First residence: Her protection is at the Supreme Court –

Table of Contents

• 1 Irrevocably
• 2 interest-“loop”
• 3 Dichotomy
• 4 The decision
• 5 The rationale: Intervention by the Athens Bar Association
• 6 How might the Athens Bar Association’s argument about the Katseli Law’s intent influence the Supreme Court’s decision⁣ and, subsequently, shape future legislation regarding debt management and borrower ⁣protection in Greece?

It may be that over-indebted households and the rescue of the first home from the vortex of auctions for thousands of borrowers do not show the tension that existed during the years of the financial crisis, but there are still very serious problems for those who owe and have been subject to the so-called Katseli law and the many amendments that have complemented it since then, strengthening protection for weak and economically vulnerable citizens.

One of the major issues for the over-indebted, involving thousands of vulnerable households, which have been subject to court-ordered arrangements, is loan interest.

Interest and how it is calculated is a major issue, which is expected, as “To Vima” reveals, to occupy – and be resolved – at the highest judicial level, as the Plenary Session of the Supreme Court is expected to be convened immediately for this.

Irrevocably

What and how much interest loan management companies are charging thousands of borrowers who have entered into judicial protection is expected to be irrevocably decided by the Supreme Court in a trial that will not only be of legal and factual interest to the thousands who pay installments on loans, but also for the government, which collects hearsay social discontent from those who attempt to pay off loans taken out in other times but they are now unable because their installments are burdened with exorbitant interest.

interest-“loop”

But let’s take things in order, to see how thousands of citizens who entered judicial protection for loans they had received years ago (for the purchase of a house, repairs and much more) are in recent years in a new vortex of real inability to meet the installments imposed on them by the court. Weakness that for thousands of them signals bankruptcies, financial collapses and losses even of their necessary housing possibilities, such as the first home.

The problem with these thousands of borrowers started and reached the Supreme Court, because in practice the prevailing situation is both contradictory and confusing. In simple words.

For thousands of them there are court decisions that judge that the interest on the installment that is determined to pay each month must concern the entire debt. In other cases, however, the interest is calculated based on the installment and not the entire debt.

Dichotomy

In the first case, things develop, as is natural, very difficult. For example, if a borrower has an installment every month of 400 euros and the interest is calculated on the total amount of money he owes, the amount of the installment is skyrocketing and it doesn’t need to be said much to realize that this person is unable to pay.

In the second case, where the interest is calculated based on the installment he pays, things are simple and move at reasonable levels. Thus, this contradictory reality reached the Supreme Court with a pre-trial, as it is called in legal terms, question addressed by the Ioannina Magistrate’s Court regarding the dichotomy that has arisen from the issuance of conflicting and absolutely contradictory decisions, the consequences of which are important and very serious for thousands of citizens who are in debt and trying to save their properties and get back on their feet.

Especially, in cases where there is a risk for the rescue of the first residence, the issue of interest assumed large dimensions.

The decision

For the trial before the Plenary of the Supreme Court, as provided by law, a three-member Committee, consisting of the President of the Supreme Court, decided Ioanna Klapathe oldest vice president Maroulio Daviou and the head of the relevant Department of the Supreme Court Alexandra Apostolaki. The three-member committee met on November 5 and decided that the matter is very serious and that the Plenary of the Supreme Court must decide on it in a trial, a pilot, as it is called, in order to solve the matter irrevocably and for everyone.

The trial in the Plenary will be set soon and the Athens Bar Association will also attend to support his intervention, while it should be noted that in the courts the cases involving the over-indebted have already been tried systematically in recent years and the large volume of them has been cleared.

The rationale: Intervention by the Athens Bar Association

The Athens Bar Association submitted to the President of the Supreme Court, Ioanna Klapas, an additional intervention for the serious case, regarding the case of a borrower in Ioannina, for whose case the question was also sent by the court there, in order to resolve once and for all this very serious social issue from the Supreme Court, as the decision of the supreme court will concern everyone.

And this, because the trial at the Plenary Session of the Supreme Court will take place as a pilot, as it is said, that is, the decision that will be issued will not only concern the Ioannina case, but all cases throughout the territory with the same object.

Let’s now go to the rationale for the intervention of the Athens Bar Association, as explained by its president Dimitris Vervesos in his statement to “To Vima”, reasoning that has to do with the essence of the judgment of the Plenary of the Supreme Court.

That is to say that the amount of interest-reducing installments of each borrower that was determined by the court based on his financial capabilities, has already been overturned for thousands and many people are at risk of losing their homes and their properties because of the way the interest is calculated on the installments they pay .

It is emphasized, in fact, in the intervention of the DSA, that the purpose of L. 3689/2010 (Katseli law which has had many amendments since then) is the reintegration of the over-indebted borrower into economic and social life and therefore the amount of interest, when calculated on the total debt, subverts the essence of the protection of the law and leads borrowers in impoverishment.