ 491-     however, been developed in the courts through
505 of the Bürgerliches Gesetzbuch (BGB -         use of the German Civil Code, particularly §
German Civil Code), and this applies to all       138, para.2 (usury limit). (Please see answer to
credit agreements concluded since 1 January       question 13.)#
2002. Credit agreements concluded previously
are governed by the version of the                10,36 % p.A. (April 2003)
Verbraucherkreditgesetz (Consumer Credit Act)
introduced on 29 June 2000 (BGBl. I 940).#§§
491-505 BGB distinguish between: #-
Consumer loan agreements (§§ 491-498
BGB);#- Assistance with finance provided by a
company to a consumer (for example deferred
payment) (§§ 499-504 BGB);#- Agreements
for payment by instalments between a company
and a consumer (§ 505 BGB).#In addition to
the Verbraucherkreditgesetz, the BGB also
includes other legislation, among which are the
Act governing withdrawal from door-to-door
sales agreements, the Haustürwiderrufsgesetz
(§§ 312, 312a BGB), the Act governing distance
sales, the Fernabsatzgesetz (§§ 312b-312d
BGB) and the Act regulating General Terms and
Conditions, the Gesetz zur Regelung des Rechts
der Allgemeinen Geschäftsbedingungen
yes; #Consumer Credit Act 1974#                   no#The rate of interest in a regulated consumer
                                                  credit agreement is subject to judicial
                                                  interpretation of an 'extortionate credit bargain'
                                                  in accordance with consumer credit protection
                                                  legislation#See Attachment Q8#
yes; #EU Directives 87/102/EEC and 90/88/EEC no#Greece has abandoned the system of
have been implemented into Greek Law with           setting limits by administrative provisions since
the F1 983/1991 Joint Decision of Ministers of      1989. Hence bank interest rates are free. #The
Finance, Justice and Trade (published in Official   Governor of the Bank of Greece who is
Journal B 172/21.3.1991), as later modified by      authorized to regulate bank issues, has
Joint Decision F1 5353/1994. This Joint Decision    restricted himself to regulate #a) only “non-
(hereinafter referred as JD) has adopted the        banking” interest rates, i.e. interest rates of
provisions of the Directives almost as such. As     credit granted under a contract not related to a
the EU Directive provisions, the provisions of      bank (authority granted to the Governor of the
the JD are set in two distinctive parts.            Bank of Greece by Law 876/79 art.15 par.5)
Provisions of the first part regulate the way       and #B) to regulate the maximum default
credit agreements are made and the content of       interest rate, which can be set by the banks at
such agreements. Provisions of the second part      a maximum percentage of 2,5% per year on
define the consumers‟ rights and obligations vis-   top of the interest rate which is agreed and
à-vis the creditor. In more detail : #- Article 1   included in the credit contract (Act of the
sets the scope of the JD, i.e. the                  Governor of the Bank of Greece
implementation of the community directives. #-      2393/15.7.1996). #According to the law
Art.2 refers to the basic definitions of the JD     authorizing the Governor of the Bank of Greece
(“consumer”, “creditor”, “credit agreement”,        to define the non-banking interest rates, such
“total cost of credit to the consumer” and          rates are defined after taking into account the
“annual percentage rate of charge”). #- Art.3       current financial, credit and currency conditions
–6 are devoted to the annual percentage rate        #It is important to note that the Greek
of charge. Art.3 contains the definition of Art.1   Supreme Court, judging on a collective action
of Dir 98/7/EC. Art.4 defines the elements to be    filed by E.K.PI.ZO consumers‟ association,
included when calculating the APRC. Art.5           decided and ruled that the “non-banking”
defines the time when the APRC is calculated.       maximum interest rates as set by the Acts of
Art.6 provides in detail the way APRC is            the President of the Bank of Greece are binding
calculated. #- Art.7 sets the forms of contracts
Regulation of Consumer credit##Yes. Consumer        also for the banks (Decision Nr 1219/2001). In
                                                    Maximum interest rates##No. There are no specific
Credit is regulated under a special law, the        maximum interest rates prescribed for credit
Consumer Credit Act 1995 (and associated            contracts. ##There is however a general provision in
regulations) – see point 1 above.##                 S.47 of the Consumer Credit Act 1995 that gives a
                                                    consumer or person acting on their behalf the right
                                                    to apply to the Circuit Court for a declaration that the
                                                    total cost of credit in the agreement is excessive. The
                                                    court is required to take various factors into account
                                                    e.g. creditor risk, prevailing interest rates, the
                                                    „profile‟ of the consumer, creditor costs (S.47). Note
                                                    that a specific exemption applies to credit institutions
                                                    such as banks and other prescribed lenders in
                                                    relation to this provision. ##In addition,
                                                    moneylenders (generally involved in doorstep
                                                    collected credit at high interest rates to consumers
                                                    with very limited credit options) must specify the
                                                    interest rates that they are proposing to charge in
                                                    their applications and, if successful, are bound by the
                                                    terms of their licence subsequently including the
                                                    interest rate. ##Finance houses (principally involved
                                                    in car finance) that are not credit institutions cannot
                                                    charge in excess of 23% APR without the agreement
                                                    becoming a moneylending agreement for which they
                                                    would require a licence.##Finally, there is a common
                                                    law (i.e. judge made) rule against extortionate credit
                                                    bargains but this is very rarely invoked.##
yes; #See D. lgs. n. 385/1993 (T.U. banc.), in         yes; #Under l. 108/1996 (in attachment),
attachment, artt. 121 ss., which have                  interest rates are usuraries when they exceed
introduced in italian law UE directive 87/102;         midium rates on the market, increased for the
art. 1469bis, par. 5, civil code (in attachment);      half (ex: medium rate 6, usurary rate 9);
rules about usury (l. 7 marzo 1996, n. 108, in         Ministero dell'Economia (before Ministero del
attachment); on this subject see next number.#         Tesoro) collects every three months interest
                                                       rates on the market, and make publication of
                                                       the midium. Only usurary interests rate
                                                       inclosed in contracts made after 1996 are void
                                                       (see l. 28.2.2001, n. 24, in
                                                       attachment).#Under Art. 1284 civil code,
                                                       clauses on interest rates which exceed legal
                                                       rate (now 3%) have to be written (otherwise,
                                                       they are void).#Every clause in bank and
                                                       financial contracts that refers to customs is void
                                                       (artt. 117 par. 6, 124 par. 4 T.U. banc., in
                                                       attachment).#




yes; #The Law of 9 August 1993 regulating              no#The former Grand-Ducal Regulation of 14
consumer credit and the Grand-Ducal                    October 1963 with regard to setting the
Regulation of 15 November 2000 determine the           maximum interest rate in relation to certain
calculation of a fair reduction in the total cost of   forms of credit was repealed by the Law of 9
credit, applying the Law referred to above, all        August 1993 regulating consumer credit.##
of which are annexed.# #

                                                       The maximum interest rates applicable to
                                                       consumer credit is not fixed by law but is
                                                       currently between 6% and 7% a year
yes; #Wet op het Consumentenkrediet#              yes; #Article 35 Wet op het consumentenkrediet and
                                                  Besluit Kredietvergoeding regulate this matter.




yes; #Consumer credit is regulated by Decree-     no#In our Civil Code there is a norm on legal
Law n. 359/91, of 21-9-1991. Mortgage credit      interest rate (art. 559º). There are also two
is regulated by Decree-Law n. 349/98, of 11-11-   norms on usury (art. 1146) and usurary rates
1998 (modified by Decree-Laws n. 137-B/99, of     (art. 559-A), which identify as usury annual
22-4-1999, 1-A/2000, of 22-1-2000 and             interest rates exceeding legal rates by 3% or
320/2000, of 15-12-2000).#                        5%, depending on whether or not the loan
                                                  contract involves security. These provisions are
                                                  virtually not applied in practice. #As regards
                                                  mortgage credit, art. 7 of Decree-Law n.
                                                  349/98, of 11-11-1998 (and its updates) lays
                                                  down that the contractual interest rate is
                                                  negotiated freely between the parties. #



                                                  3 - Mortgage credit has lower interest rates:
                                                  euribor+ 1/2,5%). Consumer
                                                  credit has higher interest rates. According to
                                                  the Bank of Portugal, the
                                                  average of the interest rate for consumers'
                                                  credit in December 2002 was:
                                                  mortgage credit 5,1%, consumer credit 9% (
                                                  total average 7,3%)
yes; #Spain has embodied in it´s internal legal    no#We cannot say that maximum levels for
system the Directive 87/102/CEE of the             interest rates exist. Nevertheless, there are
                  nd
Council, dated 22 December 1986, dealing           some regulations which limit the abusive
with bringing closer together legal procedures,    behaviour of financial institutions: #-Law to
regulations and administrative procedures of       supress Profiteering: declares null and void
the member states in the area of consumer          contracts for loans which manifestily charge
credit, in the same way when same was              exorbitant interest rates, or which have unfair
modified in 1990. This transposition was           conditions, where it is thought that loans have
brought into effect by Law 7/1995, 23rd March,     been accepted by the borrower due to
on Consumer Credit.#                               distressing circumstances, naivety or mental
                                                   deficiency. To be evaluated, one has to abide
                                                   to the circumstances of each case and at the
                                                   moment that the loan is taken out.#-Consumer
                                                   Credit Law: also does not state the maximum
                                                   permitted rate of interest; it simply obliges that
                                                   the equivalent annual rate is included in the
                                                   contract (expressed as a percentage of the total
                                                   cost of the loan, known in Spain as TAE), and if
                                                   not mentioned the penalty is the application of
                                                   the legal interest (a rate that for certain legal
                                                   reasons is published annually in the Laws of
                                                   State Budgets; for 2003 it is 4.25%). #-This
                                                   Consumer Credit Law only sets an interest rate
                                                   for a certain residual type of loan, current
                                                   account overdraft (written or unwritten, but not
                                                   linked to bank credit cards), whose TAE cannot
yes; #See item 5. Also, with respcet to the        no#There are no fixed maximum interest rates,
Consumer Credit Act, (Konsumentkreditlagen)        but there are sanctions on usury which preclude
both the Consumer Agency and the Financial         very high interest rates. For interest rate to be
Inspection Agency provide general advice, an       determined as usury, however, it must be
activity of major importance to the application    extremely high. The Consumer Credit Act
of the Act. In a number of cases, the Supreme      (sections 10 to 13) contains provisions on
Court, for example, has cited this advice as       information on interest rates, settlement of
decisive in its rulings on good credit extension   issues arising from the adjustment of interest
prctices under section 5 of the Consumer Credit    rates etc. #
Act. Such general advice is available from the
authorities in question. #
                                          9                                             10
What is the present maximum interest rate for   What is the present maximum interest rate for
consumer credit?#                               mortgage loans?#




                                                approx. 6% in accordance with a price
                                                comparison of the Arbeiterkammer OÖ in March
                                                03 (see enclosed Kreditvergleich März03
                                                Wohnung.pdf)#
Maximum authorised rates are set for consumer There is no maximum rate for mortgages.##
credit by royal decree as a function of changes
in the market.

Maximum rates vary according to the type of
credit, the amount and the term. #The
maximum TAEG authorised by law is currently
set at 25.5%; it applies to instalment loan
agreements for less than 500 euros repayable
over a maximum of 12 months.#The lowest
authorised maximum TAEG is currently set at
11%; it applies to hire purchase agreements for
more than 10,000 euros repayable over more
than 48 months.#For more information, see the
SPF Economie site
(http://www.mineco.fgov.be)#




#                                                 ##
There is not maximum interest rate for         There is´nt maximum interest rate for mortage
consument credits, but usury is forbidden by   loans.#
Penal Code 36:6#
At the 1st quarter of 2003 :#- 22.08% for     At the 1st quarter of 2003 :#- 7.93% for fixed
loans of less than or equal to 1524 euros#-   rate loans#- 7.39% variable rate loans#-
17.64% for overdrafts, permanent credit and   7.96% for bridging loans ##
loans of more than 1524 euros#-10.80% for
personal loans of more than 1524 euros#
See answer to question 8.#          See answer to question 8.#




No maximum, see Attachment Q8. ##   None, see Attachment Q8#
There is no maximum interest rate set for      There is no maximum interest rate for
consumer credit. #Maximum interest rate for    mortgage loans (see above under 8 and 9)#
"non-banking" credit is currently defined at
8,75%. #




Item 9 - Maximum interest rates – Consumer     Maximum interest rates – Mortgage
credit##Not applicable – see point 8.##        loans##Not applicable – see point 8. Mortgage
                                               interest rates are market driven according to
                                               the institutions. A list of current variable/fixed
                                               rates can be supplied if required.##
15,81% for credit to natural person and family   8,055%.#
provided by banks.#See the Banca d'Italia
notice, 20 december 2001, in attachment, for
others transactions concerning consumers.##




The maximum interest rates applicable to         The mortgage interest rate is not fixed by law
consumer credit is not fixed by law but is       but is currently between 4% and 5% a year.##
currently between 6% and 7% a year.##
#                                              there is none#

Left: credit-sum in euro
Right: maximum allowed effective annual rate
(01-01-2000)
0 tot 2 500                   29,1#
2 500 tot 5 000                23,0#
5 000 tot 10 000              19,3#
10 000 tot 15 000              17,8#
15 000 tot 20 000              17,3#
20 000 tot 30 000               16,9#
30 000 t/m 50 000               16,5 #




#                                              #
Consumer loans in Spain can be caracterized in     As with the previous point, there is no legal
general as being of moderate amounts (up to        imperative to impose a maximum rate when it
25,000 euros for example), which only require      comes to mortgage interests. Limits exisit
the personal guarantee of the borrower.            regarding the way in which interest rates are
Occasionally, due to limited guarantee that the    calculated, in such a way that it is always
borrower can offer, a guarantor may be             intended that, being variable, the same
requested or a mortgage taken out on a             reference is objective and is not in the hands of
property. The Consumer Credit Law can only be      the financial institutions. At present, and
partially applied in this latter case. These       bearing in mind the very high house prices in
consumer credits are used to purchase from         Spain (1998-2002 saw an increase of 74%),
furniture or         electrodomestic goods to      the payback time for this type of loan has
cars (to mention the most frequent items)          almost doubled to 30 years; meaning that fixed
##Interest rates can vary tremendously             rate mortgages for home buying hardly exist;
depending on the financial institution with a      and with variable rates the most common
range of between 7 to 12%, depending on the        reference is the Euribor; the competition
liquidity of the borrower, the amount and use of   between one financial institution and another is
the capital, payback period etc. One must add      defined by the differencial that is applied (%
on this type of interest the commissions           added to the reference index), and which varied
charged, normally for preparation, opening and     between 0.4 and 1.5%).#
modification/cancellation. #




See item 8.#                                       See item 8.#
                                        11                                                 12
What is the present maximum interest rate for    Who determines this (these) interest rate(s)?
small business credit?#




approx. 6% as per telephone information of the   The credit interests are subject to the free
Wirtschaftskammer OÖ on March 24th 2003.#        contract design between entrepreneurs and
                                                 consumers and are regulated by supply and
                                                 demand on the market.#
There is no maximum rate for business loans.#   The Ministre de l'Economie.#




#                                               #
There is´nt maximum interest rate for small   Sad to say but nobody.#
business credit.#
At the 1st quarter of 2003 :#- 9.71% for issued   The Banque de France determines these rates
loans#- 7.52% for loans at variable rates of      on the basis of a quarterly review of rates
interest for a term of more than 2 years #-       applied by credit institutions. The maximum
8.19% for loans at a fixed rate for a term of     rate (usury rate) is equal to the average rate
more than 2 years#-11.79% for overdrafts#-        applied plus 33.33%.#
10% for other loans for a term of less than 2
years##
See answer to question 8.#   The banks determine the interest rates, but see
                             answer to question 8.#




None, see Attachment Q8#     n/a, but see Attachment Q8#
There is no maximum interest rates for small   Until 1989 bank interest rates were being
business credit (see above under 8 and 9). #   determined by administrative acts of the
                                               Governor of the Bank of Greece, issued after
                                               authorization by the law. These administrative
                                               acts were defining the interest rates-mostly of
                                               deposit and of credit- either on a minimum
                                               basis or a maximum basis. In the process of
                                               liberalization of the functioning of the credit
                                               market, bank interest rates were also
                                               liberalized. As far as consumer credit is
                                               concerned in particular, Act Nr 2286/1994 of
                                               the Governor of the Bank of Greece provided
                                               that interest rates are free. As already referred
                                               in answer to question 7, today only bank
                                               default interest rates ceilings are being
                                               regulated by the President of the Bank of
                                               Greece.      #




Maximum interest rates – Small business        Maximum interest rates##Generally not
##Not applicable – see point 8.##              applicable – see point 8.##However, there are
                                               specific instances where interest rates have
                                               effectively to be approved in advance or are
                                               otherwise regulated. ##(i) Moneylenders have
                                               to supply details of their proposed interest rates
                                               to the Office of the Director of Consumer Affairs
                                               before a licence is issued (See point 8). A
                                               moneylending agreement is defined as a credit
                                               agreement where, among other criteria, the
                                               total cost of credit to the consumer is in excess
                                               of 23% APR (s2).##(ii) Credit Unions (who are
                                               exempt from the provisions of the Consumer
                                               Credit Act) are prohibited by the Credit Union
                                               Act 1997 from charging in excess of 1% simple
                                               interest per month on outstanding balances
                                               (The Registrar for Friendly Societies is the
                                               regulatory authority in this regard)####
Under anti-usury law, there's no difference      Ministero dell'Economia (before Ministero del
between big and small business credit; see       Tesoro), after advice of Banca d'Italia, under
Banca d'Italia notice in attachment for the      art. 2 l. n. 108/1996#
maximum rates for every kind of transaction in
this field.#




5.5% to 6%#                                      The market and the economic environment
                                                 determine interest rates. ##
?#   The law (Besluit kredietvergoeding) deterimes
     that the maximum interestes rates fluctuates
     with the general interest rates. It is not a
     political decision.#




#    #
As our activity is centred exclusively around      With fixed interest rate(s) it is the parties
consumer affairs (where the consumer is the        involved in the loan contract itself who
end user of the good or service and for personal   determine the rate(s).##With variable rates we
usage), we do not have any detail of interest      have to distinguish between personal loans and
rates at a business level. Nevertheless, it is     mortgages. ##Loosely, the Civil code
sure that repayment periods are much shorter ,     establishes that, <<The validity and fulfillment
rarely exceeding 10 years.#                        of the contracts cannot be left to the discretion
                                                   of one of the contracting parties>> (art.1256);
                                                   and in the case of contracts of sale, whose
                                                   regulation can be similar to other legal
                                                   procedures, specifies that<<The price
                                                   settlement will never be left to the discretion of
                                                   one of the contracting parties>> (art.1449).
                                                   From this one can assume that decision making
                                                   on stipulating rates of variable interest should
                                                   not be left to the financial institution. ##More
                                                   specifically, article 8 of Law 7/1995 of March 23
                                                   (Consumer Credit), dealing with Personal
                                                   Loans. refers to the possibility of stipulating a
                                                   variable rate of interest. For interest rates to be
                                                   allowed to increase this possibility has to be
                                                   mentioned in the contract and the amount has
                                                   to be settled objectively bearing in mind that
                                                   the rates can go up as well as down. The
                                                   contractural agreement will determine; (1) the
                                                   rights of the parties; (2) the procedure for
See item 8.#                                       See item 8. Also, the Act on Interest Rates
                                                   (räntelagen, 1975:635) provides for restrictions
                                                   on the penalty interest for delayed payments in
                                                   case the parties do not have a contract on the
                                                   interest rate. In such cases, a penalty interest
                                                   may be exacted starting a month from the date
                                                   of the due payment. The default interest rate
                                                   may not exeed a rate determined by the State
                                                   added with 8 percentage points. Nevertheless,
                                                   this does not prevent the parties from agreeing
                                                   on a higher penalty.#
                                          13                                              14
What are the consequences if the credit        Which cost elements have to be disclosed?
contract proves a higher interest rate?




#None.#Only if an Interest Indexation Clause   #The consumer credit agreement has to contain
was agreed upon. In that case there exists a   at least the following cost data in accordance
claim for restitution for the consumers, if    with § 33 Banking Law (see enclosed
interest rate lowerings were not bound to an   Bankwesengesetz.pdf):
objective yardstick and were not passed on.#   a) Credit costs of - payments of public charges
                                               and #- payments of insurance or collateral, as
                                               far as they secure the repayment of an amount
                                               that exceeds the total amount of the credit for
                                               the credit institute in case of death,
                                               disablement, illness or unemployment of the
                                               consumer and this payment is not compellingly
                                               a condition for the granting of the credit by the
                                               credit institute. #b) Credit costs, which arise
                                               for the consumer through: #- default of his
                                               obligations, #- backpay transfer of the
                                               installments for the credit or account, if these
                                               costs are not higher than those for consumer
                                               current accounts.#
#Where the legal maximum rate has been           #For all consumer credit loans:#Any advertising
exceeded:#- the consumer does not have to        giving an interest rate or any other figure
pay any interest and retains the benefit of      relating to the cost of credit must give the
staggered payments;#- the lender is at risk of   TAEG (global effective annual interest
prosecution.#                                    rate).#The loan offer must state: the TAEG,
                                                 where necessary through a typical example in
                                                 cases and under conditions set by the King;
                                                 conditions for use and repayment of the
                                                 loan.#For sales by instalments:#All advertising
                                                 relating to the price of goods or services must
                                                 state the instalment price, the total instalment
                                                 price, amount of the deposit, the number,
                                                 frequency and the amount of payments.#An
                                                 instalment sale offer must include certain
                                                 specific information (the amount of the deposit,
                                                 the total cost of credit, the date of the first
                                                 payment…)#For instalment loans:#All
                                                 advertising for an instalment loan which refers
                                                 to a set amount or to a TAEG must state the
                                                 applicable TAEG, the duration of the agreement
                                                 and the amount to which the above conditions
                                                 apply.#The offer of a loan payable by
                                                 instalments must contain certain specific
                                                 information (the nominal amount of the loan,
                                                 the total cost of credit, the date of the first
                                                 payment...).#For leasing agreements:#All
                                                 advertising which relates to the price of goods
##                                               offered connected to the credit to be must state:
                                                 All costs under a leasing agreement paid by the
                                                 consumer must be disclosed except mainly #1)
                                                 costs in case of default, #2) costs connected with
                                                 money transfer, provided that the consumer is free
                                                 to choose between different, reasonable methods of
                                                 payment and the costs are not unusually high, #3)
                                                 costs of membership of a union/an association
                                                 according to another agreement than the credit
                                                 agreement even if the membership influences the
                                                 terms of the credit and #4) insurance/guarantee
                                                 costs unless the insurance/guarantee secures
                                                 payments under to the credit agreement. #Cf. The
                                                 Consumer Credit Agreements Act § 13.#
#In cases of usury a court can stop too high      #The payments, interest and other credit costs
rates, otherwise is there no consequense. As an   relating to the granting and use of the credit. If
example we can tell that consument credits        the agreement relates to a goods-or-services-
interest rates by over 26% seem not to be too     related credit even the credit price, any down
high.#                                            payment and the cash price. If the granting of
                                                  the credit is subject to taking out insurance on
                                                  the goods or services, the insurance and its
                                                  premium shall also be stated.#Even APR and
                                                  interest per year have to be disclosed.#
#The lender institution must repay any excess     #The contract must state the interest rate, the
ive interest collected. In addition there is a    total cost of credit, the various fees, the cost of
penalty of 2 years in prison and a fine of 45,000 insurance and the cost of security.##
euros.#
#Interest rates which exceed double the             #§ 4 of the German Consumer Credit Act
average of the market rate are against "good        (applying to contracts signed before 1 January,
morals" and such credit contracts are held to be    2002) or §§ 492, 502 of the German Civil Code
void.#The German Bundesbank monitors on a           (applying to contracts signed after 1 January,
monthly basis movements in interest rates for       2002) regulate the obligation to inform the
mortgages, instalment credit and overdrafts. It     borrower. The contract has to disclose the
also calculates and publishes averages in these     following information:#- net credit amount,#-
sectors. #In 1981, the courts introduced a          total amount of all instalments the borrower
complementary principle to the "double the          has to carry out due to redeem the credit and
average" criterion. In a period of high interest    to pay the interest and all other cost
rates, they were prepared to intervene in cases     elements,#- conditions of repayment or
where the interest rates charged were 12 %          termination of the contract,#- interest rate,#-
p.a. higher than the average prevailing level       cost elements like handling fee, commission,#-
(see for example jurisdiction of the Federal        (initial) annual percentage rate,#- insurance
Court of Justice: BGHZ, 110, 336). #The courts      premiums linked to credit contracts, especially
do not rely exclusively on quantitative criteria.   payment protection insurances
They are prepared to intervene in cases below       ("Restschuldversicherung"/residual debt),#-
the "double the average" level if contracts are     security of credit.#
thought to contain "oppressive" terms.#Apart
from § 138 of the German Civil Code, further
protection is afforded by § 817. Under this, if a
contract is found to offend against good morals
it is unenforceable and, effectively, the
borrower gets the credit free of interest and
other costs apart from insurance.#The banks
have tried to attack this jurisdiction, for
             splitting their credit price in such
example by wide discretion available to the a
#There is a                                     #Consumer Credit (Total Charge to Credit)
Courts to re-open the credit agreement (section Regulations 1980 requires certain matters to be
139 CCA 1974)#                                  inculded in the costs declared to the
                                                debtor.#See Attachment Q14#
#Both theory and jurisprudence accept that              #According to art.9 of Joint Decision F1-
when the interest rate has been defined by the          983/1991 consumer credit contracts are made
bank unfairly (abusively) high or when the such         in writing and the consumer receives one copy
interest rate is dispropotionally high considering      of the contract. In the contract the following
the market situation at the time in question,           elements should be included :#- the APRC#-
then the exceeding amount of interest is                the conditions under which the APRC may be
considered null and the consumer may refuse             amended#- the interest rate#- the amount and
to pay it, or if he/she has already paid, may           number of instalments as well as the dates on
issue proceedings in order to force the bank to         which they fall due regarding payment of credit
pay it back #                                           on one hand and payment of interest and other
                                                        related expenses on the other hand, as well as
                                                        the total amount of such instalments or the
                                                        method of ascertaining any of the same if
                                                        unknown at the time the agreement is
                                                        concluded.#- the cost elements that are not
                                                        included when calculating the APRC, and are
                                                        binding for the consumer under certain
                                                        circumstances, as well as detailed description of
                                                        such circumstances Such cost elements are :
                                                        #* a) charges on top of the price to be paid by
                                                        the consumer when purchasing goods or
                                                        services independent of whether the consumer
                                                        pays in cash or with credit, #* b) charges for
                                                        money transfer, as well as charges related to
                                                        the account in which money is deposited for
                                                        repayment of the credit, #* c) collection
                                                        charges, #* d)..#* e) insurance premiums or
Maximum interest rates##Again, generally not            security and 15 - Cost elements -
                                                        Items 14 charges.#- in cases where it is not
applicable – see point 8.##Under S.47 Consumer          disclosure##Advertising ##Advertisements offering
Credit Act, if it considers the cost to be excessive,   credit in relation to the acquisitions of goods or
the Circuit Court may re-open the agreement to do       services must in general state the nature of the
justice between the parties. It may for example: -      financial accommodation in question and the total
##(i) Relieve the consumer form payment of any          cost of the credit to the consumer. If mentioning a
sum in excess of the sum adjudged by the court to       rate of interest in a credit advert, it must be in the
be fairly due in respect of such total costs of         form of a clear and prominent statement of APR and
credit#(ii) Set aside, either wholly or partly, the     any other charges, any security required and any
agreement against the consumer#(iii) Revise or alter    restrictions must be outlined.##Credit
the terms of the agreement#(iv) Order the               agreements##-Costs and penalties to which the
repayment to the consumer of the whole or part of       consumer may become liable for any failure by the
any sums paid##In the case of moneylending              consumer to comply with the terms of the
agreements, the Court may also order the                agreement, must be disclosed in both the credit
revocation, suspension or alteration of the licence     agreement and any related contract of guarantee
and it would also be difficult to enforce the           (s30 – Consumer Credit Act 1995)##-A Notice as to
agreement against the consumer.##In relation to         how information regarding the cost of the credit must
finance houses, if an agreement charged over 23%        be presented to the consumer on the front page of a
APR it would become a moneylending agreement. If        credit agreement, is contained in the Third schedule
the finance house had no moneylending licence, this     to the Consumer Credit Act 1995##Moneylending
would constitute an offence and equally, the            agreements##Collection charges must be specified
agreement would be very difficult to enforce against    and the agreement must give the borrower the
the consumer.##                                         option of making payments at the lender‟s business
                                                        premises without such a charge. The borrower can
                                                        waive this right by signing a specific statement to
                                                        this effect (s103 CCA 1995)##Housing
                                                        loans##Where ancillary fees are payable by an
                                                        applicant in connection with a housing loan
                                                        (acceptance or administration fees, security
                                                        valuations, etc), the mortgage agent shall ensure
                                                        that a statement of such charges is prominent in
                                                        brochures, application forms and letters of approval
                                                        and that it explains the amount payable and in what
                                                        circumstances they will be refundable (S132
#Under art. 1815, par. 2, civil code (modified in   #Every cost elements have to be inclosed in
1996), only the clause about rate is void, and      TAEG (the real global yearly rate), under art.
no interest rates will be paid by debtor.#          122 T.U. banc. (in attachment); all other costs
                                                    have to be inclosed in written contracts, in
                                                    particular amount and ground; see art. 124,
                                                    par. 2, e), T.U. banc. (and 126). See more d.
                                                    lgs. 25.2.2000, n. 63, and d.m. 6.5.2000 (in
                                                    attachment), which have introduced in Italy UE
                                                    Directive 98/7#




#There is no legal sanction.#                       #The cost of credit is included in the TAEG to
                                                    enable consumers to make an effective
                                                    comparison. #The Act of 9 August 1993 defines
                                                    the "total global annual effective interest rate" -
                                                    TAEG) as the total cost of credit expressed as
                                                    an annual percentage of the amount of the
                                                    loan. The method for calculating the TAEG is
                                                    set by the Grand-Ducal Regulation of 26 August
                                                    1993 and provides that, to calculate the total
                                                    global annual interest rate the total cost of
                                                    credit to the consumer has to be determined as
                                                    defined by article 2e) of the Law of 9 August
                                                    1993 regulating consumer credit, with the
                                                    exception of the following fees:#(i) fees
                                                    payable by the consumer as a result of the
                                                    failure to meet one or more of his/her
                                                    obligations under the loan agreement;#(ii) fees
                                                    other than the purchase price due from the
                                                    consumer associated with the purchase of
                                                    goods or services, whether paid for in cash or
                                                    on credit;#(iii) fees arising from transfer of
                                                    funds as well as fees relating to maintaining an
                                                    account intended to receive sums debited for
                                                    the repayment of credit, interest and other
                                                    charges, except where the consumer has no
                                                    realistic freedom of choice in the matter and
#The amount paid above the maximum allowed     #Besluit kredietaanbiedingen:##art. 4
rate can be reclaimed in accordance with the   requirements: #- statement on the effective
Dutch civil code (3:309).#                     annual rate#- revolving credits: costs per
                                               installment and credit limit#- non-revolving
                                               credits: credit sum#- if in a credit offer the
                                               amount of the credit costs are mentioned, it is
                                               obliged to state the effective annual rate too#-
                                               when the effective annual rate is mentioned
                                               there is the obligation to state the percentage
                                               as the " real annual rate" [ wettelijke rente op
                                               jaarbasis]#- if not all credit lenders are eligible
                                               for the same effective annual rate, the creditor
                                               is obligated tot state the minimum and
                                               maximum percentage.##art.8: If in the
                                               prospectus a revolving credit is being offered,
                                               there has to be mentioned at least four
                                               representative credit limits with the most
                                               common repayment schedules: what facts are
                                               important are in calculating the theoretical
                                               duration of the credit repayment; the costs in
                                               event of repayment arrears and finally, the
                                               costs on the event of early repayment##art.9:
                                               if a non-revolving credit is being offered, the
                                               prospectus has to mention at least four
                                               representatives credit sums with the most
                                               common repayment schedules; at least one
                                               example of a calculation that makes it clear
##                                             how, depending disclosed are: installment
                                               #Elements to be on credit sum, TAEG, the sum
                                               negotiated spread and possible expenses
                                               charged by the credit institution for each
                                               instalment (administrative expenses) #
#On the subject of personal loans it has been       #The consumer has to be informed of all the
pointed out that there are no clear guidelines;     expenses, commissions, costs, etc that come
non fulfillment of the requirement to indicate      with the loan. if they are not mentioned in the
the interest rates then the applicable rate will    contract they cannot be applied and the
be the officially designated one. Concerning        consumer is not obliged to pay them. #
personal overdrafts, the maximum will be 2.5
times the legal one, without the law imposing
the excess penalty. One can take it that it will
be reduced to this percentage. ##Regarding
mortgages, current regulation lies with the
government, resulting in government imposed
fines for non-fulfillment. Nevertheless, these
administrative norms can be set out by a
tribunal to litigate between parties as there is
no civil regulation of mortgages. ##Finally,
and refering to the Law to Supress Profiteering,
in the case of suspecting that a loan is of a
fraudulant nature, same will be declared null
and void, so that the parties have to revert to
their pre-contractual situations without the
operation inferring interests; and if too much
has been paid the lender will return it. One can
understand that this measure be too radical
bearing in mind that the borrower has an
interest in the loan, although under different
conditions, that is clear. #
#The basic assumption is - as described - that      #See item 13.#
the contract applies. For more details, see reply
under item 8.#
                                          15                                                 16
How is this disclosure achieved?                   Does your country have more informational
                                                   duties than prescribed in Article 4 of the EU
Please describe more detailed, i.e. forms, fixed   Directive on Consumer Credit (87/102/EWG)
wording, prescription of a payment plan with       especially concerning warnings?#
dates and instalments.#




The requirements are described exactly in § 33 #None, except those mentioned in the
Banking Law. The consumer credit agreement         Consumer Protection Law (see question 6
has to contain at least the following data: #1.    above, especially § 25a KSchG).#
In each case in form of absolute amounts #a)
the total cost in accordance with Exp. 7, #b)
the sums of the cost elements that are
excluded in Exp.7 Number 2 lit. c and d and #c)
the sum of the amounts which can be indicated
in accordance with lit. a and b, #2. the effective
annual interest rate in Arabic numerals in
remarkable place of the contract, #3. a
reference to the notice of the valid fictitious
annual interest rate for the default of payment
in accordance with § 35 Exp. 1 Number 1 lit. d,
#4. a possible interest-indexation clause, which
has to be bound to oblective yrdsticks (§ 6
Exp.Paragraph 1 Number 5 KSchG remains
unaffected) and #5. the number, the height
and the maturity times of the installments of
the total cost; #6. a reference to the savings
component, if for the purpose of the credit
provision of security with the consumer credit
agreement an experiencing insurance or a life
insurance are to be locked, as well as a
reference if the insured sum is higher than the
See response to question 14                     #The loan offer (from 1/6/03 : the agreement)
                                                contains compulsory information, some of which
                                                must be given in the form of separate clauses
                                                in bold letters.#These are:#1. "never sign a
                                                contract which has not been completed" #2. a
                                                statement to the effect that insurance in
                                                respect of the outstanding balance is not
                                                compulsory and that the consumer may cancel
                                                it during the first month (new legislation)#3.
                                                "the consumer may not sign either a bill of
                                                exchange or a promissory note promising or
                                                guaranteeing payment of liabilities arising under
                                                the loan agreement. Nor may the consumer
                                                sign cheques guaranteeing liabilities arising
                                                under a loan agreement".#4. "apart from the
                                                agreed TAEG, the consumer cannot be required
                                                to pay any additional fees than those expressly
                                                agreed, with the exception of agreed sums
                                                payable in the event of failure to fulfil the
                                                agreement".#5. a statement in relation to
                                                retention of title.#6. the text of article 18 in
                                                relation to the cooling-off period.##




