The bill from the Ministry of National Economy and Finance is heading to Parliament this week, aiming to expand the number of debtors eligible for the out-of-court debt settlement mechanism.

The changes include broader criteria for income, assets, and bank deposits, as well as the ability to enter the mechanism without requiring approval from banks or the state.

For a single-person household, the new income threshold is set at €14,000, for a two-member family at €21,000, and for a five-member family at €42,000. Correspondingly, property value limits reach up to €360,000.

With these new criteria, the mechanism becomes accessible to tens of thousands of households that were previously excluded. For those who meet the updated thresholds, the settlement is automatically locked in without requiring creditor approval. The ceiling for non-performing debts has also been raised to €300,000, enabling inclusion of significantly higher outstanding amounts.

A second major benefit is the elimination of the 60-day deadline after a foreclosure. Now, applications for inclusion in the interim protection program can be submitted up to 20 days before the auction. This change helps thousands of debtors who previously lost their right to settle simply because they ran out of time. The ministry aims to eliminate bureaucratic exclusion and offer real time for reaction to those in financial distress.

From now on, creditors will be required to send a repayment proposal at least three months before an auction. Merely notifying debtors of foreclosures or auction dates will no longer be enough—a specific, written proposal with repayment terms will be mandatory. This proposal can even be sent via email. In practice, this means that the settlement must precede the auction—not follow it.

Also crucial is the full exemption from upfront payments for vulnerable debtors. For all others, an advance payment of up to 10% of the total settlement is required. Vulnerable individuals—such as those with low incomes, disabilities, or underage children—will be able to join the mechanism without any upfront costs, removing a key barrier that has excluded many of the most financially vulnerable until now.

The new legislation also provides a definitive solution for individuals with no assets. If someone lacks the minimum to initiate bankruptcy proceedings, they will no longer be required to go through court. Instead, they will be directly registered in the Insolvency Register and discharged from their debts, without any further procedures.