Government’s final draft includes details of the non-performing loans (“red loans”) and indebted households without, though, being approved by the lenders.

The draft provides a transitory period for non-performing loans, whether they remain in banks or are transferred to non-banking financial companies.

During the transitional period all loans associated with the primary residence, consumer loans, repairing loans, self-employed loans, loans of merchants, farmers, and small and medium businesses securing first residence with up to 140,000 euros objective value are excluded. The same protective framework will apply for loans to be transferred to non-banking financial companies.

As part of the Special Secretariat for Private Debt Management to be established, the government will reinforce courts so as to be able to accelerate the hearings of indebted household cases, while ‘insolvency practitioner’ profession will also be established to address any cases of over indebtedness.