The consumer must be informed of the       #The requirements mentioned in answer to question
                                           15 go further than those in the directive and may to
#1) the amount borrowed (i.e. excluding
                                           some extent be interpreted as (indirect) warnings.#
all costs)#2) the total amount of the
credit costs, #3) the annual costs in %
(APR)#4) the total amount to be paid (i.e.
the total of the amount borrowed, the
down payment and the credit costs#5) the
payment plan, including the size and date
of each instalment to be paid#6) the price
of the goods in question if the consumer
paid cash down.#Cf. The Consumer Credit
Agreements Act § 9.
A consumer credit agreement shall be              #Duties, not prescribed in article 4:#the
concluded in writing and the consumer shall be    consumer credit agreement shall state the limit
given a copy of the agreement.#The consumer       of the credit, if any;#the right to pay the credit
shall not be charged any payment, interest, fee   before maturity and the determination of the
or compensation that is not included in the       compensation therefore, if any.#The law does
terms of this agreement.                          not mention any kind of information about
                                                  concerning warnings. #
Loan agreements must specify the global             #In addition, home loans at fixed interest must
effective interest rate (TEG or TAEG)               be accompanied by a repayment schedule with
integrating all the fees associated with the loan   details of the split as to interest and capital
(administration of the account, agent's fee,        applicable to each repayment.#
insurance, security) #In addition, home loans
at fixed interest must be accompanied by a
repayment schedule with details of the split as
to interest and capital applicable to each
repayment.#
Besides the fact that written form is mandatory,     #Rights to information which go beyond the
there is no special form prescribed by law in        named EU Directive are:#1) Information as to
which suppliers have to enter their cost             rights:#§§ 495, 355 BGB (or § 7 VerbrkrG)
elements uniformly. There are banks who offer        include a right of withdrawal and prescribe the
a comprehensive form while others seem either        form to be advised of that right in the deed.#2)
to be interested in hiding cost elements or just     Information as to price and costs:#The net
do not care for their disclosure.#So, there are a    credit amount must be stated (§ 492, para.1
number of problems of information in credit          no.1 BGB or § 4, para.1 VerbrKrG). According
contracts. For example although all contracts        to § 491, para.2 no.1 BGB (or § 3, para.1 no.1
contain the indication of the annual percentage      VerbrKrG) the legal definition is given as the
rate (APR) it is quite difficult to detect which     actual amount of credit paid to the consumer.
interest rate shall represent the APR. It is         This clarifies to consumers the common practice
normally written in the same form as other           of deducting some of the costs and fees from
interest rates and therefore disclosed together      the amount of the loan before it is paid over.
with the rate for credit cost which is also given    The credit net amount enables consumers to
as a monthly rate. The verification of the APR is    compare the amount they have to repay with
extremely difficult because no contract explicitly   the amount they actually receive. The
states which cost elements have been used to         difference between the total amount of the
calculate the APR. This is especially true if        instalments to be paid and the credit net
insurance premiums are financed together with        amount corresponds to the total amount paid
the credited amount. In some credit contracts        by consumers for credit. However, this tells
insurance premiums are not visible in the credit     consumers nothing at all about the actual
contract itself but only if a copy of a special      commitment they are taking on in relation to
insurance contract is added. While fixed             their liquidity, so it is of little significance in
instalment credit has the most individualised        terms of the prevention of
information, variable rate credit and credit card    overindebtedness.#3) Formal requirements in
credit restrict their information mainly to the
Individual creditors will adopt a variety of         the case of default:#Lenders must allow
                                                     #     #
measure to provide information to the debtor,
but the cost information will in paratice be
incorporated into the total charge and
repayment terms provisons of the credit
agreement
Disclosure is achieved by the contracts            #*#1. Unfortunately, the greek legislator (as
themselves as well as indicative payment plans     referred above, in the JD F1 983/1991) did not
given by the banks some time after signing of      make use of the possibility to provide more
the contract.#Within 30 days after default, the    informational duties than prescribed in art.4 OF
bank is obliged to give detailed information to    EU Directive on Consumer Credit. Art.9 of this
the debtor regarding the debt (capital, interest   JD has more or less adopted the wording of the
and charges of any kind - 22501/2002 Act of        EU Directive. Moreover, the greek legislator has
the Governor of the Bank of Greece).               not provided as a duty of the creditor to warn
                                                   the consumer on the risks related to eventual
                                                   default payment and the incurring charges. #2.
                                                   Nevertheless, the recent Act of the Governor of
                                                   the Bank of Greece (Act Nr 2501/31.10.2002
                                                   being valid from 1.1.2003 - Official Journal A'
                                                   227/28.11.2002) provides for the obligation of
                                                   the creditors to give additional information to
                                                   consumers. In particular, this Act introduces the
                                                   following obligations of creditors:#* To properly
                                                   inform the clients about the nature and
                                                   characteristics of the products and services
                                                   offered by the bank, as weel as the conditions
                                                   by which bank transactions are ruled (art.
                                                   A)#* To periodically inform the clients in writing
                                                   during the contract regarding the enforcement
                                                   of the contractual clauses agreed (art.A).#* To
                                                   respond within a logical period of time to
                                                   requests of the clients asking for clarifications
                                                   and information on the enforcement of the
See Item 14                                        contractual clauses (Art.A).#* To institute a
                                                   More informational duties##The specific warnings
                                                   that must be provided under the Consumer Credit
                                                   Act 1995 over and above the informational
                                                   requirements in Article 4 of Directive 87/102 (as
                                                   amended) are as follows: -##Credit
                                                   agreements##Notice of a 10 day cooling off period
                                                   must be provided in a credit agreement (excluding
                                                   overdrafts, credit card and housing loans) though
                                                   this right can be signed away by a consumer (30(2))
                                                   ##Housing loans##„WARNING – YOUR HOME IS AT
                                                   RISK IF YOU DO NOT KEEP UP PAYMENTS ON A
                                                   MORTGAGE OR ANY OTHER LOAN SECURED ON
                                                   IT‟##THE PAYMENT RATES ON THIS HOUSING LOAN
                                                   MAY BE ADJUSTED BY THE LENDER FROM TIME TO
                                                   TIME‟#(Section 128)#Endowment
                                                   mortgages##„WARNING – THERE IS NO GUARANTEE
                                                   THAT THE PROCEEDS OF THE INSURANCE POLICY
                                                   WILL BE SUFFICIENT TO REPAY THE LOAN IN FULL
                                                   WHEN IT BECOMES DUE FOR REPAYMENT‟#
Amount of the credit, every condition, the         #See art. 124 par. 2 (f-g): under italian law,
number and the amount of instalments, with         there's a duty to disclose guaranties and
maturities (therefore, a real payment plan),       insurances which consumer has to provide.#
must be inclosed in written contract.#Contracts
must also specify costs, other than TAEG: if it is
impossible, they have to provide a real
(credible) foresight (see art. 124 par. 2 T.U.
banc.)




Loan agreements must be in writing in as many #No, the Directive is applied as it is##
copies as there are parties to the contract with
a spearate interest. The consumer and any
guarantor must be given a copy of the written
agreement.#The written agreement must
contain:#a) a statement of the total global
effective annual rate of interest and the
circumstances under which this rate may be
modified;#b)a statement of the amount or any
limit on credit;#c) a statement of the term of
the loan;#d) a statement of the terms for
repayment of the loan, with particular regard to
the amount, the number, the frequency of or
the dates for payments to be made by the
consumer to repay the loan and to pay interest
and other charges;#e) a statement of other
fundamental conditions as provided for in any
Grand-Ducal Regulation.#
Article 26 WCK and Besluit kredietaanbiedingen.    #Yes, #
These are: a prospectus or any other form of
statement made by the creditor #




Banks usually give debtors a loan repayment        #No#
scheme, with the agreed rate of interest
(euribor+negotiated spread) covering the loan
period. It also contains servicing costs and the
TAEG. They may also make simulations of
repayment schemes based on increases in
interest rates, but this usually only happens on
the request of the customer.
Costs must be detailed on the contract, and the     #No, the Spanish Directive on Consumer Credit
latter always formalised in writing. Therefore,     was passed under the mandate of Directive
one knows in advance what these extra costs         87/102; as the Spanish Law is from 1995, it
are simply at the time of paying the interest.      also absorbed the modification made to the
##With personal loans the basic information         Directive of 1990 (Directive 98/88). And the
regarding the contract is in article 6 of the Law   obligations regarding information of the Spanish
7/95; a) equivalent annual tax level; b) relation   law repeat those of the Directive.#
of the total, number and period or dates of
payments, both of interests and other
expenses, such as the total cost of these
payments; and c) breakdown of the component
costs of the total credit.##With mortgages it is
the Order of December 12th 1989, Circular
8/90 which specifies the content of the
contract. These clauses should also be written
into the contract. These norms are just
mentioned as they are rather extensive.




See above.The creditor does not have to             #No#
disclose details of his costs. A different matter
is that, both in marketing and in the contract,
the creditor must clearly state the interest and
how it is calculated.
                                             17                                                18
Does the creditor have to investigate the           Is there any liability towards other creditors or
debtor’s income?                                    the debtor for improvident credit extension?#

i.e.: income to debt ratios etc.?#




There is no legal obligation for the creditor; in   #No.#
practice both income and amount of
indebtedness are queried before granting of
credit. Incorrect data of the debtors cause
disadvantages in debt adjustment procedures
(§ 210 Abs.1 Z 4 KO).
Yes, the lender must look into the debtor's      #If the lender grants a loan when it should
solvency and may not grant a loan unless it      have refused it because of the consumer's
considers that the consumer is reasonably able   inability to repay it from his/her resources, the
to repay it.                                     judge may withold the right to claim the
                                                 interest. Judges have applied this sanction on
                                                 many occasions (see decisions published in the
                                                 Annuaire Juridique du Crédit et du Règlement
                                                 Collectif des Dettes, available from the
                                                 Observatoire du Crédit et de l'Endettement)#




no general requirement to this effect            #There may be (very) weak indications in that
                                                 direction but at this point no principle or rule to this
                                                 effect can be established. #
No.   #No.#
The lender institution has an obligation to give    ##
advice even though it has no power to make
investigations, nor positive registers to support
this obligation. It still has to check that the
customer's sworn declaration of income is
sufficient for him/her to repay all his/her
loans.#There is, however, no regulation on the
subject and each institution has its own credit-
rating method. It has been noted in general
terms that lenders would like an encumbrance
ratio (monthly payments divided by monthly
income) of not more than 33%. #
Within the field of consumer credit there is no       #A specific provision does not exist in German
legislation which explicitly states that lenders      law, but the general legal principle of "bona
have a duty to inquire about the solvency of          fide" can apply.#Improvident or reckless credit
their clients. But this does not mean that these      extension could be considered as contrary to
inquiries are not made before the granting of         good faith. The german courts have developed
credit, although the consumer credit business is      the lenders' obligation to give information and
standardized.#The extent of the investigation         to advice on the basis of the general rule
of the creditworthiness depends on the amount         contained in § 242 BGB which expresses the
of credit. In principal the client has to prove his   notion of good faith. This obligation is justified
monthly salary or other assets. He has to             by the expertise and experience enjoyed by the
disclose his current expenses and financial           lender and by the need to protect the
obligations. The credit institution will make         borrower.#
inquiries at the German General Credit
Protection Association (SCHUFA, please see
answer to question 19).#Some credit
institutions specialised on consumer credit (i.e.:
NORIS Bank) use a standardized software
programme to investigate the
creditworthiness.#




No                                                    #No#
 No, there is no legal requirement that the        #There are no special provisions in law for this
creditor investigates the debtor's income.         matter.#
Nevertheless, it is common practice for the
banks before approving an application for credit
to ask from the consumer the official document
from the taxation stating the consumer's
income for the previous year. #In credit card
contracts there is a standard term providing for
the right of the bank to check the personal data
of the consumer, in order to collect information
on the financial statue of its clients.#The
Banking Code of Conduct, adopted by the
Banks in 1997, provides in art.36, that the
Banks may requre, when having a request for
credit, the following data :#a) age, profession,
status of family of the person interest for credit
and the guarantors#b) financial situation of the
afore-mentioned persons and property they
might possess. #c) ability to perform their
obligation under the contract.##




Investigation of income##No. There is no             Liability for irresponsible lending##No. There is no
general legal duty of care or legislative            such liability to other creditors or the debtor, other
obligation to lend responsibly. However, in the      than the practical difficulties for lenders in
                                                     attempting to recover the debt where the debtor has
context of mortgage lending in particular, there
                                                     insufficient means to pay. However, it is speculated
are guidelines issued by the Central Bank (soon      that, with the increase in the variety and number of
to have some of its powers transferred to            agreements and thereby over indebtedness, a legal
IFSRA – See point 4) with regard to: -##(i)          defence of irresponsible lending may be established
multiples of salary that should be applied by        in the future##
mortgage lenders to determine the maximum
loan that can be granted #(ii) the need for
mortgage lenders to stress test a borrower‟s
ability to repay the loan given a rise in interest
rates##These are not legally binding and it
would appear that there is some variation in
the way different institutions apply these
guidelines in an extremely competitive
mortgage market. ##
No, but somone could discuss about a duty to       #There's no precedent about the debtor who's
take account of the debtor'income wich refers      not entrepreneur (but somone could discuss
to good faith (artt. 1175- 1375 c.c.); in that     about breach of good faith, like above); anyway
way creditor who lends too much in comparison      our Supreme Court (Cass., 13.1.1993, n. 343,
to debtor's income could perpetrate a breach of    in Giustizia civile, 1993, I, p. 1189) has passed
good faith. Only investment enterprises (in        judgement on bank's liability that lent money to
Italy, s.i.m.), that operate in the field of       an insolvent (under art. 5 bankr. l.): that's a
investment services, have to inquire about         secondary liability (art. 2043 c.c.), which
investor's experience, tendency to risk, and       attaches on banks that know (or have to know,
financial conditions (under Rules Consob,          under technical and practical sciences)
11522/98, art. 28: see it in www.consob.it).       insolvency of the debtor. Trustee in bankruptcy
                                                   and/or unpaid creditors (there are discussions
                                                   on this matter) can sue upon this grounds.#




There is no legal obligation for the creditor to   #The responsibility of the creditor in relation to
obtain information about the borrower's            reckless lending is not expressly provided for by
income; however, it is usual practice for          Luxembourg law. However, the consumer has
bankers to carry out a brief analysis of the       a right to take proceedings against the
financial situation of their clients.#             lender#a) when the consumer enters into a
                                                   loan agreement with someone other than the
                                                   supplier of goods or services with a view to
                                                   purchasing goods or obtaining services;#b)
                                                   when there is a prior agreement between the
                                                   supplier of goods or services under the terms of
                                                   which a loan is granted exclusively by that
                                                   lender to the customers of that supplier to
                                                   obtain goods or services from the said
                                                   supplier;#c) when the consumer obtains the
                                                   loan by virtue of that preliminary
                                                   agreement;#d) when the goods or services
                                                   which are the subject of the credit agreement
                                                   are not delivered or supplied or are only
                                                   delivered or supplied in part or do not conform
                                                   to the terms of the contract;#e) when the
                                                   consumer has made a claim against the
                                                   supplier of goods or services without the claim
                                                   being satisfied as the consumer was entitled to
                                                   expect.##
#Yes, articles 28 and 29 Wet op het               #No, article 16 b WCK, the creditor may lose
consumentenkrediet. #A creditor is not allowed    his licence when in violation of what is expected
to enter in a credit transaction of which the     of a " good creditor". This definition has been
credit exceeds 1000 euro without having           futher developed by the Dutch organization of
sufficient written information about the          finance companies [VFN].##
creditworthiness of the applicant.#The
creditworthiness must be seriously investigated
either by means of an information frorm with
relevant questions or otherwhise.




No.#However, credit institutions are bound by     #No.#
a duty of care in the exercise of their activity
(arts 74 and 76 of Decree-Law 298/92 of 31-12-
1992 which authorises the General Regime of
Credit Institutions and Finance Companies).
This duty may be interpreted to mean that
creditors are obliged to ask the debtor to
provide the necessary items to allow an
assessment of their credit capacity. The
parameters for exercising this duty are defined
neither in the law nor in jurisprudence, so it is
up to each institution to set their own.#
There is no legal obligation here, so                 #There is no responsibility on behalf of the
responsibility is with the financial entity.          debtor nor the creditor in the case of new
Therefore, for the effectiveness of the loan, it is   credits or the extension of existing ones, vis a
normaly required that the debtor show proof of        vis other creditors, except where bad faith
VAT returns, work contract and payslips, to see       exists, in which case criminal responsibility may
if the borrower can meet his responsibilities to      exist.Yes, there are two types of action,
the loan.##At the same time there are                 recognised by our law, which a creditor can
registers that contain names of people who are        take to protect his credit; one being
bad payers. It involves private files managed by      subrogatory action, whereby the creditor has
the actual financial institutions and public ones     the power to use all his rights to recoup his
managed by the Bank of Spain.                         goods in the posession of the debtor.The other
                                                      action is revocatory, whereby the creditor can
                                                      sue the debtor for fraude comitted against him.
                                                      #




Yes, the creditor must always thoroughly              #In the 1990s, the Supreme Court ruled in six
investigate the debtor's creditworthiness. This       or seven cases where the claim was that
investigation covers financial situation,             deficiency in the investigation of
property, assets, income etc. Provisions to this      creditworthiness should lead to adjustment or
effect are contained in the Consumer Credit Act       elimination of the obligation to repay the loan.
(Konsumentkreditlagen) and in the general             The principle confirmed by the Supreme Court
advice related to it. Another provision is in         here was that in only exceptional cases can
section 13(2) of the Banking Act                      deficient investigation of creditworthiness have
(Bankrörelselagen 1987:617), which prescribes         such an effect. Accordingly, the basic principle
that credit may not be extended if the debtor         is that the debtor must repay in full even if it
cannot be expected to repay it and is unable to       was improvident to extend him credit. See also
provide required security.                            item 25 below. #
                                         19                                                 20
Do you have a central credit reference system   How is this central credit reference system
in your country?                                organised?

                                                i.e.: Is it privately or publicly organised?#




yes; #In Austria the Kreditschutzverband von    The credit evidence is organized privately. With
1870 (KSV) - a creditor protection society -    the granting of the credit the consumers sign
runs the so-called "Consumer Credit Evidence"   an explanation, which reads about as follows:
(KKE). in this database all information about   #"I agree that on the occasion of my request
granted credits can be stored and downloaded    for the credit or the granting of the credit my
by the banks. There is no obligation for the    data may be sent to the Consumer Credit
banks to upload the information.#               Evidence and the Warning List run by the
                                                Kreditschutzverband von 1870 for the purpose
                                                of the unification and passing on of these data
                                                to participating companies for keeping their
                                                interests of creditor protection to be conveyed
                                                and you may inform the aforementioned
                                                partner companies about the result of the
                                                examination."
yes; #The Centrale des Crédits aux Particuliers        The Centrale des Crédits aux Particuliers is
was set up in 1985. The lender must consult            organised within the Banque Nationale de
the Centrale before making a consumer loan#            Belgique.




yes; #This kind of activity is carried out by different Privately
private companies. One of these is E41rather big. ##
yes; #A private company, has a wide coverage.# The company (Luottokunta OYJ) collect
                                              information abouth judgments of debts.#See
                                              21.
yes; #Specifically, there is a negative default     The FICP is a negative register administered by
register, the "FICP ".#see pagee "Les fichiers et   the Banque de France (public). It can only be
la banque" on the INC Internet site :               consulted by credit institutions through two
http://www.inc60.fr/page/bases.2_les_guides./A      routes:#- downwards route: the Banque de
ction-detailguide/guide-1034-                       France makes available a monthly update of the
les_fichiers_et_la_banque.xml/#                     register to the larger institutions#- upwards
                                                    route: an institution asks the Banque de
                                                    France about the position with regard to a
                                                    specific individual.
yes; #The General Credit Protection Association    The SCHUFA is organised on a private
("Schutzgemeinschaft für allgemeine                enterprise basis and signs as "SCHUFA Holding
Kreditsicherung" - abbreviated SCHUFA) works AG". It is a profitable business enterprise.#
as the central german credit reference system.
(See also:
http://www.schufa.de/unternehmen.html)#Cred
it institutions and other companies set up this
central organisation in 1927 for collection and
supply of data on
creditworthiness.#Approximately 5000
companies have become member of the
SCHUFA. These are business companies
granting commercially bank or trade credit to
consumers, especially credit institutions,
savings banks, credit card companies, leasing
companies, telecommunication and energy
suppliers, mail-order houses. From that the
main consumers' areas of life are
concerned.#The member firms are obliged to
transmit information about their clients to the
SCHUFA and vice versa. The SCHUFA collects
also autonomously data out of public lists of
debtors.#According to the information given by
the SCHUFA itself their data bank consists of
299 million particular data relating to 57 million
individuals.#
                                            Privately Organised, self regulated by the
no#Private Credit Reference Agncies exist such
as: - #Equifax                              Creedit Industry and supported by government,
PLC#http://www.equifax.co.uk#Experian       but there is a requiremnt to obtain a Consumer
Ltd#http://www.uk.experian.com/consumer/con Credit Licence in order to operate
sumer_main.html#see Attachemnt Q19##
yes; #Yes, there is the central data bank               It is a privately organized data bank in form of
"TIRESIAS BANKING INFORMATION SYSTEMS                   a societe anonyme. Its shareholders are banks
S.A.", which provides banks with the "negative"         and one factoring company. Its details are as
record of consumers. This data bank was put in          follows :#10, Massalias st., 106 80 Athens,
place by almost all the banks established in            Greece#http:/www.tiresias.gr#It consists of
Greece     #                                            two major data banks : a)The System of
                                                        Financial Behaviour and b) The Identity
                                                        cards/Passports bank which have been
                                                        lost.#TIRESIAS is supposed to provide
                                                        information only to Banks, to Companies which
                                                        issues and manage cards, to Leasing
                                                        companies, Factoring Companies and to public
                                                        organizations.#Moreover, (according to Law
                                                        2472/97 on protection of private data , art.12)
                                                        every natural person has access to TIRESIAS in
                                                        order to know whether it has data referring to
                                                        him/her.




Credit referencing system##There is no state            Credit referencing system - organisation##The
sponsored or organised credit reference system.         Irish Credit Bureau was established in 1965 by
However, a private company - The Irish Credit           a number of financial institutions. Hence it is
Bureau - is the main central credit referencing
                                                        privately organised by the industry itself. The
system in Ireland used by credit institutions.
Institutions also use both formal and informal credit   stated objectives of the member institutions in
scoring techniques##                                    establishing the ICB were:##„To assist in
                                                        lowering the cost of credit, enable faster
                                                        decision making in the provision of credit, and
                                                        aid in the avoidance of over-indebtedness of its
                                                        members „customers‟.##
yes; #We have Centrale dei rischi (see Central      Centrale dei rischi is a part of the organization
Bank, Banca d'Italia, instructions in               of Banca d'Italia (the italian central bank),
attachment), when informations about bank           therefore it is publicy organized. Other archives
lending (over a fixed sum of money, now €           above cited are organized by Banca d'Italia
75.000,00), and bank debtor defaults are            ("Archivio assegni"), and CCIA (see answer
inclosed, by the same bank that provides            19, about "bollettino protesti")
credit; every bank (and others financial
institutions, under art. 107 t.u. banc.) can
access to Centrale, and reads on line all
inclosed data: in that way, everybody is able to
know how much credit every debtor took from
bank system (but not identity of single bank
lender).#Furthermore, there are some private
credit bureaux, but inclosed data are not so
important for creditors (Crif, that provides also
software for credit risk management, Centrale
dei bilanci, that provides some index and
ratios).#After 4.6.2002, debtors who default
and, because of their default, cannot use
checks or debt cards anymore, are inclosed in
"Archivio informatizzato degli assegni bancari e
postali e delle carte di pagamento" (see Rules
Banca d'Italia, 29.1.2002, and d.m. 7.11.2001,
n. 458, in attachment); banks, financial
istitutions, and other public organizations can
access to these data.#Furthermore debtors,
who have signed promissory notes and default,
are inclosed in "Bollettino dei protesti", which
is, after 1995, an on line archive (see l.
12.2.1955, n. 77, modified in 1995 and 2000,
yes; #In 1965, a Credit Registration Bureau    Privately organised #See also
[BKR] was set up. #See also                    http://www.bkr.nl/home/1.html#It is a form of self-
http://www.bkr.nl/home/1.html##                regulation by the industry that is stongly supported
                                               by the Government.#




yes; #There are two central credit reference   The Central de Riscos de Crédito is publicly
systems: Central de Riscos de Crédito of the   organised by the Bank of Portugal, which is our
Bank of Portugal and Credinformações.#         Central Bank. Credinformações is privately
                                               organised.
yes; #In fact, there are the so called bad             Regarding the public regristers, the CIRBE
debtors lists. They can be public or private. #       (Bank of Spain´s Central Credit Reference) has
                                                      been recently modified by Law 44/2002 of
                                                      November 22nd. CIRBE is only accessible by
                                                      the credit agencies and then only when they
                                                      have a request for a loan from the potential
                                                      client. ##The private registers are under the
                                                      Constitutional Law 15/1999, December 13th,
                                                      and are regulated by the Protection of Private
                                                      and Personal Information, and the Proceedure
                                                      1/1995, March 1st, dealing with the offering of
                                                      services containing information about personal
                                                      solvency and credit. These private dosiers have
                                                      been created by the same financial institutions,
                                                      who define their working parameters, and must
                                                      rigourously respect the legal procedure. There
                                                      are several lists (BADEX, ASNEF, EQUIFAX...).




yes; #Yes, there are different registers for this     See item 19 .
purpose. The enforcement register is a public
register where all individuals and companies are
entered that are subject to the enforcement of
debt or other obligations. Bankruptcy and
adjustment of debt are also recorded. The
register is governed by an special legislation. In
addition, there are private companies which
maintain registers of defaulted payments etc.
This type of business is regulated by the Credit
Information Act (1973:1173). According to the
Act, collection of credit information is subject to
licence and is controlled by data protection
authorities. Information of individuals in the
register must be eliminated three years from
the end of the year in which the record was
made. Information from such privately
maintained registers is obtained against
payment. When information is bought, the
subject of the information must be notified
accordingly. Individuals registered in this way
may obtain the information concerning them
free of charge. In Sweden, the largest operator
in this field is Upplysningscentralen AB (UC). #
                                            21                                                  22
How does this central credit reference system         Does the central credit reference system create
work?                                                 special legal problems for the debtor?

i.e.: Only default or also positive registration?#    i.e.: improper use of data




The granting of credit is bound to the                The organization of the clause - hidden in the
agreement of the customers to the forwarding          General Trading Consitutions is frequently
of their data to the central credit evidence.         intransparent. The customers do not know who
Creditors are liable to pay the costs for inquiries   runs this "central credit evidence" and therefore
the the KKE. #The KKE works on a system of            cannot efficiently make use of their rights to
positive registration. That means that already        rectification and deletion of wrong information.#
credit requests and grants are stored. #
The Centrale des Crédits aux Particuliers                In the past, some postal sales companies have
records defaults in payments of consumer loans           wrongly registered some consumers. The
or personal loans. From 1.6.03, the register will        Banque Nationale deleted these entries
be extended to loan agreements (Centrale                 following demands made by the consumers
Positive). The lender must consult the Centrale          concerned.
before making a consumer loan.#




As far as consumer credit is concerned the ordinary      No, see answer to question 21
systems do not seem to engage in positive
registration.#The Personal Data Processing Act (no.
429/2000, lov om behandling af personoplysninger )
contains elaborate rules (in §§ 19-26) regulating the
activities of Credit Information Bureaus, including an
licence requirement.#
According to Personal Data Act#A person              It‟s always possible that the data about some
engaged in credit data activity may record into      person slip out and that‟s why it‟s neither
a credit data file the name and contact              impossible that the debtor get some legal
information on a person, as well as data on a        problems because of it. The book with this
default in payment or performance, where:#the        information could easily been used even in a
default has been established by a judgment or        wrong way. Still it must be quite exceptional
judgment by default handed down by a court           and will not been a problem.
and no longer subject to appeal, by a measure
undertaken by the enforcement authorities or
by the protest of a registered bill of exchange;
or the default has led to the official declaration
of the insolvency of the data subject in
enforcement proceedings; or #the default has
led to the filing of a bankruptcy petition; or
#the default has been acknowledged in writing
by the data subject (debtor) to the creditor;
or#the default relates to a hire-purchase
scheme and under the Hire-Purchase Act
entitles the seller to repossess the object,#or
relates to another consumer credit agreement
and under the Consumer Protection Act entitles
the creditor to terminate the agreement.#For
getting information about some ones credit
ratings you must have a agreement with the
“Luottokunta” and for the agreement you have
to have some reason to get the information, for
#The FICP records designated arrears of       Appearance on the FICP register does not entail
payments (three missed instalments) along     a legal prohibition against access to credit.
with registration with the overindebtedness   However, in practice, an insitution will not lend
commission.                                   to someone who is on the FICP register.
The SCHUFA registers defaults of payment            See answer to question 21.
("negative registration") and gives information
on the credit rating to its member firms
("positive registration").#Negative
characteristics being registered are for
example: #- application for a default order,#-
debtors' protest against writ of execution,#-
withdrawal of credit,#- misapplication of credit
cards.#It should be taken into consideration
that "misapplication of credit cards" is not
based on objective observations but just on
indivudal estimations of a member firm. #In
1996 the SCHUFA has introduced a new scoring
procedure. The SCHUFA determines a score out
of all data which the SCHUFA has collected to a
person. The score should inform a member firm
about the statistical default risk of a client. The
client himself has no possibility to receive his
score.#Especially this new scoring procedure
makes the limits of effective data protection
visible. The affected clients don't have effective
possibilities to control which personal data are
stored and how their score will be used. #Since
the Federal Data Protection Act
(Bundesdatenschutzgesetz - BDSG) was
enacted in 1978 everybody has a right to know
about the contents of his personal file as well as inaccurate data, #improper use of data
default registration
To date TIRESIAS provides only default               Problems created are the following :#a) an
registration. It has nevertheless announced         error concerning registration#b) delays in
that a positive registration system will be soon    registering of payment of debt#c) there are
put into place. TIRESIAS has been licenced by       complaints for leak of information to third
the Private Data Protection Authority to collect    persons not entitled to possess such
data for positive registration, but only if the     information (see above under 20)#
consumer is being informed and has given
his/her consent. #As far as default is
concerned, TIRESIAS data bank collects
information from the following sources :#a) the
banks (non-paid checks, cancellation of credit
contracts, of credit card contracts etc)#b) the
courts (bankrupcies, petitions for bankrupcies,
orders to pay etc)#c) land registries
(mortgages etc)#d) the Ministry of Finance
(fines imposed for tax infringements)




Credit referencing system - operation##The          Special legal problems for the debtor##We are
following extract from the Data Protection          not sure exactly what this question is getting
Commissioner‟s Annual Report summarises the         at. There are no direct legal consequences
situation with regard to electronic credit          flowing from information held on the bureau as
referencing in Ireland: - ##„The information        far as we are aware. A creditor could, in theory
which is held on the ICB database relates to        raise the multiple nature of a consumer‟s credit
credit agreements between these ICB members         commitments in court proceedings but we are
and their customers. A condition of such            not sure how this would help their
agreements is that the customer agrees that         situation.##The data subject who is adversely
the financial institution may use the data          affected by improper use of data can under
supplied for the purpose of credit                  Section 6 of the Data Protection Act have the
checking.##Consequently, where an individual        right to have incorrect information held about
enters a credit agreement with an ICB member,       them rectified or erased as
details of the individual‟s performance in          appropriate.##Section 10 empowers the Data
complying with the terms of the agreement           Protection Commissioner to investigate
(either in positive or negative terms) are          complaints and enforce the Act‟s provisions.
inputted onto the ICB “credit file” database,       ###
which may be accessed by all member
institutions of ICB. Each time a person applies
for credit from an ICB member, that institution
accesses the ICB‟s “credit file” to ascertain the
applicant‟s performance under any previous
credit agreements with ICB members.##A
measure of the scale and significance of the
credit referencing system in Ireland is the fact
that, at present, ICB holds 2.7 million names
and addresses on its “credit file” database. The
Data Protection Act 1988 provides data subjects
with important rights to ensure that their data
are accurate and are used appropriately. The
Banks have to submit to Centrale dei Rischi        In the last years the importance of Centrale dei
every borrower over a fixed amount of money        rischi is grown on the market: therefore there
(now € 75.000,00), every default (c.d.             are many precedents about abuse of signalling
"sofferenza", even if there are securities,        by banks; Rules about Centrale dei Rischi
guarantees, or other collateral), and every        ("Istruzioni", in attachment) impose on banks
situation in which there are difficulties to pay   to investigate about the correct use of this
(c.d. "incaglio").#Other archives inclose only     power (to signal), and to ask immediately for
default.                                           delete when they found out any improper use;
                                                   but debtors can make also an application to the
                                                   judge (for ex. they are not insolvent, and they
                                                   dispute with the lender).
Creditors associated with the BKR have two
obligations; first, before entering into a credit
transaction, to ask for information concerning actual
or past credit obligations of the applicant. Second,
the following facts after entering into transactions
like personal loans, revolving credits, hire purchase,
instalment credits, structural overdrafts on payment
accounts, student loans by banks and lease contracts
if the borrower is a natural person: name, address
and date of birth, information concerning the
extended credit, defaults in payments by the debtor.
Credit facilities which are connected with the use of
credit-cards are also registered with the BKR.#This
positive registration system is used with credits of
which the amounts are between 454 en de 113.445
euro. Negative registration is used for mortgages,
registration by creditors will only take place if there
is an arrear of more than four months.#




There is positive registration in the two systems. No. The establishment of central credit
                                                   reference systems has to be authorised by the
                                                   Comissão Nacional de Protecção de Dados
                                                   (National Commission on Data Protection) (Law
                                                   n. 67/98, of 26-10-1988). As regards reciprocal
                                                   information systems organised by entities
                                                   within the framework of the General
                                                   Regulations of Credit Institutions and Financial
                                                   Companies, the establishment of central credit
                                                   reference systems is regulated by art. 83 of
                                                   Decree-Law n. 298/92, of 31-12-1992.#The
                                                   use of personal data for other purposes has to
                                                   be authorised by the National Commission on
                                                   Data Protection.#The owner of the data has the
                                                   right of access to his/her data.
The functions of the Central Credit Reference       Problems only arise if a person is listed when
are contained in articles 59 and others following   asking for a loan. The fact is, once listed it is
in the abovementioned Law 44/2002, and at an        very difficult to get a loan, and the
administrative level by the Banl of Spain´s         circumstances of each case should be taken
Circular 3/1995, September 25th.##The bad           into account. ##In the last few years there
debtors registers can only be accessed with the     have been a number of decisions against the
consent of the financial institutions who, at the   financial institutions for improper listings, no
same time, should study the entries and always      matter if damages have been caused or not by
under government requirements which, since          being listed.
the change to law 44/2002, are due to be
modified. This norn regulates in great detail
nature and objectives of the CIRBE, the
declaring bodies, content of the statements,
proceedings based on the information offered,
it´s use and cessions, how long the information
can be kept (10 years) and the right to access,
modification and cancellation.




