Banks expect 40,000 borrowers to file for personal bankruptcy

Retail

Approximately 25,000 troubled borrowers could take advantage of Hungaryʼs new personal bankruptcy law in the short term, and the legislation could affect some 40,000 families in the long term, according to top officials of the Hungarian Banking Association, Hungarian news agency MTI reported.

 Levente Kovács, the associationʼs chief secretary, said the introduction of personal bankruptcy had been "hurried and unduly substantiated", but he added that the banking association was committed to continuing its cooperation with the government and had taken an active role in establishing the framework for personal bankruptcy in Hungary. 

Kovács said it could only be hoped that the system would function well considering the tight deadline to prepare for its introduction, and he conceded that changes might have to be made in the future. András Becsei, the associationʼs deputy head, said the body supports the concept of personal bankruptcy, citing several international examples of cooperation between clients and creditors.

Parliament approved legislation introducing personal bankruptcy late in June. The personal bankruptcy rules will come into force from September 1, 2015 for Hungarians whose homes could be repossessed. The rules will become universal from October 1, 2016.

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