In the Official Gazette no. 261 of March 30, 2020 was published the Government Emergency Ordinance no. 37/2020 regarding the granting of facilities for the loans granted by credit institutions and non-banking financial institutions to certain categories of borrowers.
The beneficiaries of the above mentioned emergency ordinance are: natural persons, authorized natural persons, individual companies and family businesses that operate under GEO 44/2008, the persons exercising liberal professions and the ones exercising on the basis of special laws, regardless of the form of exercising the profession, as well as the legal persons – parties in the credit or leasing contracts.
The facility granted to the debtors: the obligation to pay the outstanding installments arising from the loans, representing capital, interest and commissions due on the date of entry in force of GEO, is suspended on request of the debtor up to 9 months, but no later than 31.12.2020.
Requirement to be observed in order to benefit from the suspension of the installments:
- The loans for which it is granted the facility do not register arrears on the date of establishing the state of emergency in Romania or the debtors made the payments of these arrears until the date of the request for suspending the payment obligation;
- It is granted exclusively to debtors whose incomes have been directly or indirectly affected by the serious situation generated by the coronavirus pandemic, in accordance with the application norms to be issued;
- The loan agreement did not reach maturity and the creditor did not declare the early maturity, prior to the entry in force of the ordinance.
In addition, the companies shall cumulatively meet the following conditions:
- Interrupt their activity, in whole or in part, as a result of decisions issued by the competent public authorities according to the law, during the decreed state of emergency and hold the certificate for emergency situation issued by the Ministry of Economy, Energy and Business Environment (following the procedure provided by Order no. 791/2020);
- The companies are not in the insolvency procedure when requesting the suspension of the credit payment, according to the information available on the website of the National Office of the Trade Registry.
The procedure to be followed in order to benefit from the payment suspension
In case the debtor intends to benefit from the suspension of the installments, interest and commissions, it is required to submit with the creditor (credit institutions and non-banking financial institutions) a request expressing such intention, in letter format or by e-mail, addressed to the contact information specified in the loan agreement or through another remote communication channel offered by the creditor, no later than 45 days from the entry in force of GEO 37/2020.
If the debtor cannot submit the request in letter or electronic mail, he has the option to make such request orally, to the phone number that shall be announced by the creditors on their web page. The creditor has the obligation to record the call.
By the request addressed to the creditor, the debtor has the possibility to choose the suspension period of the payment obligation of the due installments. The period may be established between one and nine months, but no longer than December 31, 2020.
The creditor analyzes the request and approves it in the conditions provided by the norms for applying the emergency ordinance.
If the request is approved, the extension of the contractual term shall be effective starting the date of the submission of the request for suspension.
According to the GEO under discussion, the amendment of the credit agreements occurs by effect of the law, without concluding any addendums. Within 30 days from receiving the request, the creditor notifies the debtor the contractual clauses that were amended in order to implement the provision of the GEO.
Provisions regarding the interest
The interest owed by the debtor corresponding to the outstanding amounts whose payment is suspended is capitalized on the balance of the existing credit at the end of the suspension period. The capital thus increased shall be paid in installments for the remaining period until the new maturity of the loan, after the period of suspension.
The ordinance provides an exception for the mortgages contracted by natural persons, the interest related to the period of suspension being calculated in accordance with the provisions of the credit agreement, being a distinct and independent debt in relation to the other obligations arising from the credit agreement. For this debt, the interest rate is 0%, the payment being executed by the debtor gradually, in 60 equal monthly installments, starting with the following month from the end of the deferral period.
Therefore, for mortgage loans no interest to interest shall be paid by natural persons.
The Ministry of Public Finance guarantees 100% the payment of interest accrued during the payment suspension of the installments only for individuals with mortgages.
The Ministry of Public Finance is expected to issue the norms for implementing the emergency ordinance within 15 days of the publication of the GEO in the Official Gazette.
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