See item 19                                         No
                                             23                                                   24
Are there any preconditions for the co-liability       What are the consequences if these conditions
of spouses or children in credit contracts and         are not met?
other debts?
                                                       i.e.: void, pay of damages, reduction of the
i.e.: information, warning, minimum age, own           debt?#
facility for repayment, own interest in the
credit etc.?#


In accordance with § 25a KSchG banks have to           The violation of the regulations in the Banking
instruct spouses who together sign a credit as         Law are sanctionless to a large extent. The
consumers - may the liability of one of them           violation of the regulations of the KSchG may
only be a bailsman - or a spouse, who signs the        result in a fine for companies up to EUR 1,450,-
liability for an existing credit of the other one as   , the contract remains valid. #Violation of the
a consumer on a separate document about #1.            legal competency in Private Law means nullity
that, if the spouses are liable solidarily the         of such a contract.#
creditor can order the full sum of the debt in
arbitrary sequence of all of them without
consideration, who got the credit sum, #2. that
the liability remains upright upon divorce,#3.
that only the court in the case of adivorce can
limit the liability of one of the spouses in
accordance with § 98 Marriage Law to a loss
endorsement, which has to be requested within
a year after the divorce is res judicata. #There
are no more protection regulations for wives.
#Children, who are not yet of age, may be
obligated only in the context of their limited
legal competency in Private Law. Since
consumer credit agreements usually do not
belong to the "usually business concern" of
persons under age, such are subject to
approval by the court (§ 154 Exp. 3 ABGB:
Representative actions and consent of parents
Under the rules governing marriage, if a credit   see reply to question n° 23
agreement was concluded for household
necessities, both spouses are liable. If a credit
agreement exceeding household necessities
was made with only one spouse, the other
spouse may seek its cancellation from the court
of first instance. #Under the rules governing
the incapacity of minors, authorisation by the
Juge de Paix is required for a minor to be able
to take out a loan. This rule also applies to
emancipated minors. If such autorisation is not
obtained, , the credit agreement will be void
and the minor will not have to repay the sums
due unless the transaction generated a profit
for the minor.#In addition, the Law of 11 June
1991 provided that the income of minors
cannot be used to provide a guarantee in
respect of a consumer credit agreement.##




A spouse is only co-liable if (s)he enters the credit  See answer to question 23
agreement her/himself as a co-debtor or a guarantor.
The validity of the contract is regulated by the same
principles of law as a contract to this effect entered
into by any other co-debtor or guarantor.#Credit
agreements entered into by minors (i.e. children
under 18) are not binding.
Co-liability in credit contracts and other debts
do not exist except that spouses, living
together, have co-liability for debts for cost of
living (food), and for the rent for the home and
summer residence. #
Solidarity between spouses is envisaged in           With regard to solidarity between spouses, the
article 220 of the Civil Code: "Each spouse has      consequence is that the creditor can only
the right to enter into a contract alone for         pursue the one who took out the loan unless he
support of the household or the education of         himself/she herself is at fault (knowledge of the
the children: any debt thus contracted by one        marital status of the one who took out the
of them binds the other in solidarity.               loan). #
#However, that solidarity does not take effect
in relation to expenditure which is manifestly
excessive having regard to the standard of
living of the household, the effectiveness or
ineffectiveness of the activity and the good faith
or bad faith of the other party to the
contract.#Nor does it have effect if both
spouses have not consented to it for purchases
by instalments or for loans, unless for modest
amounts for everyday necessities.#Under
articles 388, 1304 and 1305 of the Civil Code,
banks may not grant an advance on an account
which may be assimilated into a loan to
children.##
The Federal Court of Justice (Bundesgerichtshof     The loan guarantee or joint liability is a
- BGH) has developed unified principles for the     transaction contrary to public policies and is
co-liability of relatives (see BGH - XI ZR          void. The transaction is null and void (§ 138
248/99, in: Neue Juristische Wochenschrift          BGB) or exceptionally partially null and void (§
2001, 815).#The new jurisdiction applies to         139 BGB).#
spouses, children, parents, fiancés and partners
of extra-marital cohabitations.#According to
this new jurisdiction the validity of a loan
guarantee depends on the "emotional
closeness" ("emotionale Verbundenheit")
between the financially overstrained guarantor
and the principal debtor. If the guarantor will
be extremely overstrained ("krass überfordert")
by the loan guarantee, it will be presumed that
#- the relative has assumed a guarantee only
because of his emotional closeness to the
principal debtor and not because he or she has
assessed the interests and economic risks on a
rational basis,#- and that the credit institution
has take undue advantage of this emotional
closeness. #This presumption can be
rebuttled.#The guarantor will be extremely
overstrained if he or she for example will not be
able to fulfill his current interest
payments.#These new principles also apply to
other commercial or professional lenders.#
only parties to the contract are liable on it#      n/a
Spouses or children, as well as any other third    If a child of less than 18 years old signs a credit
person, has no liability whatsoever for any kind   contract, such contract is void according to our
of debt of the indebted person unless it has       civil code. If the spouse or other relative has
signed the relative contract as a guarantor.       not signed the credit contract, the creditor
Where children are concerned, they cannot          cannot issue proceedings against him/her and,
guarantee and be liable with their own             if they do, they will be rejected by the
resources unless they are minimum 18 years         court.#According the general clause of our Civil
old.#In practice, if the bank considers that the   Code (art.178) a contract contrary to good
income of the interested person is not             morals is null and void. Enforcing this article in
sufficient, the bank asks from that person that    the case of guarantors one may claim that
his/her spouse signs the contract too either       guarantees signed by relatives who, acting
together with the interested person or as a        sentimentally, undertake severe financial
guarantor to the contract. In both cases, the      obligations towards banks, while being of a
spouse has full liability under the contract.      weak financial situation, have no personal
According to the Nr 2501/31.10.2002 Act of the     benefit of the contract they guarantee and are
Governor of the Bank of Greece (see above          not properly informed by the bank, may claim
under 16) the bank has exactly the same            that such guarantees are null and void based
obligations for providing information to the       on art.178 and 188 of the Civil Code )
guarantor (art.4b) #




Items 23, 24 and 25 - Preconditions for co-      See above
liability##Under the Consumer Credit Act, it is
an offence to send circulars knowingly to
minors (S.139) offering credit and, in general
terms, credit agreements with minors will not
be enforceable in contract law, except insofar
as they are for the minor to provide for
„necessaries‟.##A spouse will not be jointly
liable for the debts of his/her spouse unless
s/he is in some way a party to the agreement
in question, either as a co-signatory or as a
part of an ongoing or new guarantee. If the
spouse is a party to a credit agreement with
his/her spouse, both parties will generally be
„jointly and severally liable‟ i.e. both fully
responsible for the debt, regardless of whether
the spouse derived any actual benefit from the
credit in question or facilitated repayments
from an account of their own. There is some
evidence from the Money Advice and Budgeting
Service (MABS) of individual cases of hardship
caused by co-liability in these type of
circumstances but it has not received political
attention.##Under the Family Home Protection
Act 1976, a spouse cannot mortgage or give
the family home (in his/her sole name) as
security for a loan without the express written
consent of the other spouse. If a family home is
in joint names, any such loan would not be
enforceable without both parties consent.###
Under art. 186 c.c., which contains rules about See above
married couple who have chosen the co-
ownership regime (therefore, every new
properties after the marriage will belong to both
husband and wife), creditors can sell (auction)
goods owned by couple only if loan is
contracted on the behalf of family (or by both
husband and wife); under art. 189 c.c., goods
owned by marriage couple can be selled
(auction) to pay off loans contracted by one of
both husband and wife without the consent of
the other (and which exceed the limit of the
ordinary business), if the former cannot pay,
but creditors can retain only an half of
purchase; finally, under art. 190 c.c., creditors
can sell goods owned by one single (if
properties that belong to both husband and
wife aren't sufficient), but they can retain only
an half of the purchase.#Loan agreement are
void if any party is not 18 years old.#There's
no other limitation for children or
spouses.#Some precedents recognized a tacit
agreement according to which husband acts on
behalf of wife, for all acts of ordinary business;
therefore wife is personally bound by these
debts.##




The law does not provide for any express         If the person is not accepted as guarantor, the
condition for providing a guarantee unless the   debtor may be refused the loan or the amount
guarantor has attained the age of majority.      of credit may be reduced.#
The creditor relies primarily on the financial
capacity of an individual in accepting them as
guarantor.##
#Spouses are liable for some household debts         #nullity of the contract see above#
even without co-signing and sometimes even if
they terminate a marriage settlement. All this is
based upon the general law governing
matrimonial property right, which is based on
the legal responsibility of spouses to support
each other [ Dutch Civil Code (BW)1:81 ] This
liability can be limited by judiciary verdict at the
request of one spouse [BW 1:86]. Permission of
both spouses is required for signing a
guarantee contact. Without this permission the
contract can be reversed [BW 1:89 jo 1:88]. #




Credit contracts are subject to the general        A spouse can request the legal recognition that
regulations on joint liability of spouses laid     the debt is not a joint debt and the division of
down in the Civil Code (articles 1690-1697).       property so that his/her part of the marital
Debts incurred during marriage for the benefit     property is not used to repay debt.
of both spouses are considered joint debts.
Thus, both spouses are responsible for
repayment.#
The system is different for minors and                As already mentioned in the case of minors,
spouses.##In the case of a contract for a loan        parental or guardian consent is required
signed by a married couple the pre-nuptial            otherwise the contract will be nullified, although
financial agreement must be known (division of        the minor or disabled has to initiate the
property or joint property). If there is a division   nullification. ##With contracts signed by one of
of property, each partner is responsible for          a couple thay are totally valid, and the question
what he/she signs, and since there are not joint      lies with determining if responsibility for
belongings, the debt is carried by the partner        payment lies with the joint earnings settlement
who signed the contract. With both partners           or the patrimony of the non-signing spouse.
signature on the contract responsibility is
shared.##In the case, of joint property
agreement, their joint assets will be liable if the
financing was agreed by the spouses for the
management or maintenance of their property;
otherwise, if there was not consent of both
partmers the signer of the contract will respond
with his personal assets first and with his/her
share of the joint assets second.##Minors
cannot acquire a loan without parental or
guardian consent, nor is their consent valid to
contract. Without consent the contract is void,
but disability cannot be cited by the able. The
period of nullification will last four years from
the time that the minor was able to act. The
disabled is not obliged to repay unless he
benefits financially from the good or money
No, in Swedish law both spouses in marriage           See item 23.
are independent financial actors. One pouse
does not have any liability for the other
spouse's debt. A different matter is that the two
spouses can of course enter into a credit
contract together, for a home loan, for
example. #
                                          25                                                   26
Have problems connected with co-liability and      Do you have a maximum default interest rate?
personal guarantees for loans by family
members, relatives etc. received any political
attention?




Only to a small extent, especially still no        yes; #Only relative ones regarding to the
regulations with effective sanctions such as       agreed upon interest rates (see below question
nullity of such contracts could be achieved (See   27). There is a usury law, which may result in
for example question 6, § 25 b, c, d KSchG,        nullity of payments under certain strict
which have no substantial relevance in practice    conditions, however does not indicate a
so far).#                                          maximum interest rate. In practice the Usury
                                                   Law (see enclosed Wuchergesetz.pdf) is of no
                                                   meaning.#
The Law of 12 June 1991 contains specific rules        yes; #The law restricts the rate of interest on
governing those who provide guarantees in              arrears in respect of a consumer loan to the
respect of consumer credit agreements:#- the           TAEG specified in the agreement, plus a
guarantor must be informed before conclusion           surcharge of 10%.##
of the agreement and be provided with a copy
of the offer;#- the guarantor must also be kept
informed of problems arising in relation to
fulfilling the agreement such as missed
payments and payment facilities provided; #-
the guarantee for liabilities arising under a
credit agreement must specify the amount
guaranteed. The guarantee is only good for
that amount, which may be increased by
interest due on arrears #- even in the case of a
guarantee for full joint and several liability, the
lender must first put the borrower on notice to
pay in accordance with the formalities in
relation to cancellation of the
agreement.#Further, under the new Law, a
guarantee for a credit agreement of an
indefinite term will be limited to 5 years
(renewable).#




Especially cases dealt with by the Banking             According to the Payment of Interest Act (Renteloven) the
Complaints Board (Pengeinstitutankenævnet )            interest rate in case of nonfulfilment of payment obligations
concerning elderly parents signing as guarantors for   as a general rule is maximized to the benefit of consumer
commercial credit to their children have attracted     debtors.
some attention and formed part of the background
for the introduction in 2002 of provisions offering
private guarantors (in general) partial protection
against banks.
#Debt adjustment shall not prevent a creditor       yes; #The maximum default interest rate is the
from recovering the debt from a guarantor           interest added whith 4 percentage. The debtor
(section 14, Act on the Adjustment of the Debts     is still not bound to pay more than the official
of a Private Individual, 57/1993). The situation    reference interest added whith 4
of the guarantor as compared with the situation     percentage.#Official interest is confirmed by a
of debtor has be the object of discussion and       degree once a year..#
critic. #As a result of the critic has the Act on
Guaranties and Third-Party Pledges (361/1999)
several points were the duty to inform the
guarantor about the debtors situation is
regulated.(for example section 23 subsection 2).
Articles L313-7 to 313-10 of the Code de la         yes; #Two situations should be distinguished:#-
Consommation#With regard to solidarity               where there is non-payment of instalments,
between spouses, the practice is a little more      the creditor cannot apply a rate of interest to
complicated (see document "surendettement et        the sums due which is higher than the interest
régime matrimonial," INC Hebdo)#With regard         rate on the loan#- when the overindebtedness
to the provision of security by family members      commission decides (see reply 46 and below),
or close friends, we have asked for abolition of    at the recommendation stage, to reduce the
what we consider to be an abuse of security.        rate of interest on the loans to enable the
Lenders recognise that it is not a real guarantee   debtor to repay his/her debts, the rate may not
for them, but a way of exercising pressure on       exceed the "legal interest rate". In 2003, the
the debtor. In the course of debates at the         legal interest rate is 3.29%##
time of the 1998 reform, they agreed to give up
use of this type of guarantee. #
       yes; #The statutory maximum default interest
       rate for consumer contracts is 5 % above the
       base rate (§ 288, para.1 BGB). The current
       base rate is 1,97 % applicable since 1 January,
       2003. #In the case of agreements among
       business enterprises the statutory maximum
       default interest rate is 8 % above the base rate
       (§ 288, para.2 BGB).#The creditor can claim a
       higher default interest rate for other legal
       grounds (§ 288, para.3 BGB). The contracting
       parties can stipulate that the agreed interest
       rate shall also apply to the case of default.
       Although the Federal Court of Justice has
       developed the principle that the obligation to
       pay the agreed interest rate ends with the
       acceleration of the credit. Incidentally the
       prohibition of usury has to be observed.#The
       statutory principles do not apply, if the lender is
       able to prove a higher damage or if the
       borrower can prove a lower damage (§ 497,
       para.1 BGB). #




none   no#No, but see Q8 above#
No.         yes; #1. For "non-banking" credit yes (please
            see above under 8) . It is 2% above the
            interest rate. To date such default interest rate
            is 10,75% #2. For banking credit maximum
            default interest rate is a percentage of 2,5% on
            top of the contractual interest rate as agreed in
            the credit contract. #PLEASE NOTE : This
            default interest rate is due, as long as the credit
            contract is valid. If the credit contract has been
            early terminated upon written notice of the
            bank and the whole amount of credit is due, the
            default interest rate since such written notice is
            the one provided by law, i.e. currently
            10,75%.#




See above   Default interest rate##There is no maximum default
            interest rate set by legislation. ##
No, but Act (of Parliament) n. 54/1992 has         yes; #Under Art. 1384 c.c., penalty clauses
introduced the duty to inclose maximum             which are "clearly excessive" can be reduced
amount due in guarantee contracts (for ex:         upon equity by judge (according to an opinion,
guarantee is tying within € 25.000,00), and this   judge could do it ex officio, without a party's
concerns each guarantor, not only family           application, in the course of a process). Similar
members; under some precedents, guarantee          rule is art. 1526, par. 2, c.c. (which concerns
is not tying anymore if many time is elapsed,      selling when seller take ownership of the good
and debtor's condition has radically changed       since buyer pay off); and 1469bis, par. 3, n. 6),
(for ex: debtor has finished carrying on his       c.c., under which, in consumer's contracts, all
business, and further he has begun a new           penalty clauses are void if the sum of money
business).                                         that consumer has to pay is "clearly
                                                   excessive".#According to an opinion, default
                                                   interest rate (art. 1224 c.c.) would be also reduced
                                                   by judge, like penalty clause (art. 1384 c.c.); but it
                                                   seems to be opinion of the minority.#




Civil law applies.                                 no#Most loan agreements provide for an
                                                   increase over the standard rate of +/- 2% as
                                                   well as an indemnity of 10% to 15% of the
                                                   amount of the reduction resulting from
                                                   cancellation.##
      yes; #Art. 11 Besluit kredietvergoeding. The
      default rate is calculated on a daily basis. The
      default costs may not exceed the height of the
      agreed interest rate, charged in event of
      regular payment.#




No.   no#See box 8.#
We are unaware of any actions at a                yes; #We have already mentioned the result of
government level. Besides, responsibility lies    not stating the type of interest: the application
with the autonomies or regions and each           of the legal interest. This is decided annualy in
Autonomous Region is free to make its own         the national budget, and for 2003 it is 4.25%.#
political agenda in this area. ##There are laws
in place to protect the family such as
prohibiting the seizure of household furniture
and minium household incomes.




Yes, it is quite common to provide guarantee      yes; #Yes, in cases where the parties have not
for the loans for relatives. Is is often done     agreed on it in a contract. The basic principle is
without checking the financial situation of the   freedom of contract. In absence of contract, the
relatives. A majority of the legal cases cited    provisions of the Act on Interest Rates apply
above (item 18) dealt with such guarantees;       (see item 8).##
the claim was that the investigation of
creditworthiness was not carried out properly
with respect to the guarantor.
                                             27                                                  28
Are there restrictions concerning the repayment of     What are the preconditions of a creditor for
debts in default? #i#i.e. anatocism, compounding       early termination of a consumer credit
                                                       contract?
of payments to the principal first, separate account
for default interest?                                  i.e.: number of instalments due, amount due,
                                                       time elapsed between default and cancellation,
                                                       restricted to certain other reasons?


#The interests on arrears may not be more              In § 13 KSchG the so-called date loss is
than 5% over the agreed upon interest rates            regulated. A creditor may require a premature
(see § 6 Exp. 1 Number 13 KSchG).#                     fulfilment only if he already fulfilled his
                                                       obligations, the consumer is in default for at
                                                       least six weeks and the creditor reminded the
                                                       consumer unsuccessfully under menace of the
                                                       date loss and under setting a deadline of at
                                                       least two weeks.#
#The law provides that payments must be            The lender may not withdraw from the
allocated prioritising payment of the principal.   consumer credit agreement unless the
#Moreover, interest on arrears can only be         consumer is at least two months in arrears or in
calculated in relation to the capital element of   arrears of an amount equivalent to 20% of the
unpaid monthly instalments (in the case of         total outstanding sum.#
simple arrears) or on the outstanding amount,
being the amount required to repay the
element of capital not yet repaid (where the
loan is cancelled).##




No###                                              #According to general principles of law the criteria
                                                   is: fundamental breach of a contractual obligation.
                                                   #As far as the consumer‟s non-fulfilment of payment
                                                   obligations is concerned the Consumer Credit
                                                   Agreements Act § 29 specifies this general principle
                                                   to the effect that the delay must exceed 30 days and
                                                   that the amount due must be at least 10% of the
                                                   total debt, (or 5% if it consists of more instalments
                                                   or all the remaining debt).#
#No.#   The creditor can, by agreement, for reason of
        the consumer‟s delay in payment or another
        breach of contract, have the right to claim an
        instalment that has not otherwise matured. The
        creditor may enforce such a right only if the
        payment has been delayed by at least one
        month and is still outstanding. The amount, in a
        lump-sum credit, must be at least 10 per cent
        or, if it concerns more than one instalment, at
        least five per cent of the original amount of the
        credit or, in the case of a goods-or-services-
        related credit, of the credit price or if it
        concerns the total remaining claim of the
        creditor. The creditor have same right even if
        the other breach of contract by the consumer is
        essential.
#For consumer credit, see art. L311-30 of the            Article L313-12
Code de la Consommation
L311-30 "En cas de défaillance de l'emprunteur,             L'exécution des obligations du débiteur peut
le prêteur pourra exiger le remboursement                être, notamment en cas de licenciement,
immédiat du capital restant dû, majoré des               suspendue par ordonnance du juge d'instance
intérêts échus mais non payés. Jusqu'à la date           dans les conditions prévues aux articles 1244-1
du règlement effectif, les sommes restant dues           à 1244-3 du code civil. L'ordonnance peut
produisent les intérêts de retard à un taux égal         décider que, durant le délai de grâce, les
à celui du prêt. En outre, le prêteur pourra             sommes dues ne produiront point intérêt.
demander à l'emprunteur défaillant une                      En outre, le juge peut déterminer dans son
indemnité qui, dépendant de la durée restant à           ordonnance les modalités de paiement des
courir du contrat et sans préjudice de                   sommes qui seront exigibles au terme du délai
l'application des articles 1152 et 1231 du code          de suspension, sans que le dernier versement
civil, sera fixée suivant un barème déterminé            puisse excéder de plus de deux ans le terme
par décret."                                             initialement prévu pour le remboursement du
                                                         prêt ; il peut cependant surseoir à statuer sur
#For home loans, see art. L312-22 of the Code            ces modalités jusqu'au terme du délai de
de la Consommation# Article L312-22                      suspension.
   En cas de défaillance de l'emprunteur et lorsque le
prêteur n'exige pas le remboursement immédiat du         The law only precises that the creditor can
capital restant dû, il peut majorer, dans des limites    require from the debtor the early termination if
fixées par décret, le taux d'intérêt que l'emprunteur
                                                         there is a default of paiement ("défaillance de
aura à payer jusqu'à ce qu'il ait repris le cours
normal des échéances contractuelles. Lorsque le          l'emprunteur") but the text and the
prêteur est amené à demander la résolution du            "jurisprudence" don't precise exactly in which
contrat, il peut exiger le remboursement immédiat        conditions the creditor can exercise this right
du capital restant dû, ainsi que le paiement des         (first date or more).
intérêts échus. Jusqu'à la date du règlement effectif,   Meanwhile, we can suppose that a judge (if
les sommes restant dues produisent des intérêts de       there is a constestation of the debtor) will
retard à un taux égal à celui du prêt. En outre, le
                                                         eventually refer to the concept of
prêteur peut demander à l'emprunteur défaillant une
indemnité qui, sans préjudice de l'application des
                                                         "characterized incident of paiement" , concept
articles 1152 et 1231 du code civil, ne peut excéder     used in the law concerning the "fichiers FICP "
un montant qui, dépendant de la durée restant à          and the "caution".
courir du contrat, est fixé suivant un barème            Concerning the "caution", the characterized
#The creditor is not allowed to charge interest   Since 1 January, 2002 the creditor has two
on default interest (anatocism, § 289, sub-       rights for termination without notice:#1) The
para.1 BGB). #This prohibition does not exclude   debtor's financial circumstances or the value of
a claim for damage caused by default (§ 289,      his collaterals deteriorate considerably or this
sub-para.2 BGB). In case of consumer credit       situation threatens, which might endanger the
the admissible compensation may not exceed        credit repayment (§ 490, para.1 BGB).#2) In
the statutory interest rate of 4 % p.a. (§ 497,   case of instalment credits the debtor has to be
para.2, sub-para.2 BGB). #Partial amounts the     in default with a minimum of 2 instalments
debtor will pay have to be charged against#-      (wholly or partly) or with a minimum of 10% of
cost of bringing an action,#- amount due and#-    the nominal amount (5 % in case of duration of
interest.#This chronological order is mandatory   more than 3 years) (§ 498, para.1 BGB). #The
(§ 497, para.3 BGB). #Default interest have to    relationship between both regulations and the
be booked on a separate account (§ 497,           legal consequences of § 490, para.1 BGB are
para.2, sub-para.1 BGB).#§ 497 BGB does not       disputed. It is for example unclear whether a
apply to mortgage loans.#                         creditor may terminate without notice due to
                                                  the debtor's unemployment or insolvency of his
                                                  employer? The German (Savings) Banks,
                                                  anyhow, have already incorporated the wording
                                                  of § 490, para.1 BGB into their general terms
                                                  and conditions.#Consumer organisations and
                                                  related legal experts therefore demand, that
                                                  early termination according to § 490, para.1
                                                  BGB assumes that the requirements set by §
                                                  498, para.1 BGB are satisfied. The jurisdiction
                                                  must be waited for.#


#none#                                            A regulated consumer credit agreement must
                                                  be in default. This defaut may relate to any of
                                                  the conditions of the agreement#For other
                                                  credit agreements the creditor must give 7 days
                                                  notice.#The Banking Code requires that
                                                  termination of any acount is done on 30 days
                                                  notice#
#YES, please not the following restrictions #1)        ) Being in default is according to general
ANATOCISM FOR CONTRACTS CONCLUDED                      clauses of civil law the precondition for early
BEFORE 1998-Credit contracts may provide that          termination of a consumer credit contract.
interest in default is anatocised after the first      Credit contracts usually provide for the
day of default every 6 months (or longer period        conditions which would justify early termination
if agreed-smaller period is forbidden)-Law             of the contract. The most common wording
2601/1998 art.12 par.1). The first day of              would be "The bank may terminate this
default may be either defined in particular in         agreement in case of any breach of any clause
the contract or be the first day after notice in       of this agreement by the client". As far as
writing by the bank.#b) If there is no                 default of financial obligations is concerned,
agreement in the credit contract regarding             credit contracts provide for a specific number of
anatocism, then anatocism may take place               instalments due as a precondition for such early
according to the general provision of art.296          termination. In many consumer credit contracts
and art. 110-110 of the Introductory Law to the        it is provided that even one instalment due or
Civil Code. Art.296 provides that interest on          part of one instalment due, or any other charge
interest may be paid only if agreed or only after      due is sufficient for the cancellation of the
issuing proceedings.But in both cases the              contract. Such a term in a credit card contract
interest due may refer to a period of one whole        (one instalment due) has been judged as unfair
year at least. As an exception to this rule,           by Decision 1219/2001 of the Supreme Court
art.111 of the Introductory Law to the Civil           (see above under 8). Moreover, the Ministry of
Code provides for the possibility of anatocism         Development has issued a recommandation in
every six months - but this is not relevant to         1999 towards the banks, according which the
consumer contracts.#As a result, consumer              number of instalments due before an early
credit contracts may provide a 6 months                termination of a credit contract should not be
anatocism. If they do not provide for                  less that three (3).
anatocism, anatocism may take place every 12
months. #2)ANATOCISM FOR CONTRACTS
CONCLUDED debts in default##A licensed
Restrictions re AFTER 1998#Law 2601/1998               Early termination##A consumer in breach of an
moneylender, according to S.112 of the CCA 1995, is    agreement (by default in payment for example)
prohibited from increasing charges on default.         must be given 10 days notice of any intended
Otherwise, there are no legislative restrictions
                                                       action that might be taken by the creditor. The
concerning payments in default. Default (or penalty)
compound interest is common in credit agreements       notice must set out details of the agreement
in Ireland running as high as 2% interest on arrears   sufficient to identify it and the relevant breach,
per month in some car finance hire purchase            together with what can be done by the
agreements. Equally, it is not uncommon for some       consumer to remedy this. A consumer also has
mortgage lenders to charge significant default         21 days (including this 10 day period) to put
interest. ##It is our view that the Unfair Terms in    matters right by bringing the agreement up to
Consumer Contracts Regulations (the Irish version of
                                                       date, for example by paying instalment arrears
the directive does not exclude financial services)
could be used to challenge unduly punitive default
                                                       and interest (S. 54 Consumer Credit Act 1995).
interest but the machinery is inadequate at present.   Only when this period elapses may legal action
Finally, the common law rule against extortionate      be taken by the creditor to enforce the
credit bargains might be raised##                      agreement.##If a creditor wishes to bring an
                                                       agreement to an end prematurely on the
                                                       occurrence of some event permitted by the
                                                       agreement (for example, inaccurate information
                                                       supplied by borrower), 10 days notice must be
                                                       provided to the borrower of the action to be
                                                       taken by the creditor.##These rules apply to all
                                                       agreements regulated by the CCA except
                                                       housing loans######
#Under artt. 1193-1194 c.c., payments               Under artt. 1819-1820 c.c. (on the matter of
discharge debtor first relative to interests, and   loan), debtor's default relative to rate interest
after principal; if debtor has many loans,          or one sole instalment is sufficient to induce
payment discharge first expired debt; if every      early termination (therefore lender can make
debt is expired, first loan with less guarantees;   immediately an application for the repayment of
if every debt has same guarantees, first loan       the principal).#Under art. 1186 c.c., early
less burdensome for the debtor; otherwise, the      termination (in the sense of immediate duty to
oldest, and finally every debt pro quota.#Under     repaid) is possibile in the case of debtor who
art. 1283 c.c., anatocism is possibile only after   became insolvent (see above for further
an application to the court, and interests must     explanations).#Under art. 1525 c.c. (selling
be due during six months; Supreme court has         with ownership of the seller since discharge),
sentenced the voidness of all clauses in bank       default relative to one sole instalment is not
current account contracts about anatocism           sufficient, but it's necessary that debtor default
(that have gone in opposite direction, during       1/8 of the entire price. This rule apply also to
many years, and inclosed anatocism, only in the     all consumer credit contracts in which there are
behalf of bank, every three months), beacuse        securities over selled goods: art. 125 T.U. banc.
there are no real customs in that way; further      (see in attachment); under this rule only
under Rule Cicr 9.2.2000 (see in attachment)        consumer can terminate the contract without
these contracts have now to inclose anatocism       penalty (that's a mandatory rule); in this case,
for both parties, client and bank.#Clauses          price must be reduced upon equity.
about anatocism are void even if they are
inclosed in bank loan contracts (Cass.,
20.2.2003, n. 2593, that's not even
published).#




#Where a loan is cancelled, standard interest is    Te Law of 9 August 1993 provides that:#Any
replaced by the interest payable on arrears.        clause authorising the lender to demand
The charge on payments arises on the reduced        immediate payment of instalments due or
sum with a quarterly calculation of interest.       which provides for an express avoidance clause
Interest not paid on instalments is added to the    is prohibited and taken as not incorporated into
principal and is due on the delayed payment by      the agreement unless it stipulates that#1)
operation of law without notice at the same         where the consumer is in default in respect of
rate of interest as the principal.##                payments due by at least two payments or a
                                                    sum equivalent to 20% of the total amount to
                                                    be repaid and this would not be given effect
                                                    until one month following postage of a letter
                                                    containing notice of the payments due #2)
                                                    where the consumer would dispose of the
                                                    goods prior to payment of the price or would
                                                    use them in a manner contrary to the
                                                    provisions of the agreement, and the lender
                                                    had retained title to the goods.#
#Article 34 b WCK The costs in event of default     #See article 33 c WCK. Conditions are: backlog
may be charged after serving notice upon the        of two months, debtor will leave or has left the
debtor. There has to be given a certain time        Netherlands, death of debtor, bankruptcy,
limit during which the debtor can meet his          embezzlement of the financed object, inaccurate
obligations. When the debtor, after the time        information given by the debtor.#
limit has passed, still has not complied, default
costs may be charged.#                              article 33 sub c regulates early termination by the
                                                    creditor: He may require
                                                    full payment, if:
                                                    - de debtor is two months in arrears, and after an
                                                    official notice of delay
                                                    - the debtor has left the country or is plamnning
                                                    to do so in the coming months;

                                                    - the debtor ihas died and the the estate is not
                                                    able to pay back what is due;
                                                    - the debotor is bankrupt
                                                    - the debtor has sold the securiy collateral
                                                    - the debtor has given false information when
                                                    asking for credit




#Art. 560 of the Civil Code provides for            Under the general terms of contractual liability,
compound interest (anatocism), and art. 561         a creditor can terminate a credit contract early
provides for the autonomy of interest credit in     due to the debtor's non-fulfilment of the
relation to the principal; each of these can be     contract. (art. 483 and art. 1150 of the Civil
independently granted or terminated.#               Code).
#The non payment of a debt breaks the              The financial institution can cancel a loan with
conditions of a contract. In this case, the        the non payment of any installment. This clause
creditor can demand the fulfilment or resolution   for early termination is understood to be valid,
of the contract, and in both cases with the        even if there is already a non fulfilment on
possibility of claiming for the lost years and     behalf of the lender, although with the
damages suffered. This control or anticipated      comments expressed in the previous question.
termination of the contract can normally de
applied under any type of non-fulfilment of the
contract on behalf of the debtor, but it is best
to interpret clauses in the overall context of
each case; it is not the same that one delay
with a payment in a long term contract (20
years for example) is sufficient to warrant the
immediate payment of the rest of the loan,
which would cause great harm to the
borrower.##When the obligation is to pay an
amount of money for damages, and there is no
previous pact, the payment will be those
interest rates agreed, and in the case of no
agreement it is the legal rate. Frequently the
agencies offering credit charge very high
penalty rates (up to 29%) and just as
frequently the courts rule against them for
applying abusive clauses, reverting to the legal
interest of 2.5 times the rate for current
account overdrafts (art. 19 of Law 7/95,
#No, not really. The court may declare that a      This is regulated in sections 20 to 24 of the
debt is enforceable in full. The Debt              Consumer Credit Act. They permit early
Enforcement Act, however, contains provisions      termination of a consumer credit in the
for the enforcement stage to the effect that       following cases:##1) The payment is in default
the debtor may keep what is absolutely             for more than a month and exceeds ten per
necessary for daily living. #                      cent of the credit or two instalments are in
                                                   default which exceed five per cent of the
                                                   credit.#2) the payment is in other way
                                                   substantially delayed. ##3) Security for the
                                                   credit has substantially decreased in value.#4)
                                                   It is obvious that the debtor, by evading, losing
                                                   property or acting in some other way, avoids
                                                   repayment.#In all the cases it is required that
                                                   the creditor has in the contract retained the
                                                   right to early payment. #If the creditor wants
                                                   to exercise the right to claim payment he must
                                                   give notice of early termination of the contract
                                                   four weeks in advance. If the debtor pays the
                                                   instalments due during this period, he is not
                                                   liable to pay the rest of the credit in advance.
                                          29                                                30
What steps has the creditor to take before early Are intermediaries regulated?
termination of the consumer credit contract?#
                                                 Is their role regulated under general or special
                                                 law?#Does this law regulate maximum fees,
                                                 fees in case of unsuccessful intermediation
                                                 etc.?#



#See question 28#Reminder under setting a        yes; #Regulations exist in Part 4
two-week respite.#                               (Personalkreditvermittler) in the Broker Law in
                                                 §§ 33ff (see enclosed Maklergesetz.pdf).
                                                 #Regulated are: #Minimum contents of the
                                                 contract#Duration of the contract #Collection
                                                 activity of the intermediary#Inadmissible
                                                 remuneration #Duties of the mediator to supply
                                                 information#These regulations are however
                                                 toothless, since no sanctions are written in the
                                                 law. #In the "regulation against the
                                                 exploitation of credit-requesters from 1933"
                                                 remunerations are held for excessively, if for
                                                 the mediation the intermediary gets more than
                                                 2% of the loan amount. The remunertions can
                                                 be reclaimed in § 4 so far as it is excessiv in
                                                 relation to the achievement of the creditor or
                                                 the intermediary (see enclosed
                                                 Kreditvermittler.pdf).#
#The lender must put the consumer on notice,         yes; #The law provides that:#- intermediaries
in the form of a letter sent by recorded             of loans must be registered with SPF Economie
delivery, to pay within a month, reminding the       ;#- the consumer cannot be charged for any
consumer of the consequences of failure to do        element of the intermediary's fee#- payment of
so. The consumer then has a month to repay           commission by the lender is spread over the
missed instalments. The lender may only              term of the agreement.#
cancel the consumer credit agreement upon the
expiry of this period.#




#The requirements mentioned in answer to question    no
28 are not supplemented by requirements concerning
notice or the like.#
#The creditor must give a notice of maturity      no
and wait. The maturity cannot enter into force
earlier than four weeks or, if the consumer has
earlier been reminded of the delay or other
breach of contract, not earlier than two weeks
from the date on which the notice of maturity
was given or sent to the consumer. If the
consumer, within this period, pays the delayed
amount or remedies the other breach of
contract, the maturity shall lapse.#
#The debtor must have been subject to an   yes; #Article 65 to 71 of the Banking Law n°84-
order under L1230 of the Civil Code.#      46 of 24 January 1984##
#1) § 490, para.1 BGB states no further steps      yes; #Credit intermediation is regulated under
the creditor has to take. #2) § 498, para.1 BGB    §§ 655a-e BGB (or §§ 15-17 VerbrKrG applying
demands a minimum time limit of 2 weeks to         to contracts signed before 1 January,
settle the outstanding payments together with      2002).#These provisions do not regulate
the notice that the creditor will accelerate the   maximum fees. Their legality is subject to the
total remaining debts otherwise.#                  general provision of § 138 BGB ("good faith"
                                                   and "usury").#The remuneration is dependant
                                                   on the successful intermediation.#




#The Creditor in a regulated credit agreement    yes; #Intermediaries may require a Consumer
must serve a default notice, identifying the     Credit Licence in order to operate, but
default and requiring that it be remedied giving otherwise are governed by the contract
time for that to be done of at least 7 days#     between them and either the debtor or the
                                                 creditor using their service.#
#There are no particular provisions in the law     yes; #The only legal provision concerning
for early termination in the case of consumer      intermediaries specifically in bank transactions
credit contracts. According the general            is article 12 of Joint Decision F1 983-1991
provisions of our Civil Code, unless otherwise     (please see in detail above under 7), according
provided in the contract, the creditor should      which intermediaries must be registered at the
announce early termination in writing referring    Chambers of Commerce and Industry of each
to the reason of such early termination. Most      region, to which they notify this activity. The
contracts provide that such a notice is not        Chamber of Commerce and Industry establishes
needed. In practice, though, creditors do notify   a list of the intermediaries registered, which is
consumers in writing of the early termination of   accessible to anyone interested. The above
the credit contract making reference to the        procedure is supervised by the Minister of
amount due at the time of such early               Development. The administrative control is held
termination.#                                      either ex officio or after request of anyone who
                                                   proves to have a legal interest. For each breach
                                                   of the above duties a fine up to 60.000 euro is
                                                   imposed, which can be doubled in case of
                                                   relapse.#There is unfortunately no special and
                                                   more detailed regulation on this matter. For the
                                                   rest, one must have recourse to the general
                                                   provisions of the Civil Code on intermediaries
                                                   (art.703-708), as well as to the Banking Code
                                                   of Conduct (articles 91-100).#According to art.
                                                   703 of the Civil Code the fee of the
                                                   intermediary is only paid if the contract is
                                                   concluded due to the intermediary's indication.
                                                   No maximum fee is provided in the law.
                                                   However, if the fee agreed is proved to be
See above                                          grossly exorbitant the court can Intermediaries
                                                   Regulation of Intermediaries##Yes. upon the
                                                   are regulated under the Consumer Credit Act. Credit
                                                   intermediaries are regulated by S.144-148 of the
                                                   Act. Mortgage intermediaries are regulated by S.116-
                                                   121. Insurance and investment intermediaries are
                                                   regulated under separate legislation.##Both credit
                                                   and mortgage intermediaries have to have an
                                                   authorisation (currently decided by the Office of the
                                                   Director of Consumer Affairs) and must display their
                                                   authorisation at their business premises. ##Credit
                                                   intermediaries (the most common example being car
                                                   dealers) must have a letter of recognition from each
                                                   undertaking they act for and they must specify the
                                                   nature of the finance that is being arranged to the
                                                   consumer in writing before the agreement is entered
                                                   into (S.148). They must also disclose the fact that
                                                   they are in receipt of some form of consideration
                                                   from the institution for whom they act.##Mortgage
                                                   intermediaries must also have an appointment in
                                                   writing from each undertaking for whom they act but
                                                   there does not appear to be any obligation to
                                                   disclose the fact that they may receive a commission.
                                                   ##Both must pay fees in order to obtain their
                                                   authorisation but there is no regulation of any fees
                                                   that they may charge themselves. In practice, any
                                                   fees they would charge would be to the institution for
                                                   which they act rather than the consumer. On the
                                                   other hand, mortgage brokers who do charge
                                                   consumers fees for arranging mortgages are at
                                                   present unregulated although there is a proposal in
                                                   the legislation establishing IFSRA (See point 4) to
                                                   regulate them.##
#Under art. 1819 and 1186 c.c., creditor with         yes; #There are special laws about "agenti in
written proofs of the contract and default just         attività finanziaria", similar to agency, (see art.
have to make an application to the court, who           1, par. 1 n), 3, d. lgs. 25.9.1999 n. 374, d.m.
can order early payment, even without hearing           13.12.2001, n. 485, both in attachment), which
the debtor (in Italy this is named "decreto             stipulate loans on behalf of subjects regulated
ingiuntivo": see art. 633 c.p.c.); but he can           in art. 106 T.U. banc. (see in attachment),
make opposition).#Under art. 1820 c.c., lender has      without any independence about fees and other
to make an application to the court for obtain          terms.#Furthermore there are "mediatori
dissolution of the contract (but contract can inclose a creditizi", similar to brokerage contract, under l.
clause, under which dissolution is automatic, if        7.3.1996, n. 108 (c.d. anti-usury Act), art. 16,
creditor informs the debtor about his willing: art.
                                                        and d.p.r. 28 luglio 2000, n. 287 (both in
1456 c.c.; alternately creditor can order fast
payment by written to the debtor: if debtor don't       attachment), that make counselling in the field
pays, there will be dissolution: art. 1454 c.c.;        of loans, and find lenders to people who's
otherwise, it's necessary that judge recognizes         looking for money.#All these operators have to
default as "important" under art. 1455 c.c.).#          ask for registration in public registers.#In order
                                                        to fees and other terms, rules about
                                                        "transparency" (which concern first banks)
                                                        apply (artt. 115 ss. T.U. banc., see in
                                                        attachment).#




#The creditor may not cancel the loan except  no#There is no specific legislation relating to
where the borrower has failed to pay the      credit intermediaires. The provisions of the Law
outstanding amount one month after postage of of 9 August 1993 and company law apply.##
a letter containing notice.##
#first a summons#                                   The credit grantor is responsible for the
                                                    intermediairies that he uses#




#Credit institutions take the following steps:#-    no
first delay in payment - letter to debtor
reminding him of outstanding payment;#-
second delay in payment - registered letter to
debtor (and garantors, if applicable) giving a
deadline for settlement of debt;#- third delay in
payment - a petition is send to court to seek
termination of contract, settlement of
outstanding payments and of all instalments,
interest and damages.#
#The only requirement to claim is the non-          yes; #There are no non-regulated financial
payment by the debtor. Once the extrajudicial       activities in Spain. The financial institutions are
demand is made the debtor is considered a bad       banks, building societies and credit unions, the
debtor. If the debtor does not pay what is          only ones authorized to issue credit from their
demanded the court ruling can be for the total      reserves of the public funds. There are also
of the debt (capital plus interests accrued up to   credit agencies which, although are authorized
the date of the demand, bearing in mind the         to give loans, cannot receive money from public
thoughts expressed in question 28).)#               funds. ##Loans are negociated directly with the
                                                    financial institutions. Perhaps in cases where an
                                                    estate agency looks for finance on behalf of a
                                                    buyer, the ultimate lender is also the financial
                                                    institution. Regarding personal loans, the only
                                                    intermediary is the seller, who passes the loan
                                                    petition on to the financier. #




#see item 28.#                                      no
                                            31                                                  32
Is there an effective supervision of skills and    Is there a special liability for intermediaries in
practice of intermediaries?                        credit transactions?




