The suspension of bank installments is a measure meant to limit the negative effects caused by the revenue shortfalls of natural persons, as well as by the severe lack of liquidity faced by small and medium-sized enterprises, affected by the COVID-19 pandemic.
In this regard, the Emergency Ordinance 37/2020, which provides for the possibility of suspending installments at the bank up to 9 months, but not more than 31.12.2020, has been approved, of this measure benefiting exclusively the natural and legal persons who have been directly or indirectly affected by the effects of the COVID-19 pandemic.
WHO BENEFITS FROM THE SUSPENSION OF INSTALLMENTS?
According to Art. 1 letter b) from O.U.G. 37/2020, the debtors eligible for the suspension measure are as follows:
- the natural persons;
- the legal persons, including those under credit or lease contracts;
- the authorized natural persons;
- the individual businesses and family businesses;
- the liberal professions.
WHAT ARE THE CONDITIONS OF GRANTING?
- The loans must be contracted before the entry into force of the Emergency Ordinance;
- The credit agreement has not reached maturity and the creditor has not declared the anticipated maturity before March 30, 2020;
- The debtors’ incomes are directly or indirectly affected by the serious situation generated by the COVID-19 pandemic;
- There should be no arrears on the date of establishment of the state of emergency (16.03.2020) or have paid the arrears by the date of the request for suspension;
- Other entities, except for individuals, may benefit from provisions only if: they totally or partially interrupt their activity as a result of the decisions issued by the public authorities, during the state of emergency and hold the emergency situation certificate issued by the Ministry of Economy or the emergency situation certificate which establishes, on the basis of the self-declaration, that the revenues or receipts decreased by 25% in March compared to the average of January and February, and
- they are not in insolvency at the date of requesting the suspension of the credit repayment.
WHAT HAPPENS TO INTEREST RATES?
The interest due by debtors shall be capitalized on the balance of the credit at the end of the suspension period. In other words, the interest will be paid in installments for the remaining period.
In the case of mortgage loans, the interest related to the period of suspension shall be calculated in accordance with the terms of the credit agreement and shall be considered a distinct debt. The interest on this claim shall be zero and its payment will be made in 60 equal monthly installments, starting with the month immediately following the end of the deferral period.
FOR WHAT PERIOD CAN PAYMENT OF INSTALLMENTS BE SUSPENDED?
The debtor may choose to suspend the obligation to pay the installments for a period between one and 9 months, but not more than 31.12.2020.
In order to benefit from the measure, the debtors will submit a claim in paper form or by electronic mail at the latest 45 days after the entry into force of the Emergency Ordinance.
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