THE DRAFT BILL ENTERS THE SPECIAL COMMISSION Distraint expenses to increase after the elimination of bank distrainors

The draft of the new Criminal Code of Law (Book V) implements the elimination of the debt collectors employed by banks. The new draft bill only The new draft only recognizes debt collectors appointed by courts or by the tax administration. The lawyers of "Ciutin-Braşoveanu" said the following: "In the context of the new Code of Civil Procedure, everyone is looking for a solution which would allow putting the professional expertise of bank debt collection agents, which they have acquired in over ten years". The project of the new Code of Civil Procedure is in its final form and is being discussed by a special Commission which brings together deputies and senators, and will be discussed before the plenum of the Parliament.

• Debtors will see debt collection expenses increase

Banks and non-bank lenders currently employ their own debt collectors, and their wages are paid by their employers instead of by the debtors. These debt collectors currently charge no fees. Court debt collectors will charge fixed and variable fees, with the latter being calculated based on the amount of the outstanding liability and the amount collected. "This will cause debt collection costs to increase dramatically and they will be borne by the debtors", lawyers added.

• The new law will cause foreclosures to take longer

The new draft bill includes foreclosure procedures which will take longer than the current ones, lawyers say. They also mentioned that according to the new code, a court order is no longer required, as for most cases of debt collection, the law acknowledges the binding nature of loan and collateral agreements, concluded between lending institutions and borrowers. Lawyers say that due to the high workload of courts, a simple acknowledgement of the existence of the debt can delay the seizure of the assets by several days, sometimes by as much as several weeks.