#The practice of the trade of the personal loan    no##
intermediary is a trade, for which a certificate
of competency is necessary in accordance to
the regulation for the mediation of personal
loans and fortune consultation (see enclosed
Kreditvermittlerverordnung.pdf).#
#The Inspection Economique has recently          yes; #When the new Law comes into force, loan
conducted a survey of intermediaries which has   intermediaries will have the same duties as the
led to withdrawal of registration of             lender to check the consumer's solvency, with
intermediaries who were using illegal methods    the exception of the duty to consult the
such as splitting loans.#                        Centrale des Crédits aux Particuliers.#




##                                               no##
#   #   no##
#The agent must have a mandate from a credit     no#The credit institution is liable.##
institution and provide proof of a financial
guarantee specifically earmarked to repay sums
entrusted to him/her. ##
#Credit intermediation is a regular subject of       no#The general principles as "breach of duty
the jurisdiction. The questions of law refer to      prior to contract" (culpa in contrahendo) and
problems like "constructive notice", "violation of   "positive violation of contractual duty" (posivite
the Federal Legal Advice Act", "usury". The          Forderungsverletzung) will apply. If the
market of credit intermediaries is, however, still   intermediary has neglected his duty to inform
"a market of black sheeps".#The regulations,         and to advice, he is liable for damages.#
mentioned in the answer to question 30, are
not sufficient for an effective supervision. #The
advertising of intermediaries is aggressive and
misleading ("credit without SCHUFA-inquiry",
"debts are no obstacle"). #A working group
established by debt counsellors, called "Working
group loan sharks", observes the behaviour of
credit intermediaries. The working group
informs the Federation of German Consumer
Organisations (vzbv) about conspicious
behaviour. The vzbv will decide to suit
intermediaries.#




#Only that which exists in the contract between      no#    #
the parties#
#There is no effective supervision of the skills no#There is no special liability for
and practice of intermediaries, apart from the   intermediaries in credit transactions.#
fine which is imposed by the Minister of
Development in case they have not registered
themselves.#Only in the Banking Code of
Conduct, which as mentioned above is not
legally binding, it is stated that the
intermediaries must meet some standards, such
as: capacity to contract, completion of 12
years school education, no criminal record
regarding financial crimes and independence
form the bank's service as active employee. A
written contract between the bank and the
intermediary is also essential. Upon signing the
contract the bank must check all the above
preconditions that the intermediaries or their
employees should meet. The terms of that
contract along with the determination of the
remuneration of the intermediaries should be
announced also to the Hellenic Bank
Association, where a confidential file of such
contracts is kept.      #




Supervision of Intermediaries##At present both         Item 32 – Liability of Intermediaries##If the
intermediaries are regulated and supervised by the     intermediary is a party to the agreement in the sense
Office of the Director of Consumer Affairs although    that they have been responsible for the provision of
mortgage intermediaries will be taken over by IFSRA    goods or services (i.e. a car dealer or a furniture
and credit intermediaries may be. ODCA has done a      showroom) but not for supplying the credit, they will
good job with a skeleton staff but there is no doubt   be liable for the condition of the good+K64s. ##In
that extra resources would help to provide more        general, even where goods or services are bought on
effective supervision. ##                              credit, the consumer must take the matter up with
                                                       the seller or supplier. ##An exception to this is
                                                       Section 80 of the Consumer Credit Act 1995 (which
                                                       repealed s32 Sale of Goods and Supply of Services
                                                       Act 1980). This provides that persons (for example
                                                       credit institutions) involved in arrangements to
                                                       facilitate a purchase of goods on hire purchase shall
                                                       be jointly and severally liable with the owner for any
                                                       breach or misrepresentations made with regard to
                                                       the agreement. Hence where goods have been
                                                       purchased by a client in such a fashion and these
                                                       turn out to be faulty, s/he has the right to look to
                                                       either the owner or the credit provider for suitable
                                                       redress (such as a refund/replacement/repair)
                                                       depending on what is reasonable in the
                                                       circumstances.##A further exception is provided by
                                                       s14 Sale of Goods and Supply of Services Act 1980,
                                                       the effect of which is to make finance houses jointly
                                                       and severally liable with the seller in respect of
                                                       personal loans, where there is a breach of contract or
                                                       misrepresentation.##Under the Consumer Credit
                                                       Act, credit intermediaries must specify the nature of
                                                       the finance that is being arranged to the consumer in
                                                       writing before the agreement is entered into (S.148).
                                                       Failure to so do, is a summary offence under
                                                       S.12.###
#See the preconditions of "Agenti in attività        yes; #Breach of good faith (art. 1375 c.c.) for
finanziarie" in art. 3 d. lgs. n. 374/1999 (and      both operators; duty to disclose to the parties
art. 3 d.m. n. 485/2001); in order to "mediatori     well-known relevant circumnstances, in order to
creditizi", see art. 4 d.p.r. 287/2000; it is high   the safety of operation (art. 1759 c.c., which
school, and honourableness under art. 109 T.U.       apply to "mediatori creditizi"); if supplier of
banc. for bank managers.#These operators             goods or services defaults, and he has, by a
cannot carry on other business (only                 contract, to act solely with one lender (similar
instrumental).#In the case of breach of legal        to sole agency, but it's very rare), consumer
duties, or if preconditions cease, registration      can sue against the lender, but only for the
will be erased (art. 6 d.m. n. 485/2001 and          amount of the loan (art. 125 par. 4 T.U.
d.p.r. n. 287/2000).#                                banc.).#




#see reply to question 30.#                          see reply to question 30.#
#not applicable#   no, not applicable#




#Não#              no##
#As mentioned, the offering of finance is mainly no##
dealt with directly by the credit institutions, the
only ones permitted by law to do so.##All this
activity is overseen by the Bank of Spain which
acts in total diligently in this area. Regarding
the banking practices of its clients it
concentrates on the application of the old
Complaints Procedure (now called the
Commission for the Protection for Clients of
Financial Services), and can sanction where
there is non-compliance. #




##
                                           33                                                34
Is there any specific regulation for other forms   Is there a general provision in your law used by
of consumer credit?                                the courts actively to cope with problems of
                                                   overindebtedness through in credit
Examples for other forms of consumer credit:       transaction?
overdraft, payment facilities, mail order credit
etc.                                               i.e.: good morals; social force majeure, bona
                                                   fide?


yes; #In § 43 Banking Law there are minimum        no
contents for consumer current account
contracts, in the Consumer Credit Regulation
there are minimum contents for financing
leasing contracts (see enclosed
VerbaucherkreditVerordnung.pdf).#
yes; #There is also a maximum interest rate     no
applicable to amounts borrowed through
overdrafts, set at 14%. Where the borrower
exceeds the overdraft limit, this rate may be
enhanced by a factor of 10% (Law of 14 May
2001, art. 3).##




no##                                            no
yes; #Act of instalment (1966/91) including for   yes; #Social force majeure in Consumer
example regulations about social force            protection act: The consumer‟s illness,
majeure.#                                         unemployment or another corresponding reason
                                                  that is not attributable to him prevent the
                                                  creditor to use her right to early
                                                  termination.      #
no##   yes; #Good faith is required at the time the
       debtor approaches the overindebtedness
       commission and not at the time s/he entered
       into the credit agreement. In return, the
       commission and the judge must investigate
       whether the loan was granted with due care.#
no#All forms of consumer credit that are        no
subject to regulation are regulated under the
Consumer Credit ACt 1974#
yes; #Please note the existing restrictions set by yes; #General provisions of our Civil Code are
Acts of the Governor of the Bank of Greece in           being in many cases applied by the courts in
the following forms of consumer credit: #a)             proceedings issued by debtors against creditors.
personal loans may be agreed and granted of a           These provisions are:#1) Art. 281: Abuse of
maximum sum of 3000 euros. Every person can             right (for the exact wording of the article-please
have only one such a loan. This is why the              see above under 8).#2) Art.288 : Same
applicant of such a loan has to sign a statement        wording as art.242 of the german BGB : Der
towards the bank that he has no dept of a               Schuldner ist verpflichtet, die Leistung so zu
similar kind of credit toawrds another bank.#b)         bewirken, wie Treu und Glauben mit
Overdrafts cannot exceed the sum of 8804                Rucksichket auf die Verkehrssitte es erfordern.
euros.#c) The so-called "credit loans" which are        #3) Art.178 and 179: Same wording as art.138
given only for purchase of consumer goods may           German BGB : Ein Rechtsgeschaeft , das gegen
be granted up to a sum of 23.500 euros.This             die guten Sitten verstoesst, ist nichtig. Nichtig
maximum sum should include any other loan of            ist insbesondere ein Rechtsgeschaeft, durch das
category (a). #Please also note there are               jemand unter Ausbeutung der Zwangslage, den
discussions going on concerning the                     Unerfahrenheit, des Mangels an
abolishment of the afore-mentioned                      Urteilsvermoegen oder der erheblichen
restrictions, which is highly possible to see           Willensschwaeche eines anderen sich oder
happenning.#                                            einem Dritten fuer eine Leistung
                                                        Vermoegensvorteile versprechen oder
                                                        gewaehren lasst, die in einem auffaelligen
                                                        Missverhaeltnis zu der Leistung stehen. #




Other forms of consumer credit##See point 1 for         Over indebtedness##There are no general conditions
specific criteria that apply to different forms of      in terms of the examples specified in the question.
lending (credit sales, credit cards, overdrafts, cash   The Irish legal system in relation to debt
loans, moneylending agreements including mail           recovery/enforcement is in drastic need of reform
order) under the Consumer Credit Act.##Credit           and modernisation to reflect developments in Europe
Union loans are not classed as consumer credit -        and beyond. (See forthcoming FLAC report – Item 2
they are regulated under the Credit Union Act           – Relevant literature
1997.##
no##                                               yes; #There are art. 1375 c.c. (good faith, on
                                                   this subject see above), and 1467 c.c., under
                                                   which there's a dissolution of the contract if the
                                                   unpaid debt becomes, after stipulation,
                                                   excessive, because of new, extraordinary and
                                                   unforeseeable circumstances; but according to
                                                   an opinion, this rule don't applies to loan;
                                                   finally, under art. 1448 c.c., contract made in
                                                   straitened circumstances is void.#




yes; #There is draft legislation n° 4781 on the    no
protection of consumers in relation to mail
order credit, repealing article 7 of the Law
amended on 25 August 1983 on the legal
protection of consumers, which has just been
voted in by Parliament on 13.03.03, but which
has not yet been published. A copy of the
approved legilsation is attached, but it has not
yet come into force.#There is also the Law of
14 August 2000 in relation to e-commerce
amending the Civil Code, the new civil
procedure code, the commercial code, the penal
code and transposing Directive 199/93 in
relation to a communications framework for
electronic signatures, the Directive relating to
certain legal aspects of services in the
information society, certain provisions of the
Directive 97/7/CEE concerning the distance
sales of goods and services other than financial
services.#These documents are attached.##
yes; #Doorlopend geldkrediet (art. 1f            no
WCK)#Doorlopend goederenkrediet (art. 1g
WCK)#Uitstaand saldo bij geldkrediet (art. 1h
WCK)#Uitstaand saldo bij goederenkrediet (art.
1i WCK)#Kredietvergoeding (art. 1 j WCK)##




no#The law regulating credit contracts states    no
the type of information to be given to
consumers when the contract is signed, and
throughout the duration of the contract in the
case of credit on current account and
overdrafts. (art. 13 and 14 do Decree-Law n.
359/91, of 21-9-91).#
yes; #The most important regulation concerns      yes; #Whilst not in consumer protection law,
mortgages, Order, 5th May 1994. The               there is the moderating opinion of the judges
Consumer Credit Law also refers to other areas,   when it comes to deciding on repayment
such as overdrafts. ##Spain is still waiting to   timetables based on the economic situation of
implement Directive 2002/65/CE, of                the debtor. It is the Payment by Installment
September 23rd 2002, concerning marketing of      Law, subsiduary application to that of
financial services aimed at the consumer          Consumer Credit, which states the following in
outside the financial boundaries. #               article 11: #<<The judges and tribunals will
                                                  exceptionally, and with just cause, use its
                                                  discretion in situations such as family tragedy,
                                                  unemployment, accidents at work, long-term
                                                  illnesses and other unfortunate situations, to
                                                  impose new installments or change the terms
                                                  and setting where necessary the surcharges of
                                                  the new installments. #Equally, penalty clauses
                                                  should also contain moderating clauses of
                                                  agreement in the case of early payment or non-
                                                  fulfilment by the buyer>>##Here we are
                                                  dealing with an old rule, as the Payment by
                                                  Installment Law, which was substituted by the
                                                  above, contained an identical clause.#




no##                                              yes; #    ##
                                          35                                                    36
Is there any specific regulation to protect       Is there any specific regulation to protect
consumers against cutting-off-policies by utility consumers against eviction by landlords?
companies?

Utility companies = energy supply companies,
gas or water or telecommunication supply
companies#


no##                                              yes; #Evacuation can be obtained only after
                                                  judicial asserting based on a court title. #The
                                                  judicial termination of rent contracts (also due
                                                  to payment in arrear) is regulated in the Rental
                                                  Law (Mietrechtsgesetz): #§ 33. (1) Rent
                                                  contracts can be quit only judicially. The
                                                  landlord has to state the reasons for
                                                  termination briefly in the termination; he
                                                  cannot make valid any longer other reasons for
                                                  termination in this procedure. If objections
                                                  against the termination are raised, the landlord
                                                  has to prove that the reasons for termination
                                                  made validly by him are given. Against missing
                                                  the period for the mounting of objections the re-
                                                  instatement into previous conditions according
                                                  to the regulations §§ 146 ff. ZPO is
                                                  permissible. #(2) If a tenant, who for the
                                                  reason of § 30 Exp. 2 Number 1 is quit and who
                                                  for the payment in arrear meets no rough
                                                  blame, pays before conclusion of the decision of
                                                  the court of first instance the owed amount of
                                                  the directly preceding negotiation, the
                                                  termination is to waive; the tenant has to pay
                                                  however the costs to the landlord, as far as
                                                  without its payment a cost obligation to
yes; #Where there are arrears of payments, the        yes; #Where the tenant has stopped paying
debtor may require maintenance of a minimum           rent, the owner can apply to the Juge de Paix.
level of electricity supply (so that the dwelling     The owner must first attempt to resolve
can be lit and there is sufficient power to           matters through conciliation before the Juge de
operate a refrigerator). ##                           Paix. The owner may only seek eviction if the
                                                      conciliation process fails. The owner cannot
                                                      evict the tenant him/herself without a court
                                                      order. The Juge de Paix may set a period for
                                                      payment to be made in order to avoid an
                                                      eviction.#In addition, a Law of 30 November
                                                      1998 provides that the Centre Public d'Aide
                                                      Sociale be informed prior to eviction and that
                                                      the tenant must be allowed a period of one
                                                      month in order to find alternative
                                                      accommodation.##




yes; #The terms of suppliers of gas and electricity   yes; #In case of the tenant's non-fulfilment of the
are under the supervision of the Energy Authority     payment obligation the landlord must give the tenant
who has brought about special notice requirements     written notice demanding payment within 3 days.
in the suppliers' contracts with consumers. #         Eviction is excluded if the tenant pays the amount
                                                      due within the 3 days.#
yes; #Some regulation exist to protect             yes; #According to the Act on Residental Leases
consumers.# If the house or a part of it are       the time for giving notice of discontinuance of
heated by electricity and the house or a part of   the contract is 6 months for the landlord. The
it are used as a permanent residence, the          landlord can even call off the contract if the
electicity can not be cut off during the winter    renter violates the agreement. The landlord has
before 4 months since the bill became due.#If      to give a warning and he has not the right to
the reason why the consument has not been          call off the contract if the renter stops to the
able to pay is some kind of social force majeure   breach against the contract.#For eviction the
(for example unemployment), the electricity        landlord must have a court decision. Then he
can not be cut off before 2 month gone. #We        can get assistance from the bailiff.     #
have same kind of regulation abouth social
force majeur on waterworks right to cut off
.    #
yes; #Supply must be maintained until the          yes; #To avoid eviction of the tenant for non-
debtor's file has been examined by a social        payment of rent, the judge may grant a period
body or a departmental solidarity                  for payment to be made. These renewable
commission.#see brochure "surendettement"          periods may extend to up to 2 years.#When
p:111, article 136 of the loi sur l'exclusion of   eviction is ordered, the tenant may still ask the
July 1998##                                        judge for time to move out. These periods are
                                                   renewable and may extend to up to three
                                                   years. #See INC leaflet "L'expulsion du
                                                   locataire") ##
          yes; #If the court makes an order for eviction it
          may grant the tenant a period of grace not
          exceeding one year (§ 721 ZPO - Code of Civil
          Procedure). #If the scope of § 721 ZPO is
          exhausted, the debtor may claim for protection
          from execution under § 765a ZPO. According to
          this general regulation the enforcement
          measure has to be suspended, if the eviction
          constitutes an unreasonable hardship.#




no#   #   yes; #Protection from Eviction Act 1977, but
          this only requires that the Landlord takes court
          proceedings in order to enforce any right of re-
          entry, and to obtain an Order for Posession.
          The legislation does not govern the grounds on
          which the Landlord may claim such right of re-
          entry, just its exercise.#
no#No, utility companies are free to cut off                No, there is no specific regulation to protect
consumers if in debt. The level of debt differs in consumers against eviction by landlords. The general
some cases according to the some categories of provisions of Civil Code apply.
consumers-e.g. people with special needs are
only cut off by the major telecom company in
Greece (OTE S.A.) for a debt of more than 1000
euros. It is nevertheless true that most former
public utility companies are sensitive in this
matter and are tolerant towards indebted
consumers.#




Utilities##There are no such provisions (though             Evictions##With regard to notices to quit in private
appointed Regulators act as watchdogs over the              rented accommodation, the Housing (Miscellaneous
general policies of privatised utilities) and some          Provisions) Act 1992 requires that the party ending
progress has been achieved in preventing cutting off        the agreement (normally the landlord) must give the
by utilities for non–payment of instalments in              other party (normally the tenant) advance notice of
relation to credit sale agreements as opposed to            their intention to end the agreement and of the date
supply of service. (For example, both the national          on which it is to come into effect. Under this Act, the
electricity and gas utilities are also major suppliers of   notice to quit must be in writing and served at least
appliances by way of credit sale).##                        four weeks before it is due to come into effect (Three
                                                            months notice is required on a quarterly tenancy).
                                                            There does not have to be a valid reason to
                                                            terminate the tenancy##Regulations under the Act
                                                            further require that the written notice must be signed
                                                            by the landlord or his lawful agent, must be dated,
                                                            specify the date on which possession is to be given
                                                            up, clearly describe the property and that the notice
                                                            is normally required to be personally served on the
                                                            tenant. Once a properly served notice to quit
                                                            expires, the landlord must still apply to the relevant
                                                            court for an eviction order if the tenant refuses to
                                                            leave. ##On the other hand, if the tenant has a
                                                            specific lease in writing, the tenancy can only be
                                                            #terminated in accordance with the terms of the
                                                            lease.##
yes; #Under art. 2597 c.c., monopolist must          yes; #See art. 6 l. n. 431/1998 (in attachment):
accept all proposals, and provide his services to    tenants can make an application to the court to
people that's asking for; according to artt. 1564-   obtain delay of the eviction, if there are
 1565 c.c., utility companies cannot refuse to       particular circumstances (for ex: they are very
supply his services suddenly if counterparty's       old, or ill, or family's members, and
default is not severe (for ex: default in summer     others).#Parliament often make specific Acts,
holidays); but under art. 1460 c.c., in general,     under which tenants can apply to the court to
creditor cannot refuse to pay in the case of         delay eviction, in a limited period of time. Under
counterpary's default, if this would be a breach     the last act (l. 23.12.2000, n. 388, modified the
of good faith; dissolution is possible only if       last time from l. 1.8.2002, n. 185: now the
supplier notices that default is very severe, and    deadline is 30.6.2003), delay is automatic, if
he cannot take on client anymore.#There are          there are very old people, or severly
public independent Authorities which control         handicapped persons, who live in the house, or
utility companies (for ex: electrical or gas         if tenant hasn't sufficient income (to find
utilities: see www.autorità.energia.it;              another house); landlord have to apply to the
telecommunications: www.agcom.it; in                 court if he doesn't agree. However there are
websites are inclosed rules and legislation).#       very strong discussions about these Parliament
                                                     conducts, and according to many opinions, this
                                                     is an abuse of the Parliament power: indeed it
                                                     could be very difficult for many landlords to
                                                     obtain the restitution of the real estate during a
                                                     lot of time; anyway they can obtain
                                                     compensation from Gouvernement, under
                                                     European Human Rights Treaty (art. 6).#




No, there is no provision of that type. Even in      yes; #At the request of a party sentenced for
the context of the Law of 8 December 2000 on         absconding, whether a tenant or a squatter, the
overindebtedness, no such provision is               Justice of the Peace may order that s/he be
intended.##                                          granted a stay of execution in relation to the
                                                     decision in question.#This stay may not exceed
                                                     three months, but it may be extended twice, on
                                                     each occasion for a period of not more than
                                                     three months.#The stay will only be granted if,
                                                     as a result of circumstances, the applicant
                                                     appears to deserve that concession, unless it is
                                                     completely incompatible with the personal
                                                     needs of the other party.#The request for a
                                                     stay is made through a simple request filed with
                                                     the clerk to the Justice de la Paix (Justice of the
                                                     Peace), who will summon the parties for the
                                                     first hearing.#The decision on the request is
                                                     simply noted by the court note-taker. #There is
                                                     no appeal against the decision.#When the time
                                                     for moving out granted to the occupier is more
                                                     than two weeks, the request must be lodged at
                                                     least three days before expiry of that period,
                                                     and failure to do so results in loss of the right to
                                                     make the application.#The application to
                                                     extend the stay must be made at least three
                                                     days before expiry of the stay, and failure to do
                                                     so results in loss of the right to make the
yes; #no specific regulations for energy:      yes; #Article 18 Huurwet: eviction can be done
however, the algemene voorwaarden voor de      when the rent has not been paid.
levering van elektriciteit 2002 voor                                    #
huishoudelijke verbruikers states in article 4
that when the payment is not made in due tim,
the utility company may set a new payment
term. the consumer has the right to reach a
paymentsettlement.#Gas:#Water:#Telecommu
nications: ## #




yes; #Law n. 23/96, of 26-7-1996, establishes    no
mechanisms to protect utility services users
(water, energy and gas supply, telephones). In
case of outstanding payment, art 5 forbids
utility companies to cut off supply without
notifying the user at least 8 days in advance.
The company must also indicate ways for the
user to avoid having the supply cut off.#
yes; #Each supplier sets its own rules regarding     yes; #Article 22.4 of the Law of Civil Procedure
disconnections. However, they require that           allows the occupier to stop the eviction if all
there is a default and prior notification on         arrears are paid. This measure is only allowed
behalf of the supplier, explaining the reasons to    once. #
the affected party.#




yes; #Municipalities have the duty to assist         yes; #There is fairly extensive regulation to
individuals with advice in questions of domestic     protect tenants. To put it simply, a tenant who
economy. This arises from the general social         has defaulted on the rent must be given notice
services legislation and section 3 of the credit     in a prescribed order and social welfare
adjustment act. The Consumer Agency is the           authorities must be notified of the fact. The
central authority responsible for this activity. #   authorities can then step in to pay the rent. If
                                                     they do not intervene, notice becomes effective
                                                     unless theh tenant within a certain period pays
                                                     the due rent. If the tenant fails to do so, the
                                                     court may give an eviction order. #
                                          37                                             38
   Are there any provisions for relief        Is assignment of wages allowed under your
concerning#taxes#public fees#fines?            law?




no##                                           yes; #Assignment of wages for not yet due
                                               demands in consumer contracts are forbidden
                                               in the Consumer Protection Law: #§ 12. (1)
                                               KSchG: Wages or salaries of consumers may
                                               not be assigned to entrepreneurs for security or
                                               for satisfaction of not yet due demands. #In
                                               practice this prohibition in KSchG is gone
                                               around. Instead of assignment of wages (in
                                               which the bank steps into the salary claim right
                                               of the debtor against his employer) the banks
                                               get from the debtors contract attachments of
                                               the wages (here the bank does not own the
                                               claim for wage, but the wage claim is
                                               contractually attached to the creditor as
                                               security of the credit). #Employers are allowed
                                               to make payments due to a contractual
                                               attachment right only if the creditor has a
                                               requirement on utilization and this the
                                               employer were indicated (§ 300a EO).#
no##                                                             yes; #Assignment of earnings is an document in
                                                                 which the consumer empowers the creditor to
                                                                 obtain payments directly from his/her
                                                                 employer, without requiring an order from the
                                                                 judge. (unlike in the case of attachment of
                                                                 earnings or delegation).#Most lenders require
                                                                 that borrower(s) sign an assignment of
                                                                 earnings by way of a guarantee of their
                                                                 liabilities.#The Law of 12 April 1965 on the
                                                                 protection of workers' income provides that, for
                                                                 the assignment to be valid, certain formalities
                                                                 must be observed:#- a separate document: an
                                                                 agreement to assign income to a creditor must
                                                                 form a distinct part of the agreement whose
                                                                 fulfilment it guarantees;#- both consumer and
                                                                 lender as well as, if applicable, the guarantor,
                                                                 must be given a copy of the assignment
                                                                 document;#- if the purpose of the assignment
                                                                 is to guarantee repayment of a consumer loan,
                                                                 the document must recite the articles of the
                                                                 Law describing the procedure enabling the
                                                                 consumer to object.#Because the creditor has
                                                                 possession of an assignment, it can apply
                                                                 directly to the employer in the event of default
                                                                 by the consumer. However, the creditor must
                                                                 observe certain formalities:#- the creditor must
                                                                 first notify the consumer, by registered letter or
yes; :#The general rules in the Bankruptcy Act on Debt           through the huissier (sheriff) of its intention to
                                                                 no
Adjustment (mentioned below) also apply to taxes etc.
#Similar rules are found in the tax legislation (Act no.
169/2000 on Collection of Taxes etc (Lov om opkrævning af
skatter og afgifter) § 15) making it possible to grant debtors
with only tax debts etc relief without initiating the rather
complicated Debt Adjustment procedure according to the
Bankruptcy Act. #
yes; #Taxes: Distress of taxes may contune       no
only 5 year. A debtor may seek relief from tax
authories in case of social majeure.#
yes; #The general rule is that tax offices retain   yes; #The attachment of earnings procedure
the power to grant time or remission of debts.      begins with a conciliation hearing before a
However, in the context of overindebtedness,        judge at first instance. The judge may grant
where the commission proposes that the debts        time for payment and check the validity of the
be purged because of the debtor's insolvency,       claim. Where the claim is disputed, s/he
the request for tax debts to be written off is a    examines the details of the dispute provided by
matter for the tax office. #For semi-fiscal debts   one of the parties.#If the judge does not grant
(TV licence fee), fines and Social Security         time for payment and if the debt cannot be
debts, the commission has no power to impose        repaid, attachment occurs during the following
repayment of the debt by instalments. At the        week. The employer is notified of the order.
moratorium stage, it may propose that the debt      and the notice includes the percentage of the
be suspended.#See art. L331-7-1 and the tax         salary to be attached. The employer must send
directive of 5 February 1999 (see INC               that amount every month to the court clerk's
brochure)##                                         office (greffe du tribunal).##
yes; #Various regulations in Federal and Land      yes; #Assignment of wages is not regulated
Law provide facilities of payment. If the the      under a special provision. The jurisdiction has
payment would constitute an unreasonable           derived assignment of wages from § 398 BGB
hardship, the debtor may claim for#-               (Civil Code) which originally regulates
settlement, #- prolongation of payment,#-          assignment of claims.#Unlike other special
abatement of a fee, #- release (wholly or          provisions regulating credit collaterals (i.e. §§
partly) or#- payment by                            765 ff. BGB: loan guarantee, §§ 11.. BGB: land
instalments.#Examples: #- Tax arrears:             charge) § 398 BGB does not determine rights
release (wholly or partly) under § 227 AO          and obligations and especially not protected
(Abgabenordnung/Tax Code).#- Fines: law            privileges.#
enforcement authorities may decide on facilities
of payment after the final judgement (§ 459a
StPO - Strafprozessordnung/Code of Criminal
Procedure).#- Fee arrears: Federal and Land
Budgetary Regulations provide different
facilities of payment.#




no#    #                                           yes; #any deduction from wages by an
                                                   employer are subject to an express prior
                                                   written agreement of the employee, or
                                                   alternatively by court order pursuant to an
                                                   attachment of earnings order for the
                                                   enforcement of a judgment debt.#There is no
                                                   restriction on the debtor otherwise assigning
                                                   their wages #
no#There are no provisions for relief from       no#According to art.464 of our Civil Code, what
taxes, public fees and fines concerning indebted cannot be garnished cannot be assigned too
persons.#                                        (art.464 of the Greek Civil Code). According to
                                                 art.982 par.2 of our Code of Civil Procedure,
                                                 wages cannot be garnished (see below under
                                                 43). #




Provisions for Relief##Tax arrears and recovery of        Assignment of wages##NOTE: We are assuming,
social security overpayments#Extra time to pay may        given the reference to garnishment in subsequent
be granted in line with specified procedures available    questions, that you mean here assignment of wages
to the public under the Freedom of Information Act        as part of the credit contract as opposed to by court
on the respective government websites                     order or on a legislative „tables‟ basis in these
(www.welfare.ie and www.revenue.ie)##Refuse               questions. ##In this context, assignment of wages is
charges (levied by local authorities i.e.                 neither allowed nor prohibited by law but in practice
municipalities) #There are means tested exemptions        is never written into credit contracts. However, given
on low-income grounds applied by various local            that there is no law allowing attachment of earnings
authorities in respect of local refuse charges.##Local    in relation to non-payment of civil debt yet (there
authority rents - hardship clause#The Guidelines for      have been proposals) either, any such attempt would
Local Authorities on Rent Assessment, Collection,         be unlikely to be upheld.##
Accounting and Arrears Control (drawn up by the
Housing Unit operating under the auspices of the
Government Department of Environment) provide
that „local authorities should ensure that their
differential rent scheme includes a hardship clause
which makes provision for the acceptance of a lower
rent than that required under the terms of the
scheme, in exceptional cases where payment of the
normal rent would give rise to hardship‟.##TV
licences #By voluntary agreement between An Post
(the Post office) and MABS, An Post will grant a 3-6
month moratorium following contact by MABS for
more time to purchase the licence which is
compulsory. ##Fines#Petitions may be made to the
Minister for Justice to reduce/set aside fines. The Law
Reform Commission has recently recommended that
fines should be scaled according to the person‟s
ability to pay, i.e. that two people in different
economic circumstances might pay a different fine
for the same offence.##However, the major difficulty
with the fines system is still the lack of a formal
instalment system to effect payment. This has and
                                              yes; #Yes, but only one fifth can be assigned;
                                              see d.p.r. 5.1.1950 n. 180 (in attachment).#




no#There is no such provision in Luxembourg   yes; #The issue of attachment of earnings is
law.##                                        dealt with in the Civil Procedure Code and
                                              through various specialist enactments (Law of
                                              11 November 1970 amended to provide for
                                              assignment and attachment of earnings from
                                              work as well as pensions and benefits and the
                                              Grand-Ducal Regulation of 8 January 1973,
                                              setting a rate for the ability to assign and to
                                              attach earnings, pensions and benefits). The
                                              attachment and seizure procedure is governed
                                              by the provisions of the Law of 11 November
                                              1970 and the Grand-Ducal Regulation of 26
                                              June 2002.#The payroll of civil servants, the
                                              salaries of employees are targeted by these
                                              provisions or, more precisely, people working
                                              for one or more employers in whatever
                                              capacity, those in receipt of unemployment
                                              benefit, pensions and social security benefits,
                                              whatever the amount and the nature of the
                                              income are targeted by the provisions above.
                                              The principal and ancillary sums related to this
                                              income are targeted, with the exception of
                                              sums allotted by way of repayment of set
                                              fees.#Draft legislation dated 16.05.2002, no.
                                              4955 amending the amended Law of 11
                                              November 1970 on assignments and
yes; ###yes, discharge of tax debts (Leidraad     yes; #Article 7:633 BW, Article 475d Rv.
invordering 1990, Algemene wet inzake             ##Employee has right to 90 % of the minimum
rijksbelastingen) and public fees for the poorest wages. ##
people (locally arranged per city)#gratie#




no#Sometimes, to reduce tax evasion, the        yes; #As provided for in article 824/1, item a) of
State has granted an occasional discharge of    Code of Civil Procedure, 1/3 of one's wages can
interest on taxes, as well as reducing or       be assigned.#
forgiving related fines.#
yes; #The General Taxation Act is the keystone     no
for the Spanish tax system. This norm allows
for the extension, reduction or deferment of
payment, but with interest added for the the
delay in payment: granting an extension or
deferment is at the descretion of the
Department of Tax, taking into consideration
the economic-financial situation of the debtor.
##The general rule is that guarantees are
required, in the form of joint guarantees from
the bank or from similar financial institution.#




yes; #Yes, such debts are covered by The           yes; #But it is not permitted to assign salary or
Adjustment of Debts Act, see item 48.#             wages before they are due. In other words, the
                                                   wage earner may not dispose of his wages
                                                   before the date they are due. Similarly, the
                                                   wages that are not yet due cannot be subject to
                                                   assignment. #
                                         39                                                 40
Are there any specific regulations or            Is private debt collection regulated under your
judgements to protect the debtor or his family   law?
against the enforcement of assignment of
wages?                                           i.e.: Is private debt collection regulated by
                                                 statute, licence, codes of practice, common
                                                 practice (commercial reputation) or is it not
                                                 regulated at all?


