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KDNP submits family bankruptcy draft bill

Analysis

Junior governing alliance partner KDNP has submitted a draft bill to the Justice Ministry that would introduce family bankruptcy in Hungary as of 2016, Deputy Head of KDNP and State Secretary Bence Rétvári said on public television today.

The legislation would help Hungarians who owe several million forints and are at a level of debt that exceed their assets and expected income, Rétvári said. In line with the party’s plans, these troubled families would be paired with financial experts, who would establish a financial plan for the families and reach an agreement with creditors on “forgiving part of the loan”, Rétvári added.

Rétvári noted that lenders often sell their “bad loans” to factoring companies at 30-40% of book value, while the factors try to collect on 100% of the loans.

The bill was drafted after Parliament approved borrowers' relief legislation last year, making the country's retail lending stock — much of it denominated in foreign currency — manageable, according to the state secretary.

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