Parliament approves personal bankruptcy law
The Hungarian Parliament today approved a legislation on introducing personal bankruptcy in Hungary, with 142 voting in favor, one voting against and 42 in abstention.
As it was earlier reported, junior alliance governing party KDNP proposed a bill, under which insolvent Hungarians with debts – including interest and fees – between HUF 2 mln and HUF 60 mln, would be allowed to file for personal bankruptcy, exempting their assets from debt collection. Debtors and lenders will now have an incentive under the rules to first reach an agreement on repayments among themselves, the bill states, adding that the agreement could involve a restructuring of debt, an exemption from late payments or a partial discharge of debt. If debtors and lenders fail to reach an agreement, a court would act as an arbitrator.
The bill also limits eligibility for personal bankruptcy to Hungarians whose debts do not exceed twice the value of their assets and the income they expect to use for repaying their lenders over a period of five years. It would also require at least 80% of the debts to be undisputed and limit the number of lenders to whom the borrower is indebted to five years.
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