no                                               yes; #The conditions for entrance are regulated
                                                 in the Collection Agency Regulation of
                                                 28.01.2003 (see enclosed
                                                 InkassoinstituteVerordnung.pdf).#
yes; #In order to enable each individual to live  yes; #Recovery of loans is regulated by the Law
with human dignity, the law provides for certain of 20 December 2002 relating to recovery by
income to be partially or completely              consent of consumer debts.##
unavailable. The rules below also apply to
attachment of earnings.#Articles 1409 and
1410 of the Code Judiciaire list the income
protected by the exemption rules. Basically,
the income relates to holiday pay and substitute
income (pension, unemployment benefit,
disability benefit…) and maintenance #Family
allowances, disability allowances, minimum
income, guaranteed income for retired people,
social security paid by the C.P.A.S., ... are all
completely exempt. #With regard to other
income, the amounts that can be paid over are
modified each year and vary according to
income. For 2003:#- up to €857 : 0 %#- from
€857.01 to 921 : 20 %#- from €921.01 to
1016 : 30 %#- from €1016.01 to 1111 : 40
%#- over €1111 : 100 %.#The law provides
that, where an assignment is implemented, the
employer must pay the remaining element
over, at the option of the worker, either
directly, or by postal transfer, or by cheque.#




                                                   According to the Debt Collection Act ( no.
                                                   319/1997, Inkassoloven) private debt collection
                                                   (except when performed by attorneys and
                                                   banks) requires licence by the Chief
                                                   Commissioner of Police. Staff of a Debt
                                                   Collection Agency addressing the debtors
                                                   personally must be approved by the Chief
                                                   Commissioner of Police.The debt collection
                                                   agencies are regulated by a general clause
                                                   demanding that the activities be in accordance
                                                   with "good Debt Collection Practice".
                                                   Furthermore, the Act contains detailed rules on
                                                   personal contact with the debtors.
no   yes; #Private debt collection is regulated by Act
     of licence for debt collection (1999/517).
     Country government of South Finland admits
     licence to debt collection and it‟s a premise to
     practise professionally debt collection.    #
yes; #Only a fraction of the salary can be   yes; #The debt recovery profession is registered
attached. It is set by order and the scale   by décret no. 96-1112 of 18 December
applied takes into account the number of     1996.#Costs of the huissier (sheriff) are set out
dependant children.#                         in the décret of 12 December 1996. It should
                                             be noted that, in the overindebtedness
                                             procedure, the debtor may be exempted from
                                             huissier's fees if s/he informs the huissier in
                                             time that s/he has lodged a file with the
                                             overindebtedness commission.# #
yes; #Consumer credit contracts provide a           yes; #The collection business is subject to the
standardised assignment of wages-clause.#In         "Rechtsberatungsgesetz" (Legal Advice Act).
1989 the Federal Court of Justice has               #Debt-collecting agencies have to be licensed
determined requirements of an effective             pursuant to Article 1 § 1 para.1 no. 5 Legal
standardised assignment of wages-clause:#-          Advice Act. The license is granted by the
objective and volume of the assignment must         president of the "Amtsgericht" (Local Court) or
be specified unmistakebly,#- the clause must        "Landgericht" (Regional Court). The license is
include a release declaration,#- unmistakebly       limited to out of court debt recovery. #The
regulation of the conditions to realize the         collection business has to be registered at the
security.#For more details please read the          Trade Supervisory Office (§ 14 of the Industrial
judgement: http://www.money-                        Code). #
advice.net/index.php?id=9&searchid=1&offset=
0#The debtor may avoid his assignment due to
his credit contract being contrary to good
morals (§ 138 BGB).#




yes; #Deduction from wages, pursuant to the         no#codes of practice for members of relevant
Employment Rights Act 1996, must be in              trade bodies #
writing, signed by the employee before the
relevant deduction is made.#There is a
restriction on the amount of deduction that can
be made by an employer for matters such as
stock shortages in retail employment#An order
for the Attachment of Earnings is subject to the
Courts discretion on the creditors application to
enforce a judgement debt#
yes; #Wages cannot be assigned in Greece. See   no#Debt collection is very recent in Greece. Till
above under 38.#                                recently collection was enforced either by the
                                                special departments of the banks or, through
                                                "outsourcing", to law offices. In the last three
                                                years some societe anonyme have been
                                                established for debt collection. They employ
                                                some lawyers and bailiffs, as well as other
                                                administrative personnel who use the
                                                "signatures" of lawyers. Both law offices as well
                                                as these companies are paid according to the
                                                collected sums (percentage
                                                agreed).#Nevertheless, article 40 of the Code
                                                on Lawyers provides that persons that provide
                                                services which should be provided by a lawyer
                                                according to this Code must be prosecuted on
                                                the basis of art.175 of our Penal Code. #On the
                                                basis of this provision of the Code on Lawyers
                                                such dept collection companies are forbidden
                                                and their licence of societe anonyme could be
                                                revoked. Nevertheless, to our knowledge no
                                                such issue has yet been raised either to the
                                                courts or the Bank of Greece as supervisory
                                                authority of the market of the banks.#

                                                There is no code of practice, commercial
                                                reputation or other. The debt collection societe
                                                anonyme have been established on the basis of
See above                                       the general and 42 Private debt collection##No.
                                                Items 40, 41 licence -necessary for the
                                                private debt collection is not regulated under Irish
                                                law in terms of the licensing of debt collectors or the
                                                setting of maximum fees or collection costs.
                                                Nonetheless, many credit institutions use private
                                                debt collectors as an alternative to or in advance of
                                                legal proceedings.##There is a lot of anecdotal
                                                evidence of debt collectors representing themselves
                                                as having statutory powers in order to intimidate
                                                debtors into payments but in reality, there is no
                                                obligation on a debtor to deal with a debt collector in
                                                any way.##As a result of this potential harassment
                                                of debtors by debt collectors and indeed, creditors,
                                                the Non-Fatal Offences against the Person Act 1997,
                                                provides as follows:##Demands for payment of debt
                                                causing alarm, etc.##S.11.(1) A person who makes
                                                any demand for payment of a debt shall be guilty of
                                                an offence if
no                                                 yes; #There are rules about "agenzie di
                                                   recupero crediti": see art. 1, par. 1, a), d. lgs.
                                                   n. 374/1999 (in attachment); these are
                                                   operators which collect debt on behalf of
                                                   creditors (others are factors, who buy credits,
                                                   under l. n. 52/1991); they have to ask for
                                                   administrative licence, under art. 115 r.d.
                                                   18.6.1931, n. 773 (c.d. T.u.l.p.s., that's a
                                                   legislation about public safety, and no real
                                                   control is made); there's no specific and
                                                   complete regulation: "agenzie di recupero
                                                   crediti" only have to notice all "suspect"
                                                   operations they made (in order to the risk these
                                                   are outcome or results of illegal
                                                   business).#There's a private association
                                                   (www.unirec.it) that adopted an ethic code.#




yes; #The Grand-Ducal Regulation of 26 June        no#Debt recovery companies are not regulated
2002 sets the levels of income from earnings,      by specific legislation but fall within company
pensions and benefits that can be assigned or      law provisions.#However, as two thirds of our
transferred as follows:#The first tranche: up to   clients have taken out one or more loans in
550 euros a month#The second tranche: 550 to       Belgium, and Belgian debt recovery
850 euros a month#The third tranche: 850 to        organisations are frequently involved with
1050 euros a month#The fourth tranche: 1050        customers in Luxembourg.#
to 1750 euros a month#The fifth tranche:
above 1750 euros a month.##
yes; #looncessie, geen idee?#                   no




yes; #As provided for in article 824/3 of the   no#We are not aware of any legal regulation for
Code of Civil Procedure, the judge can exempt   debt collection by private entities (although
debtors from assignment of wages (as well as    there are debt collection companies operating
1/3 of old-age pension or disability allowance, on the Portuguese market)#
or other social benefits, insurance or
indemnization for accidents), taking into
account the nature of the debt and the needs of
the debtor and his/her family.#
yes; #Of course the whole salary is not              no##
guaranteed, no matter how much it is, but
there has to be access to the minimum to meet
basic needs. ##The Law of Civil Procedure
allows the embargo of wages, if such an order
exists; in the first instance, cash or any type of
current account is frozen; in seventh place
household goods; in eighth place salaries or
wages; and ninth credits or other mid to long
term rights (art. 593).##Art.607 states that
any salary, wage, pension, compensation or its
equivalent, cannot be embargoed if it is below
the interprofessional minimum wage (15.04
euros/day or 421.20 euros/month, for
2003.##Anything above this minimum can be
embargoed according to the following scale:#1º
For the first additional amount up to the double
of the minimum interprofessional wage,
30%.#2º For the additional amount up to three
times the minimum interprofessional salary,
50%.#3º For the additional amount up to four
times the minimum interprofessional salary,
60%.#4º For the additional amount up to five
times the minimum interprofessional salary,
75%.#5º Any amount exceeding the previous
one, 90%.#If the foreclosed is beneficiary of
no                                                   yes; #There is a Debt Collection Act which
                                                     defines#1) who is allowed to carry out debt
                                                     collection#2) the manner in which the claims
                                                     must be made#3) which costs may be charged
                                                     for debt collection.#
                                             41                                              42
Is there a maximum to the collection cost?        Is private debt collection otherwise restricted?




#Yes, there is a regulation of the Federal        #No.#
Minister for Economic Affairs from the year
1996, adapted to Euro Conversion in the year
2001, in which maximum costs for debt
collection are fixed (see enclosed
InassoinstituteHöchstsätze.pdf).#
#No.#The recovery office cannot claim fees                      #Practices likely to mislead the consumer, to
which were not provided for in the credit                       affect his/her private life or his/her human
agreement from which the debt arises.#                          dignity are prohibited both by the head of the
                                                                debt recovery office and the head of the
                                                                creditor company. The Law targets in
                                                                particular:#- incorrect information as to the
                                                                consequences of default in making a
                                                                payment;#- use of a statement on the
                                                                envelope to show that the letter relates to a
                                                                default in making a payment;#- application of
                                                                charges not provided for in the loan
                                                                agreement;#- approaches to the debtor's
                                                                neighbours, family or employer;#- recovery of
                                                                sums due from someone other than the
                                                                debtor;#- recovery of sums due in the presence
                                                                of a third party (except with the consent of the
                                                                debtor);#- express and deliberate harassment
                                                                of a debtor who disputes the debt ;#-
                                                                procedures designed to obtain
                                                                acknowledgement of the debts, a bill of
                                                                exchange or an assignment of wages from the
                                                                debtor;#- telephone calls and home visits
                                                                between 10pm and 8am.#Debt recovery
                                                                agencies must be registered with SPF
                                                                Economie. #All attempts to secure recovery of
                                                                a debt on an amicable basis must be preceded
                                                                by written notice setting out details of the debt.
Please describe more detailed:#§ 9 a of the Payment of           #Further, question 40
                                                                See answer toin the event of a home visit to the
Interest Act (Renteloven) as amended by act no. 379/2002
establishes a general principle of reimbursement of
reasonable and relevant costs and authorises the Minister of
Justice to regulate and maximize extra-judicial collection
costs concerning private claims. #Accordingly, Administrative
Order no. 601/2002 contains notice requirements and
precise maxima concerning both collection performed by
collection agencies etc. and collection performed by the
creditor himself.
#According to The Act of debt collection            #Private debt collection provides by The Act of
(1999/513) must the debt cost be reasonable         licence for debt collection and The Act of debt
regarding how much the debt is and how much         collection. #The Act of debt collection has some
work has been done. The maximum debt cost           restrictions that can be named. If the debt can
the courts accept is 60 € for an ordinary written   be collect by execution without a judgement
procedure.    #                                     (e.g. some insurance) may the cost not exceed
                                                    12 €. Private debt collectors are not able to
                                                    collect public fees that can be collected by
                                                    execution without judgement.        #
#Yes, for huissiers#   #The rule in relation to debt recovery is that
                       the creditor is responsible for the fees. On the
                       other hand, if there are proceedings for
                       recovery of a debt, the debtor is responsible for
                       the costs but the judge may reduce them or
                       write them off if they were unjustified or
                       excessive.##
#The Federal Code of Lawyers' Fees                    #Please see answer to question 40.#
("Bundesgebührenordnung für Rechtsanwälte" -
BRAGO) determines the level of remuneration
for lawyers. The upper limit of the lawyers' fees
applies to debt-collecting agencies due to § 254
of the Civil Code (BGB). § 254 of the Civil Code
regulates contributory negligence. According to
that the creditor is obliged to mitigate his loss.
If a creditor had instructed a collecting agency
and if he had to prosecute a claim nontheless,
he has to bear the additonal costs (collection
fees). If the creditor can foresee that he has to
consult a lawyer, i.e. because the debtor is
visible insolvent, the debtor is not obliged to
pay renumeration for the lawyer and the
collecting agency. Debtors therefore have to
bear collecting fees only if the collection service
has been proper and promising.#




#no, Private collection is not regulated, but any     #No#
demand for costs of collection must be in
accordance with the contract between the
Creditor and Debtor. The courts retain ultimate
discretion on whether to uphold any contractual
provision under relevant consumer protection
legislation if the matter is brought before them,
which is not a requirment#
#No, because there is no specific regulation for     #See above art. 40 of the Code of Lawyers.#
collection.#Since debt collection is not
regulated, and under the threat of art.40 of the
Code for Lawyers, the afore-mentioned
collection agencies (societe anonyme) appear to
the debtors to act in the name of the bank and
not on their own behalf. As a consequence they
do not ask from the consumer any extra
charges where they are concerned. #In any
case, credit contracts usually include a provision
whereby the consumer accepts to pay any
charges in relation to the contract. Enforcing
this contractual clause, banks use to charge
the debtor with the cost of every letter, formal
or not, any valuation of property, information
concerning the outstanding dept etc.#Please
note that remuneration of bailiffs is regulated in
detail for every act. As a consequence there is a
maximum cost for i.e. notification by a bailiff of
court order, for garnishment of mobile or
immobile property etc. This cost is paid in
advance by the creditor to the bailiff, but is in
the end charged to the debtor.#




See above                                            See above
#No, but fees of debt collecting operators have       #No, but these operators cannot employ force,
to be disclosed to the public.#                       or otherwise coinstrain debtors to pay.#




#No, fees for recovery are not set by law unless #The Law of 11 November 1970 applies.##
they are fees of the huissier de justice (sheriff),
which are set by the Grand-Ducal regulation of
14 May 2001.# #
#buitengerechtelijke incasso: art. 6:96.2.c.       #no, self-regulation#
BW.#The Netherlands Association for the
Judiciary created a maximum for collection cost.
Date of force: 1 april 2001, Report Voor-werk
II#Left: importance of case#Center: tarief
buitengerechtelijke kosten#Right: Incl.
VAT#t/m € 226,89        € 34,03 € 40,50#t/m €
453,78     € 68,07         € 81,00#t/m €
1.134,45     € 136,13 € 162,00#t/m € 2.268,90
   € 272,27 € 324,00#t/m € 3.403,45         €
408,40 € 486,10#t/m € 4.537,80         € 544,54
€ 648,00#t/m € 9.983,16         € 662,52 €
788,40#t/m € 19.512,55 € 780,50 €
928,80#t/m € 39.025,10 € 998,32 €
1.188,00#t/m € 97.562,75 € 1.542,85#
                         € 1.835,99#t/m €
195.125,49 € 2.450,41 #
        € 2.915,99#t/m € 390.250,99 €
3.448,73 #                                 €
4.103,99#t/m € 998.316,46 € 4.447,05 #
                           € 5.291,98#> €
998.316,46        € 5.536,12#
            € 6.587,98##




#No.See previous answer.#                          #No.See previous answer.#
#See question 40; private economic sanctions       #In recent decades there have appeared in
can only be carried out by the judges and          Spain companies specialising in debt collection,
tribunals. Without being public collections (eg.   but by their behaviour, on many ocassions
taxes), the Administration can embargo             using duress, their actions have been utterly
directly, but this should be overseen by the       rejected by the penal courts (where such
Courts.#                                           coercion involves penal responsibility) and civil
                                                   ones (when the right to the debtors self respect
                                                   has been encroached), since it cannot be
                                                   diminished in this predicament. #




#Yes, see above. There is a schedule which is      #No.#
adjusted at certain intervals and which states
that collection costs may reach certain
maximum amounts (currently, SEK 150 for
claim, SEK 140 for drawing up an instalment
schedule, and SEK 45 for reminder). This
derives from decree (1981:1057) on
reimbursement of debt collection costs.#
                                          43                                                 44
Are there any restrictions on wage                 Are there any exemptions for private
garnishments?#                                     households etc.?

                                                   i.e.: exemption from execution etc.#




#Wage garnishments are regulated in §§ the         See above remarks to wage garnishments,
290 ff. of the Execution Law (see enclosed         examples can be found in the enclosed table in
Exekutionsordnung.pdf). A subsistence              the "Subsistence Minimum Regulation 2003".
minumum has to remain to the debtors, which        This regulation is adapted to the inflation rate
consists of a basic amount and amounts of          (compensatory allowance basic rate) annually.
increase in dependence of the obligations of the   #Seizing of assets is regulated in §§ 249 ff.
debtor to pay alimony. The computation of the      Execution Law. In §§ 250 f EO the unseizable
subsistence level is to be accomplished by the     articles are aforementioned. Unseizable are in
employers of the debtors. This load to the         particular "things for the personal use or the
employers impairs the security of the jobs         household of the debtors, as far as they are
and/or the chances on beginning of work of         necessary to them for a modest living." (see
debtors. The subsistence minima are published      enclosed Exekutionsordnung.pdf).#
yearly in tables in a regulation of the Federal
Minister of Justice (see enclosed
ExistenzminimumVerordnung03.pdf).#
#See reply to question 39.#                                See reply to question 64.




Please describe more detailed:#Private creditors have no   The general exemption principle is found in the
access to the remedy of attachment of future earnings or   Administration of Justice Act § 509 defining the minimum to
wage garnishment (except for alimony). #According to       be left with the debtor as what is necessary to maintain a
special regulation most public claims can be enforced by   "modest home and a modest standard of living for the debtor
attachment of future earnings/ wage garnishment. #         and his household".#It should be kept in mind that future
                                                           earnings are generally exempted #from execution, see
                                                           answer to question 43.
#We have two important restrictions on wage          According to The Execution Act the furnitures so
garnishment based on The Act of execute and          far as reasonable, the personal effects of the
The Decree of protect share of wages. The            debtor and his family in so far as reasonably
necessary living expenses of the debtor must         necessary, effects with emotional value if
be saved and the maximum that can be seized          reasonable and the working implements, for
is 1/3 of the net income. In addition, there is an   example a car, and comparable items needed
absolute minimum income which is                     by the debtor to maintain his livelihood
protected. #                                         including school supplies for the children.
##
#There are restrictions on attachments of the      Besides question 43 not all moveable goods can
earnings of debtors. All debtors are entitled to   be seized. § 811 of the German Code of Civil
a certain statutory level of income which is       Procedure for example explicitely exempts from
exempt from attachment, based on their             seizure goods essential for a reasonable but
essential outgoings (see § 850c                    modest standard of living or any other interests
Zivilprozessordnung - ZPO/Code of Civil            warranting protection. Unseizable are for
Procedure). Income exceeding this level may        example kitchen utensils, domestic appliances,
be attached in full. #The following matters        radio and tv set, domestic animals. The legal
must be taken into account in the calculation of   phrase "modest standard of living" has to be
earnings: #- certain elements of income cannot     interpreted up to date. #Everything belonging
be attached (eg. child maintenance, housing        to the minimum subsistence level in terms of
benefit),#- certain elements of earnings can       the German Federal Social Security Act is
only be attached in part (eg. Christmas bonus,     unseizable.#
overtime pay).#The element of income exempt
from attachment may be increased on
application of the debtor to the court, in
particular to prevent the debtor becoming
reliant on social security payments or to take
into account special personal or work-related
needs on the part of the debtor (§ 850f
ZPO).#Once the exemption levels have been
raised in favour of the debtor with effect from
1.1.2002 (see question 45 for further
information), it may be assumed that the
number of applications brought under § 850f
ZPO will be significantly reduced or courts will
       such
grant Q39# applications less frequently. #
#see                                               None, save under bankruptcy laws which
                                                   protects general necessities and tools of the
                                                   debtors trade from execution.#The Insolvency
                                                   Act 1986 also provides limited protection for
                                                   dependents of the debtor living in the debtors
                                                   home, restricting the right of the Official
                                                   Receiver or Insolvency Practitioner appointed to
                                                   force a sale of the debtors home until at least
                                                   12 months have passed since the declaration of
                                                   bankruptcy
#According to article 982 par.2 of the Code of      Things exempted from garngished (art.953
Civil Procedure wage garnisment is prohibited.      par.3a and art. 954 par.3 of the Code of Civil
There is only one exception to this rule :          Procedure) : a) items of the personal use of the
#Wage garnishment is allowed only for               debtor and the debtor's family, is such items
maintenance claims provided in the law or in a      are necessary for their fundamental needs (e.g.
will or for contribution to the income of the       clothing, furniture, electrical appliances-for the
family. In that case the garnishment is allowed     latter there are different opinions in our
only up to one-half of the wage, after the          jurisprudence)#b) food necessary to the debtor
following elements are taken into account :# -      and the debtor's family for three months since
the income of the person concerned, #- the          the garnishment.#c) letters, financial
financial obligations relater to the family needs   documents, professional books, personal
and #- the number of the persons entitled to        documents of the debtor#d)books, musical
maintenance. #                                      instruments, articles for the debtor's or
                                                    debtor\s family scientific, cultural and spiritual
                                                    development.#e) for debtors who live on their
                                                    personal work all machinery, books or other
                                                    articles necessary for their work (examples
                                                    from jurisprudence : the boat of a fisher, the
                                                    sewing-machine for a dress-maker, the taxi for
                                                    a taxi-driver, the seats for a hair-dresser
                                                    etc).#f) agricultural products which are not yet
                                                    to ripe (for farmers).




Item 43, 44 and 45 - Wage Garnishments##As             See above
stated in the response to Items 38 and 39, wage
garnishment (or what we call attachment of
earnings) is not available to creditors in civil debt
cases as of yet, although there have been proposals
to introduce legislation in this area in recent years.
(Again FLAC‟s forthcoming report looks at these
issues in detail)##Attachment is only available at
present as a means of enforcing a Maintenance Order
made in respect of the financial support of a spouse
and/or child by the other spouse under the Family
Law (Maintenance of Spouses and Children) Act
1976. Maintenance in this sense is another word for
alimony or child support. Further details of how this
works can be supplied if required.
#Yes: only one fifth of wages; see d.p.r.       See art. 619 c.p.c. (civil procedure code):
180/1950 (in attachment).#                      creditor can execute only in the "debtor's
                                                house", so the place when he lives, even for a
                                                little time. If creditor try to sell (auction) a
                                                property not owned by the debtor, but by
                                                another member of the family, the last can
                                                make opposition, but he has to demonstrate his
                                                ownership by written evidences; furthermore,
                                                ownership has to be prior to the debt, and
                                                judges are very rigorous on this matter.




#Only earnings from work can be attached or    No, there are no exceptions for private
assigned, the guaranteed minimum income,       households.
family allowances, parental leave allowance,
maternity pay and eduactional grants cannot be
attached.#
#Art. 475c, art. 475d:Up to 90% of the     #Art. 447 Rv, exemptions are all goods for daily
minimum wages of an employee's income is   maintenance, tools used by craftsman in their
exempted, but above this percentage        personal business, any utility needed for
attachment is unrestricted. #              education or other purposes for arts and
                                           science. #




#See box 38#                               Families are covered by the regulations
                                           established for execution for the payment of
                                           debts, laid down in the Code of Civil Procedure,
                                           mentioned in question 44 of the questionnaire,
                                           relative to seizable and non-seizable property.
#Question 39 deals with the maximum               Article 606 of the Law of Civil Procedures states
percentages of wages that can be embargoed.       as non-embargable, besides books and
#                                                 professional instruments of the debtor
                                                  (providing that their value has no relation to
                                                  the amount demanded), the furniture and
                                                  fittings, clothes of the persued and his family if
                                                  not considered superfluous. Generally, non
                                                  embargable goods are foodstuffs, fuel and
                                                  others considered by the tribunal necessary for
                                                  the persued and depentents to avail of a
                                                  dignified standard of living.




#Yes, there are specific provisions in the Debt   According to Debt Enforcement Act 5:1 the
Enforcemnt Act . This is a very common - and      furniture,#personal items of the debtor and his
effective - form of enforcement. Garnishment of   family,#items with emotional value,#the
wages is permmited for any type of debt and       working implements and comparable items
may go on indefinitely. The debtor may keep a     needed by the debtor to maintain his
certain amount to satisfy basic needs.The rest    livehood,#all to a reasonable value.
is handed over to the creditor who has sought
garnishment. In order to effect garnishment,
the creditor must have an enforcement order
from the court. The state need not have a court
order but can carry out garnishment directly.#
                                         45                                                46
Are there any recent revisions of your        Are there specific regulations for consumer
exemption laws?                               bankruptcy?




#No.#                                         yes#What is the legislation in your country that
                                              applies to consumer bankruptcy? Please give the
                                              name of the law:#The legal regulations can be
                                              found in the Bankruptcy Code in the §§ 181 ff
                                              (Third part: Special Regualtions for Natural
                                              Persons, First Main Piece: Bankruptcy and Debt
                                              Adjustment Procedures, see enclosed
                                              KonkursordnungPrivatkonkurs pdf).#Effective
                                              date of this law: 1.1.1995#
#The law was amended in 1993 1993.#   yes#What is the legislation in your country that
                                      applies to consumer bankruptcy? Please give the
                                      name of the law:#Law of 5 July 1998 on the
                                      collective settlement of debts#Effective date of
                                      this law: The Law came into force on 1/1/99.#




No




                                      Yes# What is the legislation in your country that
                                      applies to consumer bankruptcy? Please give the
                                      name of the law:The Bankruptcy Act
                                      (Konkursloven) §§ 197-237. Effective date: 1
                                      July 1984
 #The Decree of protect share of wages            yes#What is the legislation in your country that
(1989/1031) is from 1989 and The Execution        applies to consumer bankruptcy? Please give the
Act (1895/37), chapter 4, section 5 (see 44) is   name of the law:#Act on the Adjustment of the
from 1997. #                                      Depts of a Private Individual       #Effective date of
                                                  this law: 8th of February 1993#
## #   yes#What is the legislation in your country that
       applies to consumer bankruptcy? Please give the
       name of the law:#The law on overindebtedness
       of 31 December 1989 applies to all debtors who
       are not subject to other legislation (such as the
       laws relating to business or agricultural
       insolvency).#However, the law of 1 June 1924
       introducing French Company Law into the Haut-
       Rhin, the Bas-Rhin and the Moselle
       départements are still in force and may apply to
       non-business debtors, who may choose
       between the two legislative frameworks.#With
       regard to the following questions, our vies is
       that the law on overindebtedness
       applies#dt##Effective date of this law:
       Overindebtedness law: January 1990#
 #1. After 10 years the german legislator raised    yes#What is the legislation in your country that
the protected earnings rates up to which an         applies to consumer bankruptcy? Please give the
amount is exempt from attachment. The new           name of the law:#Insolvency Act
protected earnings rates are effective since 1      (Insolvenzordnung - InsO) of 5 October 1994
January, 2002. Before that, the level of the        (BGBl 1994 I, 2866), last changed by the law of
unseizable earned income moved below the            13 December 2001 (BGBl I, 3574,
social welfare assistance level. Consequently,      3576).#Consumer Bankruptcy is just a part of
the number of applications according to § 850f      the Insolvency Act (§§ 304 ff. InsO), which is
of the German Code of Civil Procedure (see          primarily geared to the needs of insolvent
answer to question 43) increased                    companies and not of insolvent
continously.#2. The protection of the private       consumers.#Effective date of this law: 1 January,
bank account is incomplete. The law (§ 850k of      1999#
the German Code of Civil Procedure and § 55 of
the German Code of Social Law I) does not
prevent double account seizing and their lasting
effect. A majority of the banks uses account
seizings as an opportunity for termination of the
bank account. The Federal Ministry of Justice is
discussing an improvement of the protective
regulations. #




#No#                                                yes#What is the legislation in your country that
                                                    applies to consumer bankruptcy? Please give the
                                                    name of the law:#Insolvency Act 1986#Effective
                                                    date of this law: 25 July 1986#
##No.#      What is the legislation in your country that applies to
            consumer bankruptcy? Please give the name of the
            law:#BANCRUPTCY IS REGULATED ONLY FOR
            TRADERS. THERE IS NO CONSUMER
            BANCKRUPTCY LEGISLATION.




See above   Consumer bankruptcy##NOTE: There is bankruptcy
            legislation (as described below and inItem 1) but this
            is wholly inappropriate to, and hardly ever used by,
            debtors or creditors in respect of consumer debt. Its
            relevance lies primarily in the context of (small)
            business debt where a sole trader does not have the
            cover of limited liability and is seeking protection
            from his/her creditors pending the organisation of
            some form of offer of partial repayment (called a
            deed of arrangement). It is estimated that in any
            legal year, there is unlikely to be any more than 30
            official bankruptcies for the entire country.#Thus,
            the standard elements present in many European
            debt settlement schemes – social force majeure,
            fresh start etc are not present in the Irish situation,
            although a debt settlement scheme agreed between
            MABS (with FLAC) and the Irish Bankers Federation
            (IBF) is currently being run on a pilot
            basis.##Bankruptcy Act, 1988##The legislation
            covering bankruptcy is the Bankruptcy Act
            1988##Once adjudicated bankrupt, the debtor‟s
            assets vest in the Official Assignee (an officer of the
            High Court) or a trustee (liquidator) chosen by the
            creditors. ##A person can only apply for a discharge
            (unless the debts are repaid in total) after 12 years
            and only then if they pay preferential creditors
            (normally the Revenue) and the full costs of the
            bankruptcy. ##Even if a person gets a discharge,
            they still carry the tag of discharged bankrupt that
            will show up whenever anyone searches the
            bankruptcy register.##Though arrangements are a
            possible alternative (see point 60), neither
            arrangements nor bankruptcy are generally options
            in Ireland for consumer debt in view of a variety of
#No.#                                                no




 #Draft legislation no 4955 of 16.05.2002,           yes#What is the legislation in your country that
amending the Law of 11 November 1970 on              applies to consumer bankruptcy? Please give the
assignments and attachments of earnings,             name of the law:#Law of 8 December
pensions and benefits was lodged with the            2000#a)concerning the prevention of
Chambre des Députés (copy attached). #This           overindebtedness and introducing a procedure
draft legislation provides for an extension of the   for the collective settlement of debts in cases of
basis for calculation of assignments and             overindebtedness;#b) amending Book 1,
attachments while amending the proportions           Chapter 1, Article 4 of the New Civil Procedure
which can be assigned or attached with a view        Code# #Effective date of this law: 08.12.2000,
to reducing them.#                                   but given the lack of Grand-Ducal Regulations
                                                     in relation to enforcement, the first formal
                                                     application to engage in the procedure was not
                                                     signed until the end of 2001.##
NO     yes#What is the legislation in your country that
       applies to consumer bankruptcy? Please give
       the name of the law:#Consumer bankruptcy
       Act#Effective date of this law: 1/12/1998#




#No#   yes#What is the legislation in your country that
       applies to consumer bankruptcy? Please give the
       name of the law:#The Código dos Processos
       Especiais de Recuperação da Empresa e de
       Falência, of 1993 (revised in 1998) (Code of
       Special Procedures for Company Recovery and
       Bankruptcy 1993) provides for the application,
       with the necessary adaptations, of the company
       bankruptcy regulations to consumer
       bankruptcy. (art. 27)#Effective date of this law:
       Decree-Law n. 132/93, of 23-4-1993 (as
       formulated in 1998, by Decree-Law n. 315/98,
       of 20-10). #We are attaching the consolidated
       version of 1998.#
 #The current regulation covering civil          no
procedures (dealing with seizure of debtors´
goods) is Law 1/2000, of January 7th, of the
Civil Procedure, which replaces the previous
law, the Royal Decree of Feburary 6th, 1881).#




#The amount permitted to the debtor for basic    Yes. What is the legislation in your country that
needs is reviewed annually.#                     applies to consumer bankruptcy? Please give the
                                                 name of the law:#Yes, the Adjustment of Debts
                                                 Act (skuldsaneringslagen) (see item 34 above)
                                                 can be seen as an alternative to consumer
                                                 bankcruptcy. Otherwise the bankruptcy law
                                                 applies to such individuals. #Effective date of
                                                 this law: The Adjustment of Debts Act entered
                                                 into force on 1 July 1994. #
                                           47                                               48
Is this regulation or is a new regulation for   What is the legal definition of
consumer bankruptcy under discussion?
                                                consumer bankruptcy in your
Are there any proposals to reform this          country?#
regulation or to introduce a consumer
bankruptcy law?



no##                                            Insolvency is defined as follows in the
                                                Bankruptcy Code: #§ 66. (1) The opening of
                                                the bankruptcy presupposes that the debtor is
                                                insolvent. #(2) Insolvency is to be accepted in
                                                particular if the debtor stops his payments.
                                                #(3) Insolvency does not presuppose that
                                                creditors crush. The circumstance that the
                                                debtor satisfied demands of individual creditors
                                                totally or partly or still can satisfy, does not
                                                justify the acceptance for itself alone that he is
                                                solvent.
yes; #A Bill seeking reform of the collective    To be incapable of paying his/her debts.#
debt settlement procedure has been presented
but has not yet been debated in this
parliament.##Please give the name of the draft
etc.: "Proposition de loi modifiant le Code
judiciaire en ce qui concerne le règlement
collectif des dettes" (Documents
parlementaires, Chambre, 2002, n°
2149/001).#




