First court decision to suspend auction as a ‘second chance’ in Corfu
Bankruptcy Law
01 Mar 2022
/ 17:09
CORFU. The first court decision since the implementation of the New Bankruptcy Law.
The Corfu Magistrate Court issued the first decision nationwide to suspend an auction under the New Bankruptcy Law following an application for suspension. Specifically, it suspended an auction of a residence as it ruled that the bankruptcy petition under the new law will be successful.
Natalia Orphanoudaki, the lawyer who handled the case, told Enimerosi that this is the first time the New Bankruptcy Law has been implemented. “Bankruptcy leads to the complete cancellation of all debts to the state, insurance funds, private individuals and banks. It is not a debt settlement. It is a total cancellation of debts. The compensation for the total cancellation, which takes between one and three years depending on the circumstances of each case, is the loss of the debtor's movable and immovable property. Vulnerable borrowers are protected by the possibility of transferring their main residence to a special body and the right to remain in it.”
Second chance
As Mrs. Orphanoudaki explained, “the individual has filed for bankruptcy through the registry, as required by law. However, a decision has not yet been issued and, in the meantime, an auction of their property has been set. Therefore, in order to proceed with the procedure, the Corfu Magistrate Court ruled that it must suspend the auction until the decision on the bankruptcy is made, which will be accepted, according to the statement of the reasons for that decision. In other words, the court finds that it will be successful.
Basically, a ‘second chance’ is provided to the vulnerable borrowers and this is the new procedure under the new Bankruptcy Law.
With the suspension decision, the property no longer appears on e-auction until a final decision on the bankruptcy is made.
With rent
The next step is for the special state body, which will be established within the next period, to take possession of the property. From this body, it will be rented to the bankrupt individual, who is now considered vulnerable. After twelve years, if their life is getting better and if they want to, they can buy it back.
Legally for us lawyers, this decision is very important because it is the first time the new Law has been implemented. And it is even more important for the vulnerable borrowers because it is a way to protect their homes, which basically means that they will not be left on the street.”
Natalia Orphanoudaki, the lawyer who handled the case, told Enimerosi that this is the first time the New Bankruptcy Law has been implemented. “Bankruptcy leads to the complete cancellation of all debts to the state, insurance funds, private individuals and banks. It is not a debt settlement. It is a total cancellation of debts. The compensation for the total cancellation, which takes between one and three years depending on the circumstances of each case, is the loss of the debtor's movable and immovable property. Vulnerable borrowers are protected by the possibility of transferring their main residence to a special body and the right to remain in it.”
Second chance
As Mrs. Orphanoudaki explained, “the individual has filed for bankruptcy through the registry, as required by law. However, a decision has not yet been issued and, in the meantime, an auction of their property has been set. Therefore, in order to proceed with the procedure, the Corfu Magistrate Court ruled that it must suspend the auction until the decision on the bankruptcy is made, which will be accepted, according to the statement of the reasons for that decision. In other words, the court finds that it will be successful.
Basically, a ‘second chance’ is provided to the vulnerable borrowers and this is the new procedure under the new Bankruptcy Law.
With the suspension decision, the property no longer appears on e-auction until a final decision on the bankruptcy is made.
With rent
The next step is for the special state body, which will be established within the next period, to take possession of the property. From this body, it will be rented to the bankrupt individual, who is now considered vulnerable. After twelve years, if their life is getting better and if they want to, they can buy it back.
Legally for us lawyers, this decision is very important because it is the first time the new Law has been implemented. And it is even more important for the vulnerable borrowers because it is a way to protect their homes, which basically means that they will not be left on the street.”