No                                               The Debt Adjustment Scheme (Gældssanering) is a special
                                                 device partly inspired by the US-American rules on discharge
                                                 and Adjustment of Debts of an Individual with Regular
                                                 Income. #The Debt Adjustment scheme is intended to
                                                 supplement the traditional individual and collective creditors'
                                                 remedies:#In the context of bankruptcy, the scheme is an
                                                 exception to the traditional principle that the creditors not
                                                 paid in full by the distributions from the estate still have their
                                                 personal claims against the debtor. If a bankrupt individual
                                                 debtor is hopelessly indebted also after the distribution of the
                                                 estate, the remaining debt may be written down according to
                                                 the rules on Debt Adjustment In Bankruptcy. In such cases
                                                 the Debt Adjustment procedure is an appendix to the
                                                 ordinary bankruptcy proceedings. #In order to make the Debt
                                                 Adjustment scheme available to non-business debtors a
                                                 special procedure tailored to non-asset cases, Debt
                                                 Adjustment Outside Bankruptcy, was introduced. This
                                                 remedy enables debtors who are caught in the deadlock of
                                                 permanent indebtedness and not "reached" by the rules of
                                                 bankruptcy to deal collectively with their creditors and get out
                                                 of hopeless indebtedness. #The difference between Debt
                                                 Adjustment In and Outside Bankruptcy is one of procedure.
                                                 The prerequisites of the writing down of the debts are the
no#   #   For the purpose of remedying the financial
          situation of an insolvent private individual
          (debtor), a court may issue an order on the
          adjustment of the debts of the said individual
          (debt adjustment) and confirm a payment
          schedule which corresponds to the ability of the
          debtor to pay. #Insolvency means the other
          than temporary inability of the debtor to pay his
          debts as they become due. The following shall
          be taken into account when assessing the
          ability of the debtor to pay:#1) the funds from
          the liquidation of the assets of the debtor;#2)
          the income of the debtor and his earning
          potential, in view of his age, working capacity
          and other circumstances;#3) the necessary
          living expenses of the debtor;#4) the
          maintenance liability of the debtor; and#5) the
          other circumstances affecting the financial
          status of the debtor.
yes; #Three consumer associations are asking         In the Overindebtedness Law, the concept of
for the application of Bankruptcy in Alsace et       overindebtedness is defined as "the manifest
Moselle to all consumers#There is also a             impossiblility for a debtor in good faith to meet
proposal for registration of all loans and not       his/her debts taken as a whole as they fall due
only those in default, and to include all default,   and payable." #Case law has attempted to offer
such as rent, tax, not credit alone.#With regard     guidance to overindebtedness commissions on
to information requested by Government, the          the application of this definintion: the effect on
Comité Consulatif du Conseil National du Crédit      "minimum income requirements" is defined in
et du titre (CNCT) has made proposals for            the Act. In other words, an individual is
reform to improve preventative and remdial           overindebted if repayment of debts reduces
approaches to overindebtedness. #See e-mail          their minimum income requirement (the
text attached (except fpr annexes, which are         amount which cannot be seised or the Revenu
only available in paper form).#In addition, the      Minimum d'Insertion (income support level).#
Sénat has recently (21/3/2003) adopted two
amendments with regard to
overindebtedness:#- strengthening legal
criteria governing the advertising of consumer
credit#- enabling overindebtedness
commissions to involve the judge to obtain
more rapid cancellation of interest on loans
concluded on exorbitant terms.# #Please give
the name of the draft etc.: #Report on the
prevention and treatment of overindebtedness
published in December 2002 (proposals of
consumer organisations are attached as
appendices).#
no#Although debt advice agencies, creditors,        To file a bankruptcy petition the consumer must
lawyers and judges share the opinion that the       be unable to pay. #§ 17, para.2 InsO defines
consumer bankruptcy procedure (the                  "Illiquidity" if the debtor is unable to meet his
mandatory out-of-court procedure as well as         mature obligations zu pay, whereby illiquidity
the court run system) is in need of a further       shall be presumed as a rule if the debtor has
reform. There have been first informal              stopped payments. #Imminent illiquidity shall
discussions with the Federal Ministry of Justice.   also be a reason to open insolvency
#                                                   proceedings. The debtor shall be deemed to be
                                                    faced with imminent illiquidity if he is llikely to
                                                    be unable to meet his existing obligations to
                                                    pay on the date of their maturity (§ 18, para.2
                                                    InsO).#




yes; #Inslovency Act 1986 is in the process of      the inability of the debtor to pay the debt on
amendment as set out in the Enterprise ACt          which the petition is based, or in cases where
2002#Please give the name of the draft etc.:        the debt is not immediately payable, or the
Enterprise Act 2002#                                debtor appearing to have no reasonable
                                                    prospect of being able to pay the debt
No




Items 47-73 in the questionnaire are not really        Consumer bankruptcy##Where creditors
applicable in an Irish context – some points will      petition for bankruptcy: -#The debtor must owe
however be made where relevant.##                      at least €1,905.#The debtor must have
Consumer bankruptcy##There appear to be no
                                                       committed an act of bankruptcy. ## Examples
government proposals for reform in this area, though
a debt settlement approach has been proposed by        of acts of bankruptcy are: #Filing a petition
voluntary groups (FLAC research/West-North West        oneself or upon service of a Bankruptcy
MABS submission)                                       Summons by a creditor, failing to pay the debt
                                                       within the specified 14 day period#Transferring
                                                       assets in an attempt to put them beyond the
                                                       creditors reach#Deliberately evading creditors
                                                       (e.g. by leaving the State for this reason). ###
yes; #A Reform Committee of Bankruptcy Law           It doesn't exists
is working at the moment, and perhaps there
will be in the future a new regulation about
consumer insolvency; but committee works are
secret in this time, and nobody can know the
results.#Please give the name of the draft etc.: #




no##                                                 The procedure for the collective settlement of
                                                     debts is open to any private individual who is
                                                     not a business, who has a residence permit for
                                                     the territory of the Grand Duchy of
                                                     Luxembourg, who is experiencing long-term
                                                     financial difficulties, in order to address all of
                                                     his/her non-business debts which have fallen
                                                     due for payment.#
no#                                                       The inability of the debtor to pay his debts or the
                                                          expectation that the debtor cannot go on paying his
                                                          debts.#




yes; #The Code of Special Procedures for                  There are two terms - insolvency and
Company Recovery and Bankruptcy) of 1993 is               bankruptcy - which apply to both companies
currently being revised. Recent news informed             and individuals.#Insolvency - impossibility on
that Government's project intends to creat the            the part of debtors to comply with their
possibility for insolvent debtor present to court         obligations on time, due to lack of means and
with the bankruptcy petition a payment plan               lack of credit. (art. 3 and art. 8/1 sub-para.
proposal to be aproved by 2/3 of creditors                a)).#Bankrupcy - this term is used to designate
identified by him. This proposal is going to be           the legal action through which a debtor is
discussed on Parlment. As soon as we have                 formally declared bankrupt by the court. This
more details we contact you.#Two new legal                formal action depends on the acknowledgement
proposals for the settlement of cases of family           of a situation of insolvency.
overindebtedness have been submitted, but
they have not been discussed yet. The first
proposal was submitted in 1999 (1st version)
and 2000 (2nd version) by the public entity in
charge of consumer protection. This proposal
was prepared by the Comissão do Código do
Consumidor (Commission on Consumer Code)
and its basis is an essentially judicial mode. The
second proposal was submitted by the Ministry
of Justice in 2002. It was prepared by the
Permanent Observatory on Portuguese Justice
and is based on an extra-judicial model. #Please
give the name of the draft etc.: The title of the first
proposal is "Projecto sobre o Regime Jurídico
no##                                                 There is no definition of consumer bankruptcy,
                                                     except that it is applied to those people are at
                                                     the very limits of their business or professional
                                                     activity.##There are two types (the current
                                                     project , Auction Law forsees them converging),
                                                     depending if the debtor in question is a
                                                     business or not. If not, he is obliged to declare
                                                     bankruptcy if debts are greater than assets and
                                                     he is forced to stop paying his current
                                                     obligations.




yes; #The Adjustment of Debts Act will be            1) Bankruptcy#2) Adjustment of debts#are the
reviewed by a committee which will propose           two institutions that exts.#The Adjustment of
improvements. The committee has recently             Debts Act (1994:334) states that a physical
started its work and will present its conclusions    person may be granted adjustment of debts if
in 2005.#Please give the name of the draft etc.: #   his financial situation fulfils the stringent criteria
                                                     under the Act for insolvency. The criteria
                                                     include other than temporary inability of the
                                                     debtor to repay his debts as they become due.
                                                     An additional criterium is that there are special
                                                     reasons for granting adjustment. Consideration
                                                     is here given to the length and reason of
                                                     indebtedness and to the efforts by the debtor,
                                                     to the best of his ability, to reach agreement on
                                                     an instalment schedule with the creditors. #If
                                                     an application for adjustment of debt is
                                                     granted, a payment schedule for five years is
                                                     drawn up under which the debtor is required to
                                                     pay everything beyond what is absolutely
                                                     necessary for his and his family's living costs.
                                                     Under this payment schedule, the rest goes to
                                                     the creditors. After this five-year payment
                                                     period, the debtor is discharged from debt.#
                                             49                                                   50
Is “fresh start” an explicit goal in the consumer   Do you have a mandatory pre-court procedure?
bankruptcy law? How is the reality?




Please explain the philosophy of your bankruptcy    yes; please describe this procedure more detailed:
legislation more detailed:#The Austrian             #If the prospective law costs are not covered
bankruptcy model can not be described as a          the debtors have to certify that a extrajudical
"fresh start" - model, it more represents the       agreement was tried and failed and/or was
German "Re-Education-Approach". The                 doomed a priori to failure (§ 183 exp. 2 KO). In
acquisition of discharge of debt in practice        this regard pre-court procedure (offer of an
however is made very difficult through:# -          extrajudical agreement) is mandatory.#
frequent exclusion of debtors from cashless
money transfer, since banks are not willing to
contract for accounts with debtors#- creditors
who did not claim their demands in the court
proceeding but after the proceeding try to
execute their claims#- public proclamation of
the insolvency procedure and thus taking place
"Stigmatisierung" #- debts, which are excluded
from discharge, in particular fines, demands
from bad actions.#
Please explain the philosophy of your bankruptcy                   yes; please describe this procedure more detailed:
legislation more detailed:#The law clearly defines                 #The procedure is commenced by petition of
the objective of collective debt settlement:                       the debtor alone before the enforcement judge
restoring the financial position of the debtor                     sitting in his/her local court.#Where the petition
enabling him/her to pay his/her debts as far as                    is granted, the judge immediately appoints a
possible while guaranteeing the ability to live                    debt mediator.#Initially, the debt mediator
with human dignity. The balance between the                        attempts to negotiate a settlement plan with
interests of creditors and the protection of the                   the creditors. All measures are possible:
human dignity of the debtor and his/her family                     rescheduling payments, remission of interest or
must guide the judge in the preparation of a                       capital,… The law does not compel the mediator
plan for the collective settlement of debts. To                    to observe the principle of equality among
achive this, the judge may, in particular, decide                  creditors. The plan must be agreed both by the
to grant partial remission of the capital debts                    debtor and all of the creditors. Where there is
outstanding.#The preparatory work for the                          agreement, the judge will ratify it. Where no
legislation emphasises the need to grant a                         agreement has been reached within a period of
remission of debts to overindebted debtors who                     four months, the mediator will provide a report
do not have or no longer have significant                          to the judge.#
capacity for repayment: « In the most extreme
situations, virtually total remission of debts
should be ordered by the judge. In such cases,
the plan will have only a symbolic function (…)
Remission of debts will be a solution of last
resort, where no other measure is possible and
when this measure alone will preserve the
human dignity of the debtor » . #While today
the law only envisages partial remission of
debts, the Cour d'Arbitrage, in its judgment of
30 January the philosophy of your firmly the
Please explain 2003, upheld verybankruptcy legislation             no
more detailed:#The considerations carrying the Danish Debt
Adjustment rules take their starting point in the negative
personal and social effects of hopeless indebtedness.
Individuals with no prospects of being able to get rid of their
debts are left in a position, whose hopelessness inevitably
leaves its mark on the every day life of the debtor and his
family. Hopelessly indebted individuals are most likely to give
up trying on their own to change the situation. Typically, they
lack not only the motivation but, depending on the
circumstances, also the practical possibilities to keep or get
wage-earning employment or start a (new) business of their
own. Although they are frequently able to pay in the least
part of the debts their motivation to use their earning capacity
and paying ability to do so is likely to be extremely weak
when the prospect is, that they are nevertheless left in a
hopeless economic situation.#The human and other social
considerations in favour of debt adjustment need not be
incompatible with the interests of the creditors. A nominal
writing down of unrealistic (parts of) claims does not cause
them any loss. On the contrary, the writing down of the debts
to a manageable size may lead to a better and more equal
satisfaction of the creditors, especially if the writing down is
Please explain the philosophy of your bankruptcy      yes; please describe this procedure more detailed:
legislation more detailed:#Fresh start is an          #Before the deptor can get debt adjustment he
explicit goal. Debt liabilities for the rest of the   has to negotiate with his creditors. If the debtor
deptors life can´t be be the best solution            has neglected to determine the possibilities for
neither for the deptor nor for the society.           a negotiated settlement debt adjustment shall
That´s why a honest but unlucky or unskillful         not be granted.    #
person must some day have a chance to a new
start. However, we have even a strong tradition
that says that everyone have an absolute duty
to pay back his depts. As a summary for these
different ambitions we have many assumption
and a quite long program before the debtor
gets a fresh start.#
Please explain the philosophy of your bankruptcy
legislation more detailed:#Yes, since the reform
introduced in 1998 enabling debt to be written
off after a period of supervision of varying
lengths (a moratorium of a few months to a
maximum of three years) in cases of insolvency
("the absence of resources or goods which can
be seised to enable all or part of his/her debts
to be purged").##
Please explain the philosophy of your bankruptcy     yes; please describe this procedure more detailed:
legislation more detailed:#The Insolvency Act        #The debtor's request to open insolvency
provides discharge of residual debts (§ 286          proceedings assumes an unsuccessful attempt
InsO) for debtors who act in good faith. The         to settle out of court with all of his creditors on
discharge should offer a second chance.#There        the basis of a repayment plan (§ 305, para.1
is no proof, whether these debtors will get the      no.1 InsO). #The repayment plan is not subject
promised second chance. Germany expects the          to any statutory regulation. It applies the
first legally effective discharges at the end of     principle of contractual freedom. #The
2004. #It is to be assumed that the economic         repayment plan shall be deemed to be
reintegration of these debtors will fail. The        approved if all creditors accept the payment
former "Konkursordnung" (Bankruptcy Act) had         terms. The veto of one creditor is to be
a formative influence on the Insolvency Act.         sufficient to finish the pre-court
The consumer bankruptcy procedure therefore          procedure.#The certificate from which emerges
concentrates on liquidation and neglects the         that an unsuccessful attempt to settle out of
required rehabilitative and preventive function.     court has been made may not be older than 6
#Unlike the french bankruptcy law the german         months prior to the request to open insolvency
procedure ignores the role and the behavior of       proceedings.#
the credit industry.#Furthermore the german
consumer bankruptcy law has a moral flavour.
The law supposes that the creditors won't
violate a law and that the debtors have to be
objects to look after.#




Please explain the philosophy of your bankruptcy     no#Alternatives to the bankruptcy of the debtor
legislation more detailed:#Not explicit, but it is   exist. These include debt counselling and
the one of the effects#                              Individual Voluntry Arrangements. Non are
                                                     either mandatory or a pre-condition to
                                                     bankruptcy#Please see Attachment Q50#
Consumer bankruptcy##No. Irish bankruptcy               Consumer bankruptcy##No. There is no mandatory
legislation takes the conservative punitive approach.   pre-court procedure in Ireland. ##
The stigma inherent in the process, coupled with a
lengthy discharge period (12 years) and the fact that
a person will continue to be a „discharged bankrupt‟
indicate its total unsuitability to a modern consumer
society.##
Please explain the philosophy of your bankruptcy    no#Italian law incloses mandatory pre- court
legislation more detailed:#Now discharge doesn't    procedure only in the case of dispute between
apply neither to entrepreneur bankrupcty            an employee and his employer.#
(except for "concordato preventivo", that is a
minor procedure, under which debtor sells all
his goods to creditors, if their value is 40% of
the amount of unpaid debt); perhaps the
seeabove Reform will introduce discharge in
bankruptcy procedures, even in consumer's
insolvency (if this will be the willingness of
Committee).#




Please explain the philosophy of your bankruptcy    yes; please describe this procedure more detailed:
legislation more detailed:#Luxembourg law does      #1. At the Service level : #a. constitution and
not envisage a "fresh start". The law provides      administrative examination of the case,
that a procedure be instituted for the collective   checking the conditions are met for
settlement of debts intended to restore the         admissibility;#b. signature of the request for
financial position of the debtor by enabling        elimination of debts by the debtor, notification
him/her to pay his/her debts and guaranteeing       to the parties concerned that the request has
to him/her, as well as his/her household, that      been made and suspension of enforcement
they can live a life in accordance with standards   procedures, preparation of a rescheduling plan,
of human dignity.#The procedure for the             attempt to achieve agreement on the part of
collective settlement of debts consists of:#- the   the creditors and the debtor on the proposed
preliminary statement phase and preparation         plan, submission of the file and the plan to the
phase for a draft conventional settlement of        commission. This phase must be completed
debts established by the Information and            within three months following formal signature
Advice Service on Overindebtedness;#- the           of the request by the overindebted person.#2.
conventional settlement of debts phase before       At the level of the Mediation Commission:
the Mediation Commission; #- the judicial           Submission of a plan for conventional
settlement phase before the Justice de Paix. ##     settlement to the interested parties and a
                                                    statement of its success or failure. This phase
                                                    may not extend beyond the three month time
                                                    limit. The conventional settlement phase thus
                                                    ends at the most six months after formal
                                                    signature by the debtor.#
Please explain the philosophy of your bankruptcy       yes; please describe this procedure more detailed:
legislation more detailed:#The aim is to offer a       #Failure of a debt management agency to
fresh start to the over-indebted debtors who           negotiate a voluntary settlement is a condition
acted in good faith and to encourage more              to ask the court to impose debt adjustment. #
voluntary debt settlements by making judicial
debt adjustment financially less attractive to
creditors.#




Please explain the philosophy of your bankruptcy       no##
legislation more detailed:#The Code of Special
Procedures for Company Recovery and
Bankruptcy was devised to be applied to
companies and only marginally to individuals.
The Act does not provide for the discharge of
debts after their liquidation. For this reason it is
difficult to apply it to cases of family
overindebtedness. "Fresh start" is not an
explicit aim of this law.#
Please explain the philosophy of your bankruptcy      no#The process of agreement with creditors
legislation more detailed:#For businesses the         already mentioned is not obligatory and,
system is eminently repressive: the goods of          besides, is resolved in court. But the calling of a
the company are sold off to pay the debts; to         creditors auction carries legal liability if it is
avoid such measures it can take the measure           found to be provoked or seriously
known as the suspension of payments; and              disadvantageous for the debtor. #
after the winding up is the bankruptcy.##For
non-commercial entities the system is that of a
creditors auction, still with the possibility of an
agreement with creditors, which is explained in
the following section. Basically, it means a
different ending, as the arrangement of
creditors policy can be adopted by judicial
resolution. This wait and see has to be initiated
by the debtor, but the auction by both parties,
debtor and creditor.#




Please explain the philosophy of your bankruptcy      no#Proceedings to apply for adjustment of
legislation more detailed:#Yes, it is, as far as      debts begin with an filed with enforcement
adjustment of debts is concerned, but not in          authorities who carry out a preliminary
the case of bankrutpcy law. If an individual has      examination of the application. This
extensive business undertakings and a                 examination may lead to a refusal or a decision
complicated financial situation, the assumption       to initiate adjustment proceedings. In the latter
is that bankruptcy is chosen instead of               case, the authorities make a complete
adjustment of debts. #                                investigation into the matter. They can then
                                                      take a decision for the adjustment of debts, if
                                                      none of the creditors objects to it. However, if
                                                      one of the creditors objects, the case is
                                                      remitted to the court, which may rule on
                                                      adjustment of debts even against creditors'
                                                      will.#This can be regarded as a pre-court
                                                      procedure.This means that also those cases
                                                      that reach courts will have been investigated by
                                                      enforcement authorities.#For more details, see
                                                      item 57 below.#
                                           51                                                52
Do you have a voluntary pre-court procedure?        What body is responsible for the mandatory pre-
                                                    court procedure?#




no#A pre-court procedure is not mandatory if#-      The extrajudical agreement can be run by the
the procedure costs are already covered with        debtors themselves, in the Bankruptcy Code
the bankruptcy petition or #- a extrajudical        however there is the regulation that an
agreement had from the beginning been               extrajudical agreement, "especially by a
doomed to failure, e.g. due to the high number      privileged debt advice company or a privileged
of creditors (starting from approx. 10              creditor protection society" is to be
creditors). #In all other cases the debtors have    accomplished. #The evaluation of the
to certify the fact that a extrajudical agreement   adequance of the attempt in the judicial debt
was tried and failed (§ 183 KO).#                   adjustment procedure is incumbent on the
                                                    responsible district court.#
yes; please describe the voluntary procedure more   Debt mediators#
detailed:#The consumer may ask a debt
mediator to negotiate an agreed plan
independantly of any judicial procedure.#




No
no#   #   The debtor is responsible and if he has
          neglected to determine the possibilities for a
          negotiated settlement debt adjustment shall
          not be granted. But the debtor can get help
          from debt counselling.    #
no#The procedure is not a judicial one if the      #
debts are not disputed. The role of the judge is
merely to ensure observance of the law. The
overindebtedness commission is the body
(consisting of representatives of the
government, creditors and consumers) which
prepares the plan for rescheduling the debts
and submits it to the judge for approval. The
procedure begins with a consent phase. ##
no##                                    In principle, the debtor could initiate the
                                        mandatory pre-court procedure independently.
                                        Since only a suitable person or agency can
                                        certify the fact that the out of court procedure
                                        has failed, the normal case will be that non-for-
                                        profit debt advice agencies or lawyers support
                                        the debtor.#




no#Please see Q50 and Attachemnt Q50#   None#
Item 51- Consumer bankruptcy##Informally, the         Consumer bankruptcy##See point 50##
Money Advice and Budgeting Service is engaged in
ongoing negotiations with the credit industry on
behalf of a large number of indebted people and is
now recognised by many creditors as a professional
service with whom repayments can be discussed and
negotiated. To this extent, it might be argued that,
insofar as it concerns clients of MABS, there is a
voluntary pre-court procedure.##There is also a pilot
debt settlement programme taking place in four
areas of Dublin by agreement between the financial
and money advice sectors that may be extended on a
pilot basis to other areas in the near future. ##The
full text of the agreement upon which the pilot is
operating is included below. As you may see, it
operates upon the same sort of principles as many
European jurisdictions in terms of their legislative
schemes.###FINAL – as approved by Banks,
Building Societies and MABS on 4th Dec.
2001###Pilot Scheme for Alternative Debt
Settlement#Points of Agreement between the IBF
and MABS #on a Debt Management
Programme##This document is the result of
meetings that were held between MABS and the IBF,
from November 1998 to December 2001 inclusive, in
order to formulate agreement on a #Pilot Debt
Management Programme. This Programme will
operate on a pilot basis as an alternative (to the
legal) system of debt settlement. ##The current
objectives are as follows:#to finalise agreement
within the Working Group on the content of this
document;#to obtain approval for the document
within the respective organisations - IBF Committee
on Overindebtedness and Council, MABS
yes; please describe the voluntary procedure more   Next answers only refer to voluntary
detailed:#Under art. 3, par. 2, l. 30.7.1998 n.     procedure:#CCIA (Camera di Commercio
281 (as modified by d. lgs. 23.4.2001, n. 224:      Industria ed artigianato) which is an
see both acts in attachment), before applying       independent public organization (see l.
to the court for protection of consumer's           29.12.1993, n. 580).#
interests, consumer's associations can make an
application to competent "Camera di
commercio, industria, artigianato e agricoltura"
(CCIA): that's a conciliation procedure (see
regulation in art. 2, par. 4, a), l. n. 580/1993,
in attachment)#Yet, art. 6, co. 1, d.m.
30.12.2002 (in attachment) has recently
introduced a volontary pre-court procedure to
try to settle any question about lease contracts#




no##                                                The client must make a formal request to the
                                                    Information and Advice Service on
                                                    Overindebtedness for admission to the
                                                    procedure for collective settlement of debts.
                                                    The proposed discharge of liabilities is
                                                    submitted to the Mediation Commission for
                                                    supervision.#
no     Municipal banks, social services, private
       organisation, attorney's.#




no##   #
no#Yes, there is a prior voluntary procedure,     As explained, the arrangement of creditors is a
but it is not an out of court action but resolved voluntary procedure decided in the courts; the
within the in court.##The Arrangement with        acting judge is that of the local court where the
Creditors policy is regulated by the Law of Civil debtor has his address.#
Procedure of 1881 (whilst waiting the ultimate
Bankruptcy Law to be passed), and can only be
instigated by the debtor. Besides, the latter
cannot be bankrupt (hid debts greater than his
assets). The debtor formally requests the
arrangement with creditors, and a meeting is
called of all the creditors, who can agree to the
debtors proposal (they need a two thirds
majority) and they account for at least three
fifths of the debt. The agreement affects all
named creditors that did not protest in time and
challenge the decision. #




yes; please describe the voluntary procedure more   See item 50 above.#
detailed:#See item 50 above.#
                                        53                                            54
Who bears the costs for the mandatory pre-   What is the success rate for pre-court
court procedure?                             procedures? Please give figures.#

i.e.: the debtor, the state?




The debtors.                                 Approx. a third of all extrajudical agreements
                                             are accepted by the creditors (see enclosed
                                             Grafik zu Pkt. 54.pdf, Source: Bankruptcy and
                                             Threshold Data Report of the ASB for 2002).#
The fees of the mediator are given priority in      There are no data available.#
terms of the debtor's resources. But if the
debtor's resources are insufficient, they will be
met by a Fonds de Traitement du
Surendettement, created by the Law and
funded through an annual levy on a percentage
of the sums outstanding under credit
agreements. #
Each municipalies must establish or ensure that   ?#
free dept advisory counselling is available and
this way can the deptor get free help. On the
other side, the deptor can even use some other
way to get help and in these case the deptor
bears the costs himself.
The government funds the operating costs of   (From data gathered at the end of December
the overindebtedness commission. #            2002) :#Of 163,179 debt rescheduling plans
                                              proposed by the commission, 32,876 were
                                              rejected by the debtor or the creditor.#Of the
                                              plans accepted by debtors and creditors, only
                                              111,343 were approved by the judge.#The
                                              success rate is accordingly 68%.##
In principle, the debtor himself has to bear the   No representive data is available.#In 2000 and
costs for the mandatory pre-court                  2001, iff carried out two surveys among debt
procedure.#The majority of the so called           counselling agencies. 22 debt counselling
"suitable" agencies under § 305, para.1 no.1       agencies participated in the 2000-survey and
InsO - non-for-profit debt advice agencies and     16 agencies in the 2001-survey. One question
consumer organisations - offer support free of     referred to the success rate for the mandatory
charge or charge modest fees.#(See also            pre-court procedure. The average values were
answer to question 79.)#                           13,43 % (2000-survey) and 15,5 % (2001-
                                                   survey). The average value for voluntary pre-
                                                   court procedures before 1 January, 1999
                                                   (commencement of Insolvency Act) had been
                                                   35,64 %.#The figures before and after 1
                                                   January 1999 are not completely comparable.
                                                   Before 1 January, 1999 debtors could settle out
                                                   of court with each of their creditors seperately,
                                                   since 1 January, 1999 debtors have to reach
                                                   settlements that cover all of their
                                                   claims.#However, the figures illustrate that the
                                                   success rate for pre-court procedures has
                                                   decreased since commencement of the
                                                   Insolvency Act. This development must be
                                                   considered critically for two reasons:#1) The
                                                   success rate does not fulfil the legislative
                                                   objective that successful out of court
                                                   settlements shall be the rule.#2) Debt
                                                   counselling has changed. Their work and advice
n/a                                                is now focused on liquidation and not on
                                                   n/a#
Consumer bankruptcy##See point 50###   Consumer bankruptcy##There is no mandatory
                                       pre-court procedure. At this stage, it is too
                                       early to determine the success rate of the debt
                                       settlement pilot mentioned above (See point
                                       51). Informally, MABS is successful in
                                       preventing legal proceedings being brought
                                       against debtors with an inability to pay in many
                                       cases.##
Parties bear legal costs; State bear any other   There are no public data available; but it seems
costs (except tax costs).                        that pratice is very small; according to it, italian
                                                 country is far from carry out UE exhortations
                                                 [Com (1998) 198, (2001) 161].#




The procedure is free of charge.                 58.1% or 18 cases led to signature of a
                                                 conventional recovery plan in 2002.#
Municipal banks, social services, private   These are the succes rates of the municipal
organisation, attorney's.#                  banks. In 2000: 7.024 and in 2001: 5.619.#




                                            #
In Spain court fees are only for companies and     Legal statistics are in the hands of the General
not private individuals. And as there is no need   Council of the Judiciary, a government body.
for lawyers and solicitors there are no legal      However, there are no statistics available for
application fees.                                  these procedures.#




                                                   See item 50 above.I do not have access to the
                                                   latest statistics. In the first years of the
                                                   Adjustment of Debts Act (1 July 1994 to 21
                                                   december 1999) 22,638 applications were
                                                   submitted to enforcement authorities. Of these,
                                                   13,088 were refused. Some 3,400 applications
                                                   were granted, and some 4,800 cases reached
                                                   courts. More recent statistics are available from
                                                   the State Tax Office (www.rsv.se). There are
                                                   no statistics of the 4,800 cases that reached
                                                   courts as to how many of them were decided in
                                                   favor of the applicant. #As regards the
                                                   situation in 2000 to 2002, I attach a file. #
                                        55                                                       56
What is the minimum and maximum duration of Are there special problems with the mandatory
the mandatory pre-court procedure?#         pre-court procudure?#




No periods are prescribed, in the forms for     Please explain in detail and give examples:# -
bankruptcy of the Federal Ministry of Justice   Creditors do not react to extrajudical
there´s a statement period of 6 weeks to        agreement offers from debtors#- in demand
extrajudical agreement proposals from debtors   lists of creditors unauthorized, to high demands
to creditors.#                                  are made validly (demands and interests barred
                                                by statute of limitations or the like), only in the
                                                following judicial procedures they then often
                                                correct these registrations #- assignment of
                                                wages and contractual attachment of wages
                                                make extrajudical agreements more difficult #-
                                                there is no seizing protection during the balance
                                                phase, in addition no requirement on interests
                                                stop #- creditors and courts appoint themselves
                                                to inadequate extrajudical agreements in order
                                                to prevent or retard procedure openings#
Maximum of 4 months#   Please explain in detail and give examples:# Some
                       creditors, such as the tax office, systematically
                       reject plans negotiated by agreement with an
                       element of debt remission.#
We have no legislations about this. But it should Please explain in detail and give examples:#-#
not exeed considerably the 5 years prescribed
in debt adjustment act.#
In principle, the overindebtedness law gives the Please explain in detail and give examples:##
commission two months to set up the debt
rescheduling plan, but this time limit is not
always observed. #
Due to the principle of contractual freedom no     Please explain in detail and give examples:# The
minimum or maximum duration must be                main problem is that the court run consumer
obeyed.#In practice however, the principle of      bankruptcy system rather offers incentives to
contractual freedom is used insufficiently. The    file its proceedings than to reach an out of court
regular minimum duration is 5 or 6 years           settlement. Extra-judicial settlements have to
following the model of the court run bankruptcy    be negotiated actively. Interested parties have
system (see answer to question 70). The            to communicate and must be willing to
majority of creditors refuse shorter extra-        compromise. Unlike the court run bankruptcy
judicial settlements. Even though they refuse      system is less demanding. As long as this initial
offers which anticipate the court run bankruptcy   position will remain the mandatory pre-court
system.#                                           procedure will not develop its potential.#Two
                                                   main single problems are:#- Extra-judicial
                                                   negotiations are insufficiently protected against
                                                   enforcement measures. § 305a InsO - effective
                                                   since 1 December, 2001 - in fact regulates the
                                                   legal presumption that the pre-court procedure
                                                   has failed, if one creditor initiates an
                                                   enforcement procedure. But this new regulation
                                                   can work as an obstacle. Interested parties
                                                   could increase their efforts or could welcome
                                                   that a creditor initiates an enforcement
                                                   measure. The pre-court procedure would be
                                                   finished hasty.#- Assignment of wages remain
                                                   valid 24 months following the end of the current
                                                   calendar month on the date of the opening of
                                                   the court run proceedings (§ 114, para.1 InsO).
n/a#                                                         these 24 months give examples:#
                                                   Duringexplain in detail and the preferential n/a#
                                                   Please
Consumer bankruptcy##There is no mandatory Consumer bankruptcy##Not applicable##
pre-court procedure. The voluntary pilot debt
settlement programme envisages a 5 year
maximum discharge period.###
Maximum duration is 60 days (under art. 3 par.   Please explain in detail and give examples:# It's
2, l. n. 281/1998), but everyone can sue even    impossible to answer, because of the small
though procedure is not terminated.#             practice and official data availability.#




The law only sets a maximum time limit of six    Please explain in detail and give examples:##
months.#
max of three - five years, no minimum#   Please explain in detail and give
                                         examples:#The mandatory pre-court
                                         procedures ( the consumer bankruptcy act)
                                         were designed to offer debtors a clean slate
                                         and to increase the success rate of debt
                                         agenies. These procedures should have made
                                         the judicial route less appealing for creditors. It
                                         did not. #The financial differences between the
                                         voluntary and judicial process are too minimal
                                         to interest creditors. Creditors favour the
                                         judicial adjustment, which can be financially
                                         more attractive to them; in order to punish
                                         debtors for not paying the debt in full, have
                                         more faith in the uniform implementation of
                                         adjustments#In addition, various stakeholders
                                         interpret the procedures differently and
                                         evaluate how they can optimise their own
                                         interests.#For municipal and debt management
                                         agencies, the presssure to reach settlement
                                         diminished.#Judges perform their role yet,
                                         they also contribute to the failure of the very
                                         process they were deemed to strengthen:
                                         voluntary debt settlement.##




#                                        Please explain in detail and give examples:##
As with above, the General Council of the         Please explain in detail and give examples:# We feel
Judiciary does not collect this information.#     that the arrangement with creditors is not a
                                                  widely known process and, therefore, hardly
                                                  used. Private negociations are more fruitfull, to
                                                  a greater or lesser extent, but the pressure
                                                  exerted by a creditor, if more or less a strong
                                                  entity, is what can stop debt
                                                  renegotiation.##In any case, black-listing is the
                                                  alternative in these cases whereby the debtor
                                                  declares insolvency. This is normally the most
                                                  common response.#




The duration of the pre-court procedure varies, Please explain in detail and give examples:##
of course. A problem that arises here is that of
particular "waiting periods": it is only after
certain periods of time have elapsed from
notifications and service of information etc. that
the procedure can be carried on.#The
procedure with the enforcement agency takes
usually less than one year and most cases are
decided in less than six months. If the case
goes to the court, the time varies. It can take
several years for a case to go throuhgh all
appeal instances.#
                                           57                                                  58
Please describe briefly your court run consumer If your system differentiates between a pre-
bankruptcy system. #                            court and a court run system please describe
                                                the main differences between both
                                                procedures.#




In the judicial debt adjustment procedure           For an extrajudicial agreement the agreement
debtor companies have to explain formally their     of all creditors is necessary, in the payment
insolvency and the court opens the bankruptcy       plan in a judicial procedure it is sufficient that
over the assets of the debtor. #After opening 2     the majority of the creditors agree. #In the
possibilities of successfully terminating the       judicial procedure bankrupt's creditors have to
procedure exitst for debtors: #1.) Acceptance       announce the demands to the procedure, these
of a judicial payment plan or compulsory            demands concerning height and legal standard
settlement by a creditor majority. #The             are examined, in the procedure out of court this
payment plan has to contain a ratio to the          examination should take place by the debtors
bankrupt's creditors, that correspond to the        themselves.#
income situation of the next 5 years. This offer
is to be accepted during a hearing before court
of a majority of the present bankrupt's
creditors. #2.) Going through a probationary
period with discharge of debts. This procedure
comes into force if the offered payment plan did
not find creditor majority and if no introduction
obstacles do exist. #A trustee is appointed who
during the period of 7 years administers the
seizable part of the income of the debtor. These
amounts are passed on by the trustee to the
creditors. During the probationary period
obligations are imposed upon the debtor. After
the probationary period of 7 years it is
examined by the court whether the creditors
In the absence of agreement, the judge has the                       There is no difference in terms of procedure:
power to impose a settlement plan on the                             abatement, the value of the plan and avenues
creditors. The plan may incorporate various                          of appeal are similar.#On the other hand, the
measures, such as postponement or                                    contents of the plan are completely different.
rescheduling of debts, the reduction in the                          In an agreed plan, anything is possible provided
contractual rate of interest to the legal rate of                    the creditors agree, including full remission of
interest, suspension of the effect of security                       debts, preferment of a creditor, no time limit,
and assignments of credit and the remisson of                        etc. On the other hand, the judge must
interest on arrears, indemnities and charges.                        observe certain rules in formulating a judicial
The judge's duty is to ensure equal treatment                        plan (see above).#
of creditors.#The maximum duration of the
plan is set at 5 years, with the exception of
credit agreements, for which the time for
payment can be extended to half of the
remaining term. The objective is that, at the
end of the plan, the debtor will have been able
to repay his/her debts.#The plan can impose
significant sacrifices on the part of the debtor,
such as dedicating part of his/her unattachable
income to the repayment of debts. However,
the power of the judge to deviate from
protection of unattachable income is limited and
must be subject to a decision based on special
grounds and the debtor must in all cases
preserve income equivalent to minimum
subsistence levels and enable the debtor to live
with human dignity, taking family
circumstances into account (health, children,
Only individuals (not corporations etc.) can apply for Debt
Adjustment. #The Bankruptcy Act lays down two
prerequisites embodying (1) the hopelessness and (2) the
reasonableness requirements of the Danish "Fresh Start
Policy".#re (1): In the words of the Bankruptcy Act the debtor
must »prove that he is not able and within the next few years
has no prospect of being able to fulfil his obligations«#The
important thing is whether the debtor's payment of the debt
(in total) appears futile when seen in the light of the debtor's
present and future ability to pay. Whether this is the case
must be decided on the basis of a statement of the debtor's
actual debts compared with his present income and his
possibilities of raising means as well as a prognosis
concerning his future income.#re (2): If the economic
requirement (hopeless debt) is met the bankruptcy court
must look into the following rather vague requirement that
»the circumstances of the debtor and the facts of the case
speak in favour of Debt Adjustment«. The Act contains some
clarification in the form of a (non-exhaustive) listing of factors
to be taken into consideration when deciding on the
reasonableness requirement. The factors listed are »the
debtor's interest in Debt Adjustment, the age of the debt, the
origin of the debt, the repayment attempts and the debtor's
Debt arrangement is confirmed by the local          The pre-court procedure -the deptors
court. The first question is on the admissibility   negotiations whith the creditors- is an
of the application. The admissibility is decided    obligatory part of the court run. But the pre-
on formal and material grounds. Formal              court system can even lead to a deal betveen
grounds refer to the debtor's non-business          the debtors and the creditors. In this cases the
character, homestead etc. and, also to the          court procedure is unneccessary. The content
required formalities concerning provided            of the pyment plan in pre-court negotiations is
information on debts, creditors, estate and         not regulated.#
income. #The material conditions for
arrangement can be divided into three groups;
1. debtor's insolvency, 2. quality and source of
the debtor's insolvency and 3. the debtor's
loyalty towards his creditors. The material
conditions are valued by the court both in the
admissibility test and before the final
confirmation of the plan.#The court invites the
creditors either to an oral hearing or to present
their comments in writing on the claims the
debtor has disclosed as well as on the
arrangement he has proposed. The court is not
bound by the creditors' acceptance of the
proposal. If the debtor's proposal is accepted
the court will confirm a payment plan of
maximum five years. In special circumstances
there may be a plan with null payment.#The
duration of the payment plan may exceed five
In the context of the Overindebtedness Law,          see the answers below.#To summarise, the
the enforcement judge intervenes in the              procedure is as follows:#1- the debtor lodges a
following circumstances:#1- where there is a         file with the overindebtedness commission
disupte as to the admissibility of the application   CS)#2- the CS makes free proposals: this is the
to commence the procedure#2- where the               consent phase#3- if the consent phase fails to
recommendations made by the commission are           resolve matters, the CS draws up a debt
rejected#3- to approve the recommendations,          rescheduling plan under the economic rules
but the judge only has the power to check that       prescribed by law. If the plan is accepted, the
the law has been applied and not to adjudicate       file is submitted to the judge for approval. If it
on the economic viability of the plan.#4- the        is rejected by the debtor or by one of the
judge must approve the phase in which the            creditors, the judge takes the file over and sets
debts are purged. At that point, the judge           the plan him/herself.#4- where there is
exercises his/her full powers, and adjudicates       insolvency, the CS proposes a moratorium and
on the appropriateness and legality of the           release from debts to the judge ##
measures proposed by the commission.# #
1. Debtor's request to open insolvency              In order to understand the differences it is
proceedings (§ 305 InsO).#2. Debt settlement        worthwile to know that the legislative objective
proceedings accompanied by the court (§§ 306-       was that the pre-court and the court run
310 InsO)#The insolvency court tries to reach a     system should co-operate effectively and that
settlement with all creditors on the basis of a     the interested parties should regard the court
debt re-adjustment plan, provided that the          run system as ultima ratio.#The pre-court
majority of the creditors agrees to the terms.      procedure and negotiations are not subject to
Required is the majority of members and             any statutory regulation. It applies the principle
amount. The court may replace a refused             of contractual freedom. There is no minimum
consent of one creditor provided that the plan      duration or minimum content of extra-judicial
would not defeat the creditor compared with his     debt re-adjustment plans. Therefore the plan
prospects during the court run bankruptcy           can for example include the debtor's joint liable
system.#Since 1 December, 2001 debt                 relatives. Moreover, the pre-court proceedings
settlement proceedings are no longer                give the (last) opportunity to communicate
mandatory. The insolvency court decides             directly with the creditors.#The court run
whether the proceedings shall be carried out or     system is subject to a statutory regulation. Its
not. The court refuses the proceedings if it is     procedure is bureaucratic, lengthy and costly.
unlikely to succeed. The court will take into his   The debtor degenerates into an object of
consideration the course of the pre-court           attendance. Joint liable relatives cannot join the
procedure and the debtor's proposal whether a       proceeding which the principle debtor has
debt settlement should be initiated.#3.             initiated, but have to file their own petition.#
Simplified Insolvency proceedings (§§ 311-314
InsO)#The court designates the trustee. The
trustee has to utilize seizable assets. #The
debtor has to assign his seizable earnings for a
period of 5 or 6 years in favour of the trustee
who will yearly distribute the amounts among
Please see Attachment Q57#                          n/a#
Consumer bankruptcy##See points 1 and 46            Consumer bankruptcy##Not applicable##
for detail. However, it is important to
emphasise again that this legislation is entirely
unsuitable for consumer debt situations.##
It doesn't exists.#                                See above#




At the judicial level: lodgment of a petition at   The main difference between the two
the Justice de Paix, hearing before the Justice    procedures is that the Juge de Paix may impose
de Paix in two weeks, delivery of a judgment       a judicial rehabilitation plan even where there is
requiring the Service to set up a plan following   disagreement by one or more creditors,
the directions of the Tribunal de Paix and         whereas any refusal of a voluntary plan entails
following deposit of a plan drafted by the         the failure of the conventional settlement
Service, delivery of a judgment imposing the       phase.#
plan or delivery of a judgment confirming the
impossibility of achieving elimination of the
debts. #
The petition is to be presented along with a               Judicial debt adjustments are published in the
certificate to the court. In this certificate the court    Netherlands Government Gazette
can find all information concerning the specific           (Staatscourant), the (local) dialy newspapers,
situation. Court will set a date for (non-public)
                                                           and in the National Debt Adjustment Registry
hearing. Reasons for refusal for admittance to the
judicial debt adjustment (judge must refuse):              (Landelijk Register Schuldsaneringen) on the
petitioner can go on paying his debts, grouped fear        Internet. Pre-court system less proactive in the
that the petitioner wil try bring disadvantages to the     assets. Trustee active role in WNSP such as
creditors, it already applies to him (judge can            managing the debtor's assests, checking that
refuse): in the ten years before the petition was          are no excess assests and receives the debtor's
presented, the WNSP or bankruptcy was already              mail to verify that the debtor has no
applied, it is plausible that the petition did not enter
                                                           undisclosed income. Trustee reports on the
into one or more debts in good will.#If a debtor is
admitted, the judge decides on the length of
                                                           debt adjustment plan twice a year to keep the
payment period, the amount to be discharged and            court informed. #
goods accruing to the estate.#This amount is
calculated by the trustier and approved by the court.
#




The debtor held to be insolvent (due to inability #
to fulfil their obligations on time, through lack
of assets and credit) can apply to the court to
be declared bankrupt. The application should
contain the name of the debtor, the system
under which marital property is owned, the
names of all creditors and the respective sums
owed and details of any pending legal actions
and executions against him.## Apart from the
debtor, creditors and the State Prosecution
Department can also apply for a declaration of
bankruptcy.## The bankruptcy procedure is
considered an urgent one. The competent
court is that in the debtor‟s area of domicile.
## Once the application is received, the judge
issues a summons to the creditors or to the
debtor and the other creditors, depending on
whether the debtor or a creditor has launched
the action. These persons can oppose or justify
the sums owed, within a period of 10 days.##
At the end of this period, the judge studies all
the evidences. If he/she believes the
application is without foundation, the action is
archived; otherwise the action is allowed to
proceed.## If the action proceeds, and it is
As mentioned, the court run bankruptcy              The difference between the Arrangement with
system, in the case of private individuals, is      creditors (“quita y espera” ) and Creditors
two-fold; first, the debtor can voluntarily         Meeting lies in that, with the former there is no
initiate the aforementioned judicial process of     possibility of auction (less assets than debts)
arrangement with creditors; and the other           and it can only be instigated by the debtor to
process, voluntary or obligatory depending, is      seek a reduction (“quita”) of the debt or a
the creditors auction; voluntary if initiated by    delay on the repayment (“espera”). The
the debtor and obligatory if done so by the         Meeting of Creditors, however, is a judicial
creditors.##The latter consists of a process of     ruling on the estate, which can be initiated
collective action against the estate of the         directly by the creditors and not just the
debtor, and should be made when assets are          debtor. #
less than debts and current repayments cannot
be met. The creditors will ask for the auction to
begin when the following conditions are
established: two or more actions are pending
against the same debtor, and when there are
not enough goods free of other processes to
cover the amount demanded. Also, when the
agreement reached by the process of
arrangement with creditors is broken, the
corresponding auction will then take
place.##Once the auction has been legally
declared, the insolvent is prohibited from
administering and disposing of his belongings,
powers which pass to the trustee and to the
official receiver at a later stage, who take
As was explained under item 48, the                 See 48 and 57 above.#
enforcement official must remit the case to the
court, if a creditor objects to the adjustment of
the debt. The court then calls a meeting of the
debtor and all the creditors. The purpose of this
meeting is partly to enable the debtor and the
creditors to supplement the investigation by the
enforcement official and partly to debate
whether or not the debtor's application for
adjustment should be granted. The court then
takes a decision a) to grant adjustment of
debts, or b) to dismiss the application, or c) to
return the case to the enforcement official fur
further investigation.#It may occur that the
enforcement official dismisses an application
directly, without any investigation. Such
dismissal may be appealed to the court of first
instance. The court may then a) declare the
enforcement official's decision effective, or b)
carry out an investigation of its own and grant
the application, or c) return the case to the
enforcement official for further investigation. #
                                          59                                                 60
Who can be appointed as a trustee in the court-   Does your law offer a discharge at the end of
run system?                                       the procedure? Does the discharge also apply
                                                  to co-debtors?
i.e.: lawyer, social worker, debt adviser?#




Debtors can have any person as representative,    #In principle the debtors attain discharge of
there´s no obligatin for a lawyer. In practice    debts in the judicial debt adjustment procedure.
debtors are represented by debt advice            In the payment plan and/or compulsory
companies or attorneys. The court can also        settlement with fulfilment of the ratio accepted
appoint a "trustee in bankrupty" in complex       by the creditors, in the probationary period with
problem situations who supports the court         judicial resolution. In the probationary period
during the procedure.                             however fines and demands from bad actions
                                                  are excluded from discharge of debts (215 KO).
                                                   #The rights of the bankrupt's creditors against
                                                  joint debtors and vouch inside the debtors are
                                                  not affected by judicial bankruptcy proceedings
                                                  (§ 214 exp. 2 KO).#
Debt mediation is reserved to lawyers,           #The judge may order remission of debts where
ministerial officers, attorneys and authorised   it is indispensable for restoring the debtor's
public or private institutions (in practice,     financial situation.#Conditions imposed on the
Centres Publics d'Aide Sociale and money         debtor when debts are remitted are very strict.
advice organisations).                           Attachable goods will be sold and distributed to
                                                 creditors; the remission of debts will only be
                                                 effected if the debtor has followed a debt
                                                 settlement plan for a period of three to five
                                                 years.#The Law relating to collective
                                                 settlement of debts has made no specific
                                                 provision for joint debtors and
                                                 guarantors.#Where the joint debtor is the
                                                 spouse of the overindebted debtor, it may be
                                                 best for the spouses to submit a joint petition.#




Practising lawyers                               Please describe more detailed:#Discharge is the very
                                                 purpose of the entire procedure.#The discharge of a debtor
                                                 does not apply to co-debtors.#See answers to question 57
                                                 and question 65#
A person may be appointed as administrator, if       #Yes. In the payment program can debts be
he is an adult, is known for integrity, is not       adjusted both by reducing the amount of the
bankrupt, is not subject to restrictions of          unpaid debt and by cancelling the debt
competence and consents to the appointment.          completely. The discharge has no effect on co-
The administrator must have the competence,          debtor´s or personal guarantor´s liability.#
skills and experience required by his duties. He
shall not have a relationship with the debtor or
any of the creditors which might compromise
his independence from the debtor or his
impartiality between the creditors.#A bailiff or a
deputy bailiff may be appointed as an
administrator, but it is not common.
#Unless there is a situation of insolvency, when
 discharge from debts follows the moratorium
phase, the CS can make a number of
rescheduling plans until the debt is settled.
Where there is a reduction in the available
financial resources, the debtor can ask for the
plan to be revised.##
The Insolvency Act differentiates between#- a       #The Insolvency Act offers discharge of residual
trustee within the simplified Insolvency            debt unless claims are excepted (especially
proceedings#- and the trustee during the 5 or 6     claim in tort and fines, § 302 InsO). #At the
year period called "Treuhandphase" which can        request of a creditor, the insolvency court may
be translated as phase of good behaviour.#The       retract the grant of discharge of residual debt if
insolvency court designates a trustee for the       it is subsequently found that the debtor has
simplified insolvency proceedings under §§ 313,     infringed one of his obligations and thereby
56, para.1 InsO. Trustees shall be suited           impaired the satisfaction of the creditors to a
individuals, particularly experienced in business   considerable extent (§ 303 InsO).#Discharge of
affairs, and independent of the creditors and of    residual debt does not apply to jointly liable
the debtor. Debtors and creditors can nominate      relatives or other co-debtors.#
an individual. In practice the court designates
proven insolvency administrators and
lawyers.#Trustees during the "Treuhandphase"
(§ 292 InsO) may also be nominated by
debtors and creditors. § 288 InsO expressly
provides a right of nomination. In fact, the
court designates proven insolvency
administrators and lawyers, too.#




Official Receiver or an Insolvency Practitioner     #yes, see Attachment Q57, but not applicable
                                                    to co-debtors who are subject to their own
                                                    individual insolvency procedures#
Consumer bankruptcy##Appointed trustees are       Consumer bankruptcy##After 12 years (but the tag
either the Official Assignee (an officer of the   of bankrupt still applies to the debtor and will show
High Court) or a trustee (liquidator) chosen by   up whenever anyone searches the bankruptcy
                                                  register).##
the creditors.##
See above                                         #See above#




In practice, the Ligue Luxembourgeoise de         #A Fonds d'Assainissement (Rehabilitation
Prévention et d'Action Médico-Sociales (the       Fund) in relation to overindebtedness has been
Luxembourg Ligue for Prevention and Medical       set up within the framework of the
and Social Action), offers a wide range of        Overindebtedness Law, with the object of
medical and social services, including the        granting loans for the consolidation of debts
Service d'Accompagnement Social (Social           within a conventional settlement or a judicial
Support service), which aims to secure long       debt rehabilitation procedure. ##
term support for people who encounter social
problems of all kinds. The Service is ideally
placed to take on the management of the social
and financial situation of people who have had
recourse to the Overindebtedness Law. Both
the Mediation Commission and the Juges de
Paix have hitherto relied on the Service
d'Accompagnement Social for social follow-up of
overindebted people.#
Tijdelijk Besluit Subsidie Bewindvoerder            #yes, art. 343 and art. 358 Consumer
Schuldsanering, Staatsblad 1998, nr 590 and         Bankruptcy Act provides that all debt at the end
Besluit Subsidie Bewindvoerder Schuldsanering       of the term (maximum of 3 or 5 years) can no
Staatsblad 2001, nr 80. They state criteria.#In     longer be claimed. #
addition to lawywer, can non-lawyers be
registered as a trustee when they are when
they are employees of a trustee organisation
acknowledged by Raad voor Rechtsbijstand
(legal aid council).#




The trustee is appointed by a judge, and is         #No. The debtor has no right to any debt
chosen from a list of trustees, which exists in     discharge at the end of the process. He is only
each legal district. Duly qualified persons are     freed from the effects arising from the
recruited for this list, normally with experience   declaration of bankruptcy once all creditors are
in the sphere of company management or other        paid, or five years after condition of res judicata
appropriate professional experience (arts. 1 and    is established over the consideration of the
2 of Decree-Law no. 254/93, dated 15-7-1993)        trustee‟s final accounts (art. 238/1 of the Code
                                                    of Special Procedures for Company Recovery
                                                    and Bankruptcy).#
The trustees are chosen by the creditors, must      #The cancellation has to be voted voluntarily by
be adult, physically present, do so freely and do   the majority of the creditors, already explained.
not represent anyone nor intend to and live         The auctions´ objective, on the other hand, is
locally (art. 1215 old Law of Civil Procedure).     to sell off the estate of the debtor.##In the
                                                    case of common debt, the debtor can be
                                                    severely or jointly; with severely, all of the
                                                    debts can be reclaimed, only with clear
                                                    agreement. If jointly is assumed, the creditor
                                                    negociates settlements with each of the
                                                    debtors, then leaves them to decide on how to
                                                    proceed. #




See items 48 and 57 above. Sweden has no            #See item 48.Yes, a decision to grant
system for appointing counsel or trustee in debt    adjustment entails discharge - after the five-
adjustment cases. The obligation to investigate     year payment period. Discharge does not in any
rests with enforcement authorities.                 way affect the liability of the co-debtor
                                                    (guarantor, e.g.). Consequently, the latter
                                                    continues to be fully liable to pay, in accordance
                                                    with his obligation.#
                                           61                                                62
Is there any provision in your law that forbids   Does the procedure stop all the enforcement
discrimination of former bankrupts?               activities of all creditors?

                                                  Are there exceptions for mortgage lenders, tax
                                                  officials etc.?




no                                                A judical bankruptcy procedure principally
                                                  causes a seizing stop. Special arrangements
                                                  and/or exceptions exist for: #- creditors with
                                                  contestation-safe pledge rights at assets of the
                                                  debtors (inclusive mortgages), whereby
                                                  contractual attachment rights at the income
                                                  expire 2 years after opening (§ § 12, 1à KO) #-
                                                  fines are excluded claims in the procedure, i.e.
                                                  if fines cannot be paid, spare imprisonment
                                                  threatens #- if employers have existing setting
                                                  off claims against debtors (e.g. salary
                                                  advances), those rights to setting off expire 2
                                                  years after opening#- as per iurisdiction social
                                                  security institutions arrears can set off against
                                                  debtors temporally for an unlimited period #-
                                                  maintenance creditors are fully to be staisfied
                                                  regarding current maintenance and since
                                                  youngest iurisdiction regarding backward
                                                  maintenance payments#
no   Once a decision has been made as to the
     admissibility of the petition, the Cours des
     Intérêts and enforcement procedures seeking
     payment of a sum of money are suspended.
     Creditors can no longer seise goods or harrass
     debtors for payment.#




No   If the case is opened there is a general automatic stay of
     execution concerning claims eventually affected by the Debt
     Adjustment order. See answers to questions 64 and 66#
The Legal Register Centre maintains a register     After the start of debt adjustment, no measures
of matters pertaining to the adjustment of the     shall be directed at the debtor to collect a debt
debts of private individuals and everyone shall    subject to the stay on payment or to secure its
have access to the information in the register.    payment. Measures already begun shall be
Information is removed -when the debt              discontinued. The stay on collection provided
adjustment´s over- from the register.              herein includes, but is not limited to, the
Information remains in a register from which it    following:#1) the use of a right of liquidation or
can only be relieved for the purpose of checking   repossession based on collateral and the other
the bar on subsequent debt adjustment.#            use of collateral in order to receive
                                                   payment;#2) calling the debt and termination
                                                   or rescission of the underlying contract due to
                                                   late payment, except for the termination or
                                                   rescission of an overdraft facility in order to
                                                   prevent the incurring of new debt;#3) set-off
                                                   between the debtor‟s receivables from and
                                                   debts to the creditor, except for the set-off
                                                   referred to in the Tax Collection Act.#After the
                                                   start of debt adjustment, the assets of the
                                                   debtor shall not be distrained for adjustable
                                                   debts, with the exception of privileged
                                                   maintenance debt
no   Lodging the file with the CS does not
     automatically result in debt recovery measures
     being put on hold. The CS or the debtor must
     transfer responsibility for enforcement to the
     judge for civil debts, and to the tax office for
     fiscal debts.#
yes; #If discharge of residual debt or the        1) Execution prior to the opening of insolvency
request to open insolvency proceedings is about   proceedings: #If a creditor during the last 3
more than 10 years ago, it is not allowed to      months preceding the request to open
refuse a further request and discharge of         insolvency proceedings or after such request
residual debt (§ 290 para.1 no.3 InsO).#          acquired by virtue of execution a security
                                                  attaching the debtor's property forming part of
                                                  the assets involved in the insolvency
                                                  proceedings such security shall become legally
                                                  invalid when the proceedings are opened (§§
                                                  312, para.1, 88 InsO).#This protection is
                                                  insufficient, because the provision only includes
                                                  securities but not proceeds of utilization.#2)
                                                  Prohibition of execution:#Individual creditors
                                                  may not execute into the assets involved in the
                                                  insolvency proceedings or into the debtor's
                                                  other property during the insolvency
                                                  proceedings (§ 89, para.1 InsO). Enforcement
                                                  measures initiated by maintenance creditors
                                                  and entitled persons to obtain damages in
                                                  tort.#3) Until the court decides on the request
                                                  to open insolvency proceedings the court shall
                                                  take all measures appearing necessary in order
                                                  to avoid any detriment to the financial status of
                                                  the debtor, in particular the court may order a
                                                  (temporary) restriction on measures of
                                                  execution unless immovabels are involved (§ 21
no                                                InsO).#4) Together with the opening of
                                                  yes, but not excepted debts
Consumer bankruptcy#No. There is no such   Consumer bankruptcy##Enforcement activities
provision.##                               of creditors##S.38 of the Bankruptcy Act
                                           allows the court to grant a stay on the
                                           realisation of the bankrupt‟s estate as it deems
                                           appropriate, to enable him/her to make a
                                           composition with his/her creditors. Under S.87
                                           of the Act, a debtor may petition for the
                                           protection of his person and/or property from
                                           legal action in order to allow time for a
                                           composition to be made. S.136 provides that,
                                           on the making of an adjudication of bankruptcy
                                           against a debtor, a creditor shall cease to have
                                           any rights except those set out under the Act
                                           and will require the consent of the court to take
                                           any legal proceedings. Finally, S.137 allows the
                                           Official Assignee to apply to the court to have
                                           any legal proceedings against the bankrupt
                                           stayed.##Composition ##The Act provides for
                                           debtors making a composition with their
                                           creditors, supervised by the High Court.
                                           Providing 60% in number and value agree, and
                                           the court approves, the composition is binding
                                           on the other creditors also. An arrangement,
                                           according to a lawyer practicing in this area,
                                           can be drawn up so as to safeguard the family
                                           home (the family home is not protected in the
                                           event of bankruptcy, although the Official
                                           Assignee must have the permission of the court
                                           to sell the family home). ##Discharge
                                           following completion of arrangement##The
no   See above




no   Lodgment of the debtor's formal application
     with the Service d‟Information et de Conseil en
     Matière de Surendettement automatically
     suspends any existing enforcement procedures
     in relation to personal property or real estate
     except for enforcement procedures against a
     debtor which relate to maintenance
     arrears.#This suspension applies until expiry of
     the time limit provided for in article 6 of the
     Overindebtedness Law.#A creditor seeking an
     attachment will therefore not recover the
     attachable element during the phase
     suspending proceedings.#
no   #Articla 299. The procedure does not stop the
     enforcement activities of pawn rights,
     mortgage.#




no   A court declaration of bankruptcy prevents the
     initiation or pursual of any execution order
     against the bankrupt (art. 154/3 of the Code of
     Special Procedures for Company Recovery and
     Bankruptcy).
no                                                   The principal effect that is accquired with the
                                                     arrangement with creditors or auction is to stop
                                                     any future proceedings; if the debtor in this
                                                     situation faces whatever type of proceedings,
                                                     he can oppose the same citing whichever
                                                     position of arrangement with creditors or
                                                     auction.##Nevertheless, there is a series of
                                                     priviledged creditors and favoured credits. It is
                                                     a complex system based on the special
                                                     priviledge given to specific possessions,
                                                     depending if they are furnishings or property,
                                                     or else based on the type of creditor (first,
                                                     credits in favour of the State, illnesses, wages,
                                                     etc.).




yes; #The answer is no. There is also legislation    Yes, there is a specific rule about this.
to the effect that defaults, inclduing completed
debt adjustiment is recorded in various
registers. A record of debt adjustment may
remain in the register for the entire five-year
payment period and, in addition, till the end of
the year that began after the year of
completion of the payment period. During this
time it is difficult - not to say impossible - for
the person to obtain new credit, buy on
instalment, get a credit card, hire or car etc.#
                                           63                                                  64
Are there any preconditions to enter the           How is the actual home (rented or owned)
procedure?                                         protected?

i.e.: a qualifying amount (minimum or              i.e.: no eviction possible, mortgage debt
maximum amount) of debts, good faith,              reduced to the foreclosure price?#
previous bankruptcy filings, filing fees etc.?#



Conditions for the opening of a judicial debt      There is no special protection for property. Rent
adjustment procedure are according to § 183        contracts of the necessary dwelling are not
KO: #- no entrepeneurs activity #- insolvency      impaired by the bankruptcy proceedings, as
#- schedule of property#- submitting of a          long as no renting arrears are present.
payment plan offer #- certificate that procedure
costs are presumably covered #- proof of the
failure of a extrajudicial agreement
The following are the conditions for access to       The Law of 4 August 1992 on mortgage lending
the collective debt settlement procedure:#(a)        provides that, before being allowed to sell a
Being a natural person, not a business#Persons       property in order to repay a mortgage loan in
who were in business at one point may apply to       default, the creditor must attempt conciliation
engage in the collective debt settlement             before the juge des saisies (enforcement
procedure a minimum of six months after              judge).#
ceasing business activities or, if the business is
insolvent, once the business has been wound-
up.#(b) Be domiciled in Belgium#(c) Be unable
to pay their debts#(d) Not have deliberately
become insolvent.#On the other hand, good
faith on the part of the petitioner is not
required by law.#The work carried out in
drafting the Law refers to a series of
hypotheses which would not constitute
deliberately becoming insolvent, such as an
accumulation of debts before lodgment of the
petition, even where the debtor knew or ought
to have known that s/he could not pay them,
refinance through a single loan in excess of the
debtor's ability to pay a number of previous
debts, entering into credit agreements securing
a lifestyle beyond the debtor's financial
resources, negligence on the part of the debtor
aggravating his/her debts through the
accumulation of interest on arrears and
penalties.#On the other hand, debtors who
submit inaccurate 64
See answer to questiondocuments or make false        It is not an indispensable requirement for Debt Adjustment
                                                     that the debtor sells the house in which the family lives. The
                                                     decisive factors are whether the expenditure on housing is
                                                     unreasonably high and whether the debtor has a chance of
                                                     reducing it by moving to another place fulfilling the needs of
                                                     the household. If the house represents any free value it
                                                     should made available to the creditors. Thus, depending on
                                                     the circumstances a Debt Adjustment order may make it
                                                     possible for the debtor to keep the house. ##Mortgage
                                                     creditors and other creditors with secured claims are not
                                                     affected by a Debt Adjustment order in so far as their claims
                                                     are paid out of the proceeds in case of forced sale. The
                                                     question whether or not forced sale is to take place depends
                                                     on the ordinary rules and is not affected by the opening of
                                                     Debt Adjustment proceedings (Outside Bankruptcy). To the
                                                     extent a secured claim is not satisfied in full out of the
                                                     proceeds in case of realization a personal claim on the
                                                     debtor is all that is left and this claim is affected by the Debt
                                                     Adjustment order just like any other personal claim. Thus, at
                                                     the time of the order it can be uncertain whether or not a
                                                     secured creditor is affected by the order.#
Debtor's insolvency: The debtor is insolvent if        The mortgages are included in the proposed
he can not pay his debts as they become due            debt arrangement. Only that part of the debt
and this situation is not incidental. #Quality and     which the value of the security covers at the
source of the debtor's insolvency: An                  moment when the procedure is opened is
arrangement can be confirmed if either of the          considered secured. The value exceeding the
following conditions is fulfilled. The insolvency is   value of the security is treated as unsecured.
mainly due to unemployment, illness or other           The debtor should be able to pay the secured
like change in circumstances which cannot be           debt according to the original contract or with a
attributed to the debtor and there is no               minor extension affirmed by the court. If he is
reasonable way in which he could improve his           not able to do so the creditor may seize the
solvency.#The debtor's loyalty towards his             security. The value of the home is estimated by
creditors: The alternate condition is that the         the court.#If the debtor lives in a rented home
reason of insolvency is different but there are        the rent is be taken as a part of the nesessary
other weighty reasons for the arrangement              living costs in provided that the home isn´t
when the amount of debt is taken into account.         bigger and more expensive than
Typical example of the latter condition is the         resasonable.
case of a former business bankrupt. Also in the
latter case it is required that the debtor can not
reasonably improve his solvency in any other
way.
- the person starting the procedure must be a       For rented accommodation, see question
natural person acting in good faith (in respect     36.##The property owner is better protected
of the application to start a procedure) #- being   because the fact of being a homeowner does
overindebted through business debts (even if        not lead to automatic sale. The
business debts are taken into account in the        overindebtedness commission or the judge has
rescheduling plan) #- the debtor must not be        to demonstrate that the sale is necessary,
eligible for another procedure (laws of 1 March     which would not be the case if the debtor will
1984 and 30 December 1988)#- it is not              have to spend a sume equivalent to his/her
necessary to have stopped payments: the debts       monthly loan payments to obtain
must have fallen due for payment #- a person        accommodation.#There can be no forced sale
who is potentially insolvent, who has had their     because the procedure is voluntary in nature.
debts purged, cannot lodge a new file for a         If the debtor refuses to sell, the file is closed.
period of 8 years#                                  The debtor must have recourse to common law
                                                    proceedings. If the debtor agrees to a sale,
                                                    there may be a remission of the debts if the
                                                    sale price is insufficient to repay the debts.#
Certificate issued by a suitable person or       1) Home owned#(...)#2) Home rented #§ 109
agency from which emerges that within the last InsO
six months prior to the request to open
insolvency proceedings an unsuccessful attempt
has been made to settle out of court with the
creditors on the basis of a plan (§ 305, para.1
no.1 InsO). This plan has to be enclosed and
the main reasons of its failure have to be
explained.#The official application form has to
be used (effective since 1 April, 2002). #Since
1 December, 2001 debtors without means may
apply for extension of the court or filing fees.
Therefore they are not obliged to pay court or
filing fees in advance (§§ 4a ff. InsO).#Debtors
don't have to offer a qualifying (minimum)
quota. The Federal Court of Justice judged that
even a zero-option is not an obstacle to open
insolvency proceedings.#




minimum debt, court fees and process to be    iNo protection for assets in the name of the
followed #Please see Attachment 57            debtor save at the discretion of the Courts, or
                                              by agreement with the Official Receiver or
                                              Insolvency Practitioner appointed as Trustee.
                                              Where dependents live with the debtor the
                                              home may be protected from creditors for the
                                              first 12 months, thereafter the Officail Receiver
                                              can obtain an order for possession and sale
Consumer bankruptcy##See point 46 for detail   Consumer bankruptcy##It is theoretically
on pre-conditions.##                           possible to enter a court-supervised
                                               arrangement under which the family home may
                                               be protected (See point 62 for further detail)##
See above                                       See above




The collective debt settlement procedure is         As all enforcement proceedings have been
available to any natural person with a residence suspended, possession proceedings in relation
permit for the Grand Duchy of Luxembourg            to the debtor's home cannot be executed.#
facing long-term financial difficulties in relation
to all his/her non-business debts, which have
fallen due for payment.#Debtors who are in
business within the meaning of Article 1 of the
Code de Commerce are excluded.#However,
the procedure is available to such a person if
s/he has ceased his/her business activity at
least six months previously or, if s/he is
insolvent, if the business has been wound-up.
#A debtor who became deliberately insolvent
may also be ineligible.#
#The application for debt adjustment is issued      The no special protections for rented or owned
by municipality and used by the court to            home in case of peronsal bankruptcy. See on
determine whether reasonable grounds exist to       relevant provisions regarding end of rent
assume that the debtor will not attempt to          contract article 39 Faillissementswet. #
evade obligations arising out of the scheme and
whether he acted in good faith.#




The only requirement is that the debtor should      There is no protection for the family home. An
be unable to pay their debts though lack of         owned property can be executed for debt
assets or credit. This determines their situation   payment (mortgage debts or others). Eviction
of insolvency, which must be recognised by the      is also possible (except in the case of the very
court so that bankruptcy proceedings can be         elderly who, even in the event of non-payment
started.                                            of rent, cannot be evicted while they remain in
                                                    residence there). However, the declaration of
                                                    bankruptcy does not determine the termination
                                                    of a contract to rent, when the bankrupt is the
                                                    tenant, unless this is required by the trustee
                                                    (art. 169 of the Code of Special Procedures for
                                                    Company Recovery and Bankruptcy).
To be included in the main auction it is only       The ownership of the home is embargable. If
required to be a creditor and be able to prove      the owner fails to pay his debts, protection is
your credit accordingly.                            only offerered for furniture and household
                                                    effects. Nevertheless, the new Law of Civil
                                                    Procedure, in article 693, can stop this process
                                                    if the debtor can pay his outstanding debts, if
                                                    only just offering the opportunity once during
                                                    the duration of the loan. ##The same applies
                                                    when the debtor lives in rented property: a
                                                    precarious economic situation does not warrant
                                                    valid opposition to the eviction. Sin embargo, in
                                                    the case of non-payment and the eviction
                                                    process under way, the tenant can halt the
                                                    process if he pays the plaintiff or makes
                                                    available to the tribunal or notary the total
                                                    being claimed in the demand and the balance
                                                    leading up to the time of the planned eviction.
                                                    For this possibility to arise, it has to be for the
                                                    first time, likewise that the landlord, by
                                                    whatever self evident means, and with at least
                                                    four weeks notice prior to the claim, has
                                                    required payment and up to the date of said
                                                    claim, has not received payment.#



See above. The two conditions are: 1) other         1) If you are renting your home - which is quite
than temporary inability of the debtor to pay his   common in Sweden - you have right to keep a
debts as they become due and 2) specific            certain amount to pay the rent. An assessment
reasons. There are no qualifying amounts.           is made, however, of the home with respect to
However, if debt adjustment has been granted        the size of the family etc. You live in a
once, it is unlikely that is granted a second       "luxurious" flat, you have to move into a more
time. On principle, you are entitled to one fresh   modest one; and if you live in an attractive
start, not two.                                     neighbourhood, you have to move into a less
                                                    attractive area. #2) If you own your home, you
                                                    may keep it, provided that the related costs
                                                    (maintenance, interest) do not exceed what is
                                                    considered reasonable. To judge this is however
                                                    complicated, because it is often the creditor
                                                    who holds the dwelling as a collateral.The
                                                    creditor has to be able to rely on his right of
                                                    lien, but the court (or the enforcement
                                                    authorities) may, on certain conditions,
                                                    decrease the value of the collateral. In practice,
                                                    if his dwelling has any realization value, the
                                                    debtor has first to sell it and acquire a cheaper
                                                    place to live in before there is any point in
                                                    seeking adjustment of debts.
                                             65                                            66
Which kind of other security does persist?        Which other debts are excluded from discharge?

i.e.: reservation of property (car), wage         i.e.: taxes, alimonies, fines, torts?#
assignment, guarantees?#




The seizing regulations of the Execution Law      - maintenance payments #- fines#- demands
regarding subsistence minumum and assets do       from intentionally committed bad actions
apply (see in addition above question 43, 44).
-                                                             Certain debts cannot be remitted:#-
                                                              maintenance arrears, #- debts by way of
                                                              compensation for injury to the person arising
                                                              from an offence#- debts arising from an
                                                              subsisting insolvency once the insolvency
                                                              proceedings have been closed.#




See answer to question 64#The same principle applies to        All personal claims on the debtor incurred before the opening
reservation of ownership and when the claim is secured by a of Debt Adjustment case are affected by the writing down and
guarantor. While the liability of the debtor towards the       the payment plan on equal terms.
creditor as well as the guarantor is redefined by the Debt
Adjustment order the creditor's claim against the guarantor is
not affected.
If the asset is such that debtor may keep it      None.
(see 69), a collateral in them can in principle
surviive debt adjustment.
Arrears of maintenance are always excluded
from both debt rescheduling plan and in the
plan for purging the debts. #Business debts
are not excluded, nor are debts owing to public
officers (huissiers)#Tax debts are not excluded
either (see above)#Debts arising from the
criminal law system (fines) are excluded (article
708 of the Code de Procédure Pénale - Penal
Code) #
Personal rights: Loan guarantees and joint          Excluded claims under § 302 InsO are:#-
liabilities remain valid. The creditors' rights     damages in tort, provided that the creditor has
against debtors' co-obligors and guarantors         filed his claim referring to § 302 InsO,#- fines
shall remain unaffected by discharge of residual    and comparable obligations,#- interest-free
debt. The debtor, however, shall be discharged      credit granted to the debtor in order to pay the
of claims of co-obligors/guarantors in the same     court fees.#
way as he is discharged of the claims of the
creditors (§ 301, para.2 InsO).#Rights attached
to property: The creditors shall have the right
of disposition (§ 313, para.3 InsO)#Assignment
of wages: remain valid 24 months following the
end of the current calendar month on the date
of the opening of the court run proceedings (§
114, para.1 InsO). During these 24 months the
preferential creditor is entitled to the debtor's
seizable earnings.#




all assets and liabilities identified within the    student loans, court fees and arrears of child
bankruptcy process are subsumed, though             maintenance through the Child Support Agency
those subject to security need not participate.
If they do the security is surrendered and the
creditor loses any priority on that or any other
asset within the bankruptcy
Consumer bankruptcy# #We are not entirely         See above
sure what is meant by this question. However,
given that the Irish legislation is not consumer
bankruptcy legislation at all as such and
contains no provision for write off apart from an
arrangement or a composition, all debts
whether secured or unsecured persist once
proven and must be paid off. Only when 12
years elapses can a write off theoretically occur
and only under certain conditions (see point
46)# ###
See above                                       See above




Where a conventional or judicial plan has failed, Only maintenance pensions are protected by
creditors will recover their individual rights to the Overindebtedness Law.#
pursue their claims.#
                                                   Art. 299a Consumer Bankruptcy Act. Study
                                                   loans are excluded from coverage.#




Secured creditors keep this security during the    There is no discharge for any kind of debt.
bankruptcy proceedings and are paid
preferentially. Any part not paid by the sale of
assets encumbered with security is included
with the ordinary credits, who are subject to
pro rata payment (art. 209 of the Code of
Special Procedures for Company Recovery and
Bankruptcy).#On the other hand, the creditor
privileges of the State, local authorities and
social security institutions are extinguished on
the declaration of bankruptcy, and sums owed
to them are treated as ordinary debts (art. 152
of the Code of Special Procedures for Company
Recovery and Bankruptcy). Debts already
constituted during the bankruptcy proceedings
are excluded from this rule.
As mentioned in the previous question, non-        There are no such exclusions. Within the
embargable goods are; furniture and household      classification of household goods and property,
goods, and clothes of the plaintiff and family     there is a series of criteria which classifiy
that are not considered superfluous. Generally,    credits in a priortized way and which are
non-embargable goods are foodstuffs, fuel and      explained in the next question.#
others that the tribunal consider necessary for
the plaintiff and family to maintain a dignified
standard of living. ##The answer to question
39 what is the minimum interprofessional salary
of a debtor that can be embargoed. The
corresponding percentages that can be applied
are set out in this reply.##And regarding the
possibility of halting an eviction (rented or
private property), the details are explained in
the previous question.




As regards private individuals, security may be    Excluded from debt adjustment are#1) child
in the form of #1) reservation of property#2)      support#2) property held as collateral (The
guarantee#3) collateral in movable or real         enforcement authorities and court have certain
property                                           possibilities to decrease the value of the
                                                   collateral, see item 64.) #3) student loans from
                                                   the state that become due in the future #1
                                                   and 2 are always excluded, while 3 are
                                                   excluded if the court or the enforcement
                                                   authorities so decide in a particular case- which
                                                   they normally do. In general, all types of debts
                                                   are adjustable, including taxes, fines and
                                                   similar.
                                            67                                             68
Which kinds of priority claims do exist?          How much of the debtor’s income is allowed to
                                                  keep?
i.e.: taxes, rent, claims from necessary living
expenses?#                                        i.e.: percentage of income or fixed amount?




with exception of the special arrangements for The debtors has to remain the subsistence
contractually secured creditors and            minumum according to the Execution Law (see
maintenance creditors mentioned above, NONE. above question 43 and enclosed
                                               ExistenzminimumVerordnung03.pdf).
Privileges are suspended for the duration of the   In the context of collective debt settlement, the
plan for collective settlement of debts.#          judge may deviate from rules relating to
                                                   earnings exempt from attachment in a decision
                                                   based on special reasons (see no. 39), but the
                                                   debtor must retain an income equivalent to
                                                   Revenu d'Intégration Sociale (income
                                                   support).#




None                                               The rationale of Danish version of Debt Adjustment is to give
                                                   the debtor an actual possibility and restore his motivation to
                                                   pay the realistic part of the debts. As a rule of thumb the debt
                                                   is reduced so much that the debtor becomes able to pay the
                                                   remaining debt in five years. The percentage of reduction is
                                                   calculated on the basis of a prognosis of the debtor's
                                                   expected income and cost of living in the period in question.
                                                   The estimated costs of living should allow a »modest
                                                   standard of living« for the debtor and his household, i.e. the
                                                   same criterion as that used in the general rule on a debtor's
                                                   exempt assets.
Allmony to a child. Debts for necessary living    The debtor is required to devote all of his
expenses of the debtor; under the discretion of   income that is not necessary for living expenses
the court.                                        to pay to his creditors. The necessary living
                                                  expenses are counted as in the minimum social
                                                  aid contributions.
The law does not provide for a hierarchy of        The commission must calculate the amount of
creditors, nor for equality. The commission        salary exempt from seizure and the RMI,
must decide what is in the best interests of the   whichever is the greatest. However, the
debtor or certain creditors: whether to give       calculation of the amount exempt from seizure
preference to debts associated with a tenancy      is less favourable to the debtor since the Cour
to avoid eviction, to protect small, non-          de Cassation (national Appeal Court) held that
commercial lenders, to ensure repayment of         the calculation should not be made in
small loans. The commission may also punish        accordance with common law. #The scale for
creditors who have some responsibility for the     attachment of earnings and income is applied.
indebtedness by asking them to make a greater      This may encompass sums other than earnings,
contribution.#See above for tax debts.#            such as family allowances or services, see
                                                   above.#
                                                 The debtor is allowed to keep his earnings up to
                                                 which the earnings are exempt from seizure.#




tax, secured claims, general creditors in that   as agreed with the Officail Receiver or
order                                            Insolvency Practitioner appointed as Trustee in
                                                 Bankruptcy, based on what is reasonably
                                                 necessary for living expenses for the debtor and
                                                 any dependents. In practice the Trustee wil
                                                 allow the bankrupt to keep wages provided no
                                                 excess is saved
Consumer bankruptcy##In theory, as this is       See above
not modern consumer insolvency legislation
where the exemption of priority payments
(such as alimony) and a guaranteed minimum
income might be normal and given that it is
unheard of for employees (as opposed to small
traders) to avail of the Bankruptcy Act, there
are no provisions for retention of income.
However, S.71 of the Act allows the Court „to
make to the bankrupt out of his estate such
allowances as the Court thinks proper in the
special circumstances of the case‟##
See above                                      See above




In principle, tax debts assimilated into the   Attachable and assignable elements are set by
procedure have priority.#l                     the Grand-Ducal Regulation of 26.06.02. (cf.
                                               annexed table )
art. 3:288.1.a BW : bankruptcy costs [costs       Art. 295 Consumer Bankruptcy Act, Art. 475d
linked with the bankruptcy like the salary of the Wetboek van Rechtsvordering. #90 % of social
trustee and costs of evaluation] #art. 3:284.1 : assistance minimum.#
costs for necessary living expenses#art. 21.1
Invorderingswet : tax claims#




Secured debts.                                  When the bankrupt has no means of
                                                subsistence, and is unable to provide them
                                                through employment, the trustee may allocate
                                                a subsistence allowance which is paid at the
                                                expense of the revenue of the bankrupt‟s
                                                assets. The agreement of the creditors‟
                                                committee is required for this (art. 150/1 of the
                                                Code of Special Procedures for Company
                                                Recovery and Bankruptcy).
Besides special rules for the deposit and            As explained in question 39, the minimum that
inherent expenses, in the case of goods and          is not embargable is equal to the minimum
chattlels, the credit is guaranteed with a pledge    interprofessional salary. ##Anything above this
excluding the rest until it reaches the value of     amount is calculated as a percentage of the
the pledge.##In the case of real estate, the         minimum interprofessional salary as the income
preferences regarding credits are in favour of       level increases.
the Administration, the insurance companies
(two annual payments on the insured goods)
and the mortgages. ##There also exists a
credit preference system, as mentioned, that
classifies the belonging as being a household
item or real estate.




See item 66.#In debt adjustment cases, the           Under section 5 (7) of the Debt Enforcement
Adjsutment of Debts Act takes precedence over        Act (which applies to wage garnishing as well as
ordinary law on the priority of claims. Naturally,   to debt adjustment), the debtor may keep a
in other cases, a different order of priorities      certain amount. This amount, which is
applies.                                             determined once a year, must include all
                                                     regular living expenses (food, clothes, hygiene,
                                                     electricity, telephone etc.) and, in addition, the
                                                     amount corresponding to the actual cost of
                                                     habitation (provided this is reasonable and not
                                                     too expensive). #The amount for normal living
                                                     costs is now about 4.000 Swedish crowns per
                                                     month for a single person and 6500 for
                                                     spouses. Every child under 5 years increases it
                                                     by 2.200 crowns and a child above 6 year by
                                                     2.500 crowns. A married couple with housing
                                                     cost of 6.000 crowns and eight year old son and
                                                     a five year old daughter may keep 17.200
                                                     crown per month (6.500 + 6.000 + 2.200 +
                                                     2.500) #
                                              69                                             70
Which assets is the debtor allowed to keep?        What is the minimum and the maximum
                                                   duration of the repayment plan within the court
i.e.: defined by their function for work or        run system?
enumerated?#




In accordance with § 5 KO the debtors has to       Minimum duration: #Immediate payment of a
remain, "what is essential to a modest living."    unique ratio#Maximum duration: #7 years plus
Thus there is an interpretation clearance, that    extension by max. 3 years#Exceptions: #If a
again depends on the exemptions from seizure       payment plan or a compulsory settlement is
according to the regulations of the Execution      achieved, discharge of debts is reached with
Law (see in addition above question 44 and         immediate payment of the accepted ratio. #In
enclosed Exekutionsordnung.pdf,                    the probationary period the fundamental
ExistenzminimumVerordnung03.pdf).                  procedure duration is 7 years, after at least 3
                                                   years discharge can be given if the creditors
                                                   received a ratio of 50%. With a ratio of under
                                                   10% after 7 years running time, the
                                                   probationary period can be extended under
                                                   certain conditions again for 3 years (§ 213
                                                   KO).#
Certain goods are exempt from seizure by              Minimum duration: #3 years (only in the case of
creditors. The Law sets out a fairly detailed list.   judicial plans with remission of capital debt):
 Such goods include:#- necessary items for            there is no minimum duration for other
everyday life (beds, table, chairs, heating,          plans.##Maximum duration: #5 years (with a
washing machine, cooker, refrigerator, etc.)#-        possible extension of five years for plans with
books and other items used for education#-            no remission of capital debts)##Exceptions:
items essential for the debtor's occupation with      #The time for repayment of consumer loans
a value of up to 2,500 euros#- religious              may be extended. In that event, the new time
objects#- food and fuel for the debtor and            limit for repayment cannot exceed the term of
his/her family for up to a month#- a limited          the settlement plan set by the judge, plus by
number of farm animals with fodder and                half of the remaining term of these credit
bedding for a month.#                                 agreements. The general view is that this
                                                      provision cannot be applied unless the loan
                                                      agreement has not yet been cancelled. #




See answers to questions 68 and 64- 65.               The writing down of the debts is normally combined with a
                                                      payment plan concerning the remaining debts. Generally, the
                                                      payment period is the same as that on which the percentage
                                                      of reduction is based, i.e. normally 5 years (see answer to
                                                      question 68).
The debtor has rigt to keep nesessary tools and   Minimum duration: #Minimum duration is not
a car can be ones. Still the value of the car     stipulated. Court practice is very strict abiut
must be reasonable and if it´s too expensive      planss less thaan 5 years.#Maximum duration:
the debtor must change it to a cheeper one        #Maximum time is five year and its even the
(section 5 subsection 2, Act on the Adjustment    usually time. If the debtor keeps his home is
of the Debts of a Private Individual, 57/1993).   the maximum duration 10 year.#Exceptions:
                                                  #The time of payment can be extended with 4
                                                  mouths for covering the fee and expenses of
                                                  the administrator. If the creditor is a private
                                                  individual (private creditor), the duration of the
                                                  payment schedule may upon his request be
                                                  extended by at most two years from the time
                                                  when it ends as regards other ordinary debt. #
The list is contained in the "endettement et    Minimum duration: #There is no
surendettement", accessible on the              minimum#Maximum duration: #The CS must
Internet:#http://www.inc60.fr/page/bases.2_le   reschedule or delay for a period eight years or
s_guides./Action-detailguide/guide-1151-        for current borrowings over half of the
Endettement_et_surendet.xml.                    outstanding repayment period. #If the term
                                                has expired, the time period may be up to half
                                                of the time left to run prior to default.
                                                ##Exceptions: #No exception#
See answer to question 44.                        Minimum duration: #Commencement of
                                                  insolvency proceedings on 1 December, 2001 or
                                                  after the so called "Treuhandphase" (phase of
                                                  good behaviours) is 6 years. Commencement of
                                                  insolvency proceedings before 1 December,
                                                  2001, the "Treuhandphase" is 7
                                                  years.#Maximum duration: #6 (or 7) years as
                                                  mentioned above; there is no difference
                                                  between minimum and maximum
                                                  duration.#Exceptions: #5 years by illiquidity of
                                                  the debtor before 1 January, 1997 (Article 107
                                                  EGInsO - Introductory Law of the Insolvency
                                                  Act). For commencements of insolvency
                                                  proceedings on December 1, 2001 or after an
                                                  unconsistent jurisdiction has started whether
                                                  Article 107 EGInsO is applicable or not. The
                                                  reason is that Article 107 EGInsO only refers to
                                                  the original duration of 7 years and not to the
                                                  new duration of 6 years. The legislator simply
                                                  forgot to ammend the wording of Article 107
                                                  EGInsO.#




Tools, books, vehicles and other items of         Minimum duration: #12 months#Maximum
equipment which the debtor needs to use           duration: #5years#Exceptions: #the debtors
personally in employment, business or vocation,   conduct during the period may lead to it being
and clothing, bedding, furniture, household       extended#
equipment and other basic items necessary for
the debtor and dependents
Consumer bankruptcy##S.44 of the Act              Consumer bankruptcy##The minimum duration of
provides in general terms that all property of    the bankruptcy will be until full repayment of all
the bankrupt person vests in the Official         debts due or until a composition is accepted by 60%
                                                  of creditors and all payments and costs are made
Assignee for the benefit of the bankrupt‟s
                                                  under it or where the bankrupt has obtained the
creditors. S.45 allows the bankrupt to retain     consent of all creditors to discharge.#The maximum
articles of clothing, bedding, household          duration is potentially the lifetime of the bankrupt
furniture and tools or equipment of his/her       although after 12 years a discharge is possible. This,
trade not exceeding €3175. The Court has the      however, is dependent upon the Court forming the
power to decide, on the application of the        view that the estate has been fully realised and that
Official Assignee or the bankrupt person, which   costs, fees and expenses as well as preferential
                                                  payments have been taken care of.##
articles of property remaining are to be sold
(for example motor vehicles) for the benefit of
creditors and can postpone sale and removal
and allow goods to them to remain in the
possession of the bankrupt as appropriate.##
See above                                       Minimum duration: #See above#Maximum
                                                duration: #See above#Exceptions: #See above#




Article 728 of the Nouveau Code de Procédure    Minimum duration: #The law does not set a
Civile (New Civil Procedure Code) lists goods   minimum time period.##Maximum duration:
which cannot be seised (copy attached).#        #The plan cannot exceed a period of 7
                                                years.#Exceptions: #The law does not provide
                                                for any exceptions.#
Art. 447 Wetboek van Rechtsvordering,           Minimum duration: #        #Maximum duration: #3 -
exemptions are all goods for daily maintenance, 5 years#Exceptions: #       #
tools used by craftsman in their personal
business, any utility needed for education or
other purposes for arts and science. #




Items the seizure of which would offend good        Minimum duration: ##Maximum duration:
practice or lack economic justification, due to     ##Exceptions: ##
their low cash value; goods necessary for any
household economy that may be in the home of
the debtor, unless the payment of the purchase
price or repair of such goods is at issue; articles
essential to disabled persons and those used to
treat sick persons; tools required for work and
articles essential for the exercise of a
profession, unless the debtor has designated
them for attachment, or the payment of their
purchase price or repair is at issue (articles 822
and 823 of the Code of Civil Procedure).
Of course we have only referred to salaries,       Minimum duration: ##Maximum duration:
whilst there are other sources of business and     ##Exceptions: #There are no minimum or
professional income which do not fall under the    maximum durations for repayment once the
protection of Consumer law. Nevertheless,          legal claim begins. Once the embargos have
these professional sources of income are           been carried out they continue until the creditor
included in the overall calculation of income      is repaid. The Civil Code specifies that<<The
received by the debtor. ##Also, belongings         fulfillment of the debtors obligation lies with all
which have been declared non transferable are      his current, and future, belongings>> #
non embargable; secondary rights, which are
not transferable and unconnected to the
capital; goods that lack, on their own, asset
value; and belongings declared by any legal
order as being non impoundable.




Clothes, chattel, radio, TV, stereo set, furniture, Minimum duration: #The payment period is
tools etc.; also car, if it is not "luxurious".     usually fixed at five years. For specific reasons
                                                    a longer or shorter period may be set (section 8
                                                    of the Adjustment of Debts Act).In practice, the
                                                    period is always set at five years. #Maximum
                                                    duration: #See above.#Exceptions: #See above.#
                                          71                                             72
What are the fees for the trustee? Please give    How are these fees paid?#
figures.#




The costs of the trustee in the probationary      Through retain from the amounts which the
period are in accordance with § 204 KO 4% of      trustee gets from the asignment.#
the first 22,000 euro of the amounts which are
transferred to the trustee because of the
asignment, 2% from the excess amount to
100.000 euro and 1% of the amount going
beyond it, at least however 10 euro monthly, in
each case plus Value Added Tax. #For the
trustee in the bankrupty proceeding there is a
special rule in § 191 Exp. 1 KO with a minimum
of EUR 750, - for their activities.#
The scale of fees for mediators is set by the                   see reply to question n° 53#
royal decree of 18 December 1998 establishing
the rules and rates for setting fees,
emoluments and charges of debt mediators.##




The size of the fee is decided by the bankruptcy court taking   As a main rule by the state#
into account primariily the reasonable time spent by the
trustee. In an ordinary case the starting point seems to be
approximately 10.000 DKK (1.350 EUROs)#
The fees depend on the number of debts.#1-4    The debtor shall cover the fee and expenses of
debts 380 €; 5-14 debts 480 €; and over 16     the administrator to an amount not exceeding
debts 670 € plus excises.#The cost of copies   the available funds of the debtor over the four
and postages been added. #                     months following the confirmation of the
                                               payment schedule. The amounts may be taken
                                               also from funds received by the debtor after the
                                               start of debt adjustment. The part of the fee
                                               and expenses of the administrator not covered
                                               by the debtor shall be paid from state funds.#
no fees, no trustee#   #
5 % of the first 25.000,- Euro of the debtor's      The majority of debtors apply for respite. The
seizable earnings, other payments or other          law (§§ 4a ff. InsO) allows requests for a
proceeds,#3 % from the excess amount to             respite since 1 December, 2001. The seizable
50.000,- Euro,#1 % of the amount going              earnings during the 5 or 6 year "phase of good
beyond 50.000,- Euro.#The remuneration              behaviours" will be primarily used to settle the
amounts to at least 100 Euro for each year of       deferred fees. But privileged creditors under §
the trustee's activity (§ 14 Insolvenzrechtliche    114, para.1 InsO come first.#
Vergütungsverordnung - InsVV).#




The Trustees fees are subject to agreement          from the assets falling into the hands of the
between the debtor and the Trustee. Charges         Trustee#
are often made on the basis of 'time spent'
though may also be calculated as a percentage
of the bankrupt's estate.#The Official Reciever
will in the early stages of a bankruptcy incurr
expenses with regard to investigation into the
assets comprised in the bankrupt's estate, the
advertising of the bankruptcy and the
convening of a creditiors meeting. The cost of
this will be coverd by the deposit required to be
paid into Court as a precondition of the
bankruptcy application.#
Consumer bankruptcy##The fees that the           See above
Official Assignee is entitled to charge are
administrative as opposed to personal as s/he is
an officer of the High Court and is not entitled
to remuneration. The details of these fees are
contained in: Superior Fees Order: Schedule 1,
Part 7 – Fees payable in the Office of the
Official Assignee in Bankruptcy. A copy of these
can be provided upon request. These fees are
also payable under this order to the creditor‟s
trustee where appropriate. Finally, S.112 of the
Act allows a statutory sitting of creditors to
appoint their trustee and to make provision for
his/her remuneration.##
See above#                          See above#




The procedure is free of charge.#   #
art. 71 Consumer banruptcy Act. The fees are set at      Article 320 Consumer bankruptcy Act. The fees
the end of bankruptcy. They are determined by the        are (01/06/2002-01/06/2003) for a singel case
judiciary based upon richtlijnen in faillissementen en   € 30,94 (inclu VAT) and double case € 36,89
surseances van betaling. #
                                                         per month. The court may set a lower or higher
                                                         fee. #




The judge fixes the fee of the trustee (art. 5/1         Fees are paid by the Cofre Geral dos Tribunais
of Decree-Law no. 254/93, dated 15-7-1993).#             (Courts General Treasury), which has to be
                                                         reimbursed by the bankrupt's assets (art. 5/1/2
                                                         of Decree-Law n. 254/93, of 15-7-1993).#
The trustees have legally set fees which vary     The aforementioned amounts are deducted
according to the type of estate dealt with:#-0,5 from the total of the auction according to a
% of public effects;#-2 % of the cash value of    preferencial form of payment.#
jewellery, furniture, non-static goods or profits
that come from the administration of the
impounded goods;#-1 % of the cash value of
the sale of real estate and the auction rights;#-
5 % of cash activities of the operation not
linked to the aforementione;#-travel expenses
connected incurred to carry out the
operation.#The total amount is divided in equal
parts, if nothing is specified to the contrary. #




There is no such function.#                      See 71.#
                                           73                                                    74
Are there special problems with the court run        Is there any special law on debt counselling?
system?




- the special treatment of contractual secured       yes; #There is no special "debt counselling law",
creditors (§ 12 a KO) complicates the procedure      relevant regulations are: #- § 12 Insolvency
#- creditors do not claim the demands to the         Law Introductory Law: Privilegation of a debt
bankruptcy proceedings and frequently try to         advice company# § 12. (1) The Federal
execute the demands after the procedure#- the        Minister of Justice has to give the privileg to a
set-off rights of the social security institutions   debt advice company if#1. it is not directed
and the privileged position of maintenance           toward profit, #2. the consultation it offers is
creditors make bankruptcy proceedings more           free of charge, #3. it is reliable, #4. it works on
difficult#- the duration of the bankruptcy           the average of at least three debt advisors in
proceedings is not taken into account in the         the financial year all day busily, #5. it has an
duration of the probationary period#- the 10%        up-to-date organization aligned at the
minimum ratio in the probationary period is an       requirements of a quality management and #6.
arbitrary one and especially is for income-weak      it successfully works for at least two years in
debtors and debtors in precarious employer-          the area of the debt consultation. Before the
employee relationships an obstacle for               decision a statement of the umbrella
discharge of debts#                                  organsiation of the debt advice companies is to
                                                     be caught up. #(2) The privilege expires with
                                                     the dissolution of the debt advice company.
                                                     The Federal Minister of Justice has to determine
                                                     an expiring by decision. #(3) The Federal
                                                     Minister of Justice has to extract the privilege
                                                     with decision, if the conditions among whom it
                                                     was given are ommitted. The umbrella
                                                     organisation of the debt advice companies has
                                                     to report to the Federal Minister of Justice on
-                                                           yes; #Debt mediation services are authorised by
                                                            the Communities. There is a number of decrees
                                                            regulating the activities of debt mediators (see
                                                            annex).#




It has been argued that the vague criteria (see answer to   No
question 57) have created big local differences in court
practice
No.   yes; #Act of Economy and Dept Counselling
      2000/713 abouth free debt advisory.#
yes; #Agents offering to set up a repayment
plan and to negotiate with creditors for
remuneration are prohibited #(see code de la
consommation L.321-1)##
See at first answer to question 58.#1.             yes; #Individual money advice responsibilities or
Application form: #Until 1 April, 2002 the         matters are regulated by#-
debtor was not obliged to use a special            Rechtsberatungsgesetz (Legal Advice Act),#-
application form, however, three different forms   Bundessozialhilfegesetz (Federal Social Security
had been common. Especially one                    Act) and#- Insolvenzordnung (Insolvency
comprehensive form, developed by an expert         Act)#In Germany, money advice is construed
group of debt counsellors, gained acceptance       in a wide sense as "money-related social work"
even among the courts. The new official            (see question 78 below). Money advice
application form is a step backwards. It is too    therefore also involves legal advice. In
large-scaled (about 30 pages) and does not         Germany, money advice must therefore deal
meet the needs of ordinary debtors.#2.             with the criticism brought by the legal
Privileged treatment of assignment of wages (§     profession – albeit now only occasionally – that
114, para.1 InsO). Fore more details please see    it breaches the Rechtsberatungsgesetz (Legal
answer to question 56.#3. Debtors' supervision     Advice Act). Bundesgerichtshof (German
by the trustee: #The debtors will not learn a      Supreme Court) decisions have drawn a
productive crisis management.#4. Debtors           distinction between soziale Beratung (social
without means:#The court run proceedings are       advice) and Rechtsberatung (legal advice) on
too lengthy and costly. An alternative court       the basis that legal advice is only impermissible
procedure is needed for this group of              where the principal activity of the adviser is law-
debtors.#5. Debt settlement proceedings            based. #§ 8 Bundessozialhilfegesetz (Federal
accompanied by the courts:#Since the debt          Social Security Act) provides the general legal
settlement proceeding is no longer mandatory,      basis for money and other advice for
the interested parties as well as the courts       overindebted households which are entitled to
ignore it and the chances to reach a settlement    claim state benefits. § 17
are getting worse. Therefore this proceeding       Bundessozialhilfegesetz sets out the relevant
should be enhanced again. The court's legal        obligations and duties. #The
power to replace a refused consent of a creditor
no                                                 Rechtsberatungsgesetz however restricts
                                                   no#     #
                                               No.#There is no special law on dept counselling
                                               in Greece.#




Item 73 – Consumer bankruptcy##These have Debt Counselling #There is no specific law on debt
already been outlined in detail (see in particular counselling.##
the note at Item 46). In summary, this is a
totally unsuitable vehicle for self declared
consumer bankruptcy. Equally, because of the
potential expense involved, it would not be wise
for a creditor to seek to bankrupt a debtor
unless there was evidence that that person had
resources to offer at least partial payment. For
example, it is estimated by one practitioner in
the area that with advertising costs and
solicitor‟s and barrister‟s fees, the costs in a
bankruptcy case will almost certainly exceed
€7500. ##(Source: Debt Collection and
Enforcement of Judgments, Continuing Legal
Education, Law Society, Dublin 1998
See above                                           yes; #See above: only "mediatori creditizi" (art.
                                                    16 l. n. 108/1996 in attachment) can make
                                                    counselling about debt; pay attention to the
                                                    difference between "mediatori creditizi" and
                                                    "agenti in attività finanziaria": the former
                                                    advices about debt but he's not independent,
                                                    and he acts not on behalf of consumer, because
                                                    he steady have to bring on lender's business;
                                                    others ("mediatori", similar to brokers) whereas
                                                    make counselling as a complete service, only to
                                                    make consumer able to choose best lender
                                                    (relative to his situation and needs).#As public
                                                    organizations, political responsibility of
                                                    consumers consciousness about lending is in
                                                    Ministero delle Attività Produttive (before
                                                    Ministero dell'Industria: see above the
                                                    website); but there are no specific public
                                                    organization in this field.#




As the Overindebtedness Law is relatively new,      yes; #Within the framework of the
and as the number of cases dealt with in the        Overindebtedness Law of 8 December 2000,
judicial phase is not high, there have still been   the Service d'Information et de Conseil en
no major problems. #                                Matière de Surendettement was set up and its
                                                    missions were defined by the Law. The formal
                                                    application to engage in the collective debt
                                                    settlement procedure can only be filed with the
                                                    Service d'Information et de Conseil en Matière
                                                    de Surendettement.#
                                                yes; #Consumer Bankrupcty Act, Wet
                                                schuldsanering natuurlijke personen.##




Lengthiness of court procedures is one of the   no##
main problems in the Portuguese judicial
system.
We are dealing with an extradordinarily              no##
insitiutionalised system. The main problem is,
therefore, related to the necessary expertise to
be able to actively participate in the auctions.
#However, it is not normal for a consumer to
appear before this type of procedure, as it
cleary shows the economic difficulties that he
surely has previously gone through, and what
the non-payment of a few bills would place on
the creditor for out of court and judicial claims.
##Finally, it would be a good thing if there
were flexible procedures that allow feasible
payment schedules, always guaranteeing the
right of the creditor to his credit and the act of
good faith between the parties involved.




There are no special problems at all.                yes; #Yes, municipalities are obliged to provide
                                                     counselling for household budgets as part of
                                                     their consumer guidance. This may entail
                                                     assistance in the submission to enforcement
                                                     authorities of applications for debt adjustment.#
                                          75                                             76
What does it regulate (i.e.:)?                 Are there any restrictions on who is allowed to
                                               give debt advice?#
i.e.: public, private or non-for-profit
organisation, access, qualification?#




see aboce question 74.                         No.#
The various enactments providing for debt         Acting as debt mediator is restricted to the
mediation have a common thread:#- debt            following;#- lawyers, ministerial officers who
mediation must be carried out by an institution   are notaries, huissiers, mandataires de justice
organised on a legal basis;#- the institution     (receivers) are mediators « as of right», as a
must not be run for a profit;#- the institution   result of their profession or function. They do
must include a social worker and a lawyer with    not need to be authorised or accredited to act
suitable training or experience;#- institutions   as mediators;#- institutions which must be
must meet conditions of independence from         accredited in order to act as debt mediators.#
lenders and their intermediaries as well as
standards of integrity;#- the cost of mediation
is regulated;#- an authorisation procedure is
set up;#- support may be provided by the
competent authority.#




                                                  No
The municipalities have to establish or ensure   The law stipulates that dept advice can be
that free debt advice is available, offered by   given by a person who have the skills and
themselves or by some non-commercial body        experience required by his duties.#
but even from a private organisation. It can
even ben arranged by several municipalities
together.
Intermediaries are the only ones prohibited for Only legal advice is regulated and must be
the purposes below..#Consumer associations      provided by or under the supervision of
can help and social workers may give advice     qualified persons.##
and assistance to debtors. However, helping an
overindebted person must be free of charge.
Only lawyers can be remunerated for services
before the overindebtedness commission or the
judge.#
Please see answer to question 74.   There is just a restriction on who is allowed to
                                    give insolvency advice. § 305, para.1 no.1
                                    Insolvenzordnung states that the debtor shall
                                    submit a certificate issued by a suitable person
                                    or agency from which emerges that within the
                                    last six months prior to the request to open
                                    insolvency proceedings an unsuccessfula
                                    attempt has been made to settle out of court
                                    with the creditors on the basis of a plan. The
                                    German Länder may determine which persons
                                    or agencies are to be regarded as suitable. The
                                    implementing statutes of the Länder have fixed
                                    the relevant preconditions with slight
                                    differences. Typical preconditions are: There
                                    must be at least one experienced adviser, one
                                    adviser should be a trained social education
                                    worker (or similar profession), legal advice
                                    must be ensured.#




n/a                                 no, subject to restrictions on regulated
                                    activities under financial services legislation,
                                    and a requirememt to obtain a consumer credit
                                    licence if appropriate activities are being carried
                                    out#
No answer (see answer in question 74)          Since there is no special law regulating
                                               provision of debt advice as a profession (see
                                               answer in question 74), such advice might be
                                               (theoretically though-please see below under
                                               77) provided as a service under the general
                                               conditons for a trade, i.e. be provided by
                                               professional advisers or legal entities that have
                                               included this acitivity in their statutes and have
                                               stated (registered) to do so in the competent
                                               Chamber.#




Debt Counselling#There is no specific law on   Debt Counselling#Although there is no licensing
debt counselling.##                            system for debt counseling/money advice, the
                                               network of Money Advice and Budgeting
                                               Services (MABS) is State funded and continuing
                                               funding is dependant on each service satisfying
                                               the Department of Social and Family Affairs
                                               (the funders) that it has met the objectives of a
                                               three year plan that each service must set
                                               itself. MABS is supported by a National Training
                                               and Community Development Service located
                                               within Comhairle which has responsibility for
                                               the training and development of staff and
                                               voluntary management committees and has
                                               produced „A Good Practice Manual for Money
                                               Advisers‟.##
"Mediatori creditizi", corporation or natural         No.#
persons, are private operators, that are looking
for their profits; they cannot carry on other
business, except for professions (as lawyer,
doctor, but in many professional organizations
is forbidden to carry on business).#For access
preconditions see above.




The collective debt settlement procedure is           The Service d'Information et de Conseil en
available to any private individual who is not in     Matière de Surendettement is the only body
business within the meaning of Article 1 of the       authorised to intervene within the framework of
Code de Commerce.#However, the procedure is           the Overindebtedness Law of 8 December
available to person who is in business as             2000. #
defined if s/he has ceased his/her business
activity at least six months previously or, if s/he
is insolvent, if the business has been wound-up.
#
It regulates the subject where a debtor seeks        no
assistane for over-indebtedness with a debt
mangement agency for voluntary debt settlement.
#Debt management is a local responsibility,
municipalities are fee to organise it any way they
wish. #Even though no law regulates debt
management, most agencies adhere to a code of
practice developed by the Dutch Association of
Municipal Banks (NVVK). #




                                                     The law does not make any reference to debt
                                                     advice.#
See question 74.   There are no conditions for this type of
                   consultancy and if they existed it would be on
                   an exclusively private basis.#




see 74.            No.#
                                          77                                                     78
What are the main agencies providing this          What kind of services do they primarily provide?
advice?#
                                                   i.e.: budgeting, court oriented assistance,
                                                   psychological support?#




Non-profit consulting institutions, usually        Household budget analysis and optimization
independent carriers in forms of associations or   #settlement of debts out of court/judicially
non-profit limited companies, financed             #socialeducational support #preventive offers
predominantly by the countries.#
Centres Publics d'Aide Sociale and some non-   Budgetary guidance #Negotiations with
profit organisations#                          creditors for extensions of time for payments.#




Consumer organisations#                        Budgeting
The ones municipalities arrange.#   1. To give private persons general advice on
                                    budgeting and abouth how to take care of debts
                                    #2. To help planning their households#3. To
                                    settle problems connected with the debtors
                                    economy and a way out. To help the deptor
                                    when he tries to reach an agreement whit his
                                    creditors#4. To assist the deptor whith the
                                    petitioning for debt adjustment, with the
                                    accounts and documents and#5. Lead the
                                    debtor to seek legal aid when nesessary.
There is no agency.#
The main agencies providing debt advice are:#-      Historically, money advice in Germany has been
local authorities (i.e. youth welfare department,   treated as a social work activity. As well as
social welfare authority),#- church welfare         dealing with the settlement of debts, it
organisations (especially Caritas and               includes, for example, defending debtors,
Diakonisches Werk),#- other welfare                 advice relating to securing minimum income
organisations (i.e. Arbeiterwohlfahrt/workers'      entitlement, psychological and social
welfare, Deutsches Rotes Kreuz